Two assignments

Innovation and Competitive Advantage: Changing Environments

MGT/411

July 26, 2017

Innovation and Competitive Advantage: Changing Environments

In 1971 at Seattle’s Pike Place Markets, it is when Starbucks started operations with the future objective of supplying coffee to various surrounding bars and restaurants. Following the hiring of Howard Schultz in 1982, Starbucks changed Schultz opinions taking a different turn in the company. The present international condition for Starbucks looks like an emerging business part as well as the reorganization of this is confirmed through their endeavor to be the leading worldwide company by making difference in lives of people all over the world. This seems to be working in the company’s favor, and is assisting Starbucks to catch the attention of several main companies who wish to share partnership. This is entirely positive news since it gives a strong foundation for future growth of global markets, which strengthens more the mission to be one of the principal specialty coffee retailers worldwide (Kembell, Hawks, Perry, Olsen, April 2002).

The Organizational Leadership Philosophy on Innovation

Starbucks got several leadership characteristics on how they view innovation. Openness is one characteristic that Starbucks coffee adheres to. At first, workers had a fear culture whereby they feared talking to their superiors. In order to tackle this problem, the former president of Starbucks Behar, initiated open forums to encourage staffs to query as well as communicate with their superiors. Through this, openness culture was developed which empowers Starbucks employees and smooth the progress of innovation (Ferguson, January 31, 2017).

Additionally, there is collaboration and communication within the company. The Starbucks organizational culture endorses collaborative attempts by use of effective communication. In the cafes, baristas evidently communicate with one another to meet orders. In addition, they cooperate with each other to make the order completion process efficient. Therefore, leadership at Starbucks encourages business process efficiency, which leads to top quality service, business cost-effectiveness, and customer experience (Ferguson, January 31, 2017).

Finally, Starbucks got an anti-discrimination procedure which shapes the company’s culture. The policy forbids any kind of discrimination based on race, gender, ethnicity, religion, sexual orientation, cultural backgrounds, thoughts and ideas, and life experiences. By the observation of this aspect, Starbucks assists rapport and sharing among its workers, and innovation based on different ideas. This feature of the company also makes Starbucks customers feel welcome at the cafes (Ferguson, January 31, 2017).

Activities the Organization is Actively Engaged in to Sustain Competitive Advantage Within Its Industry

One of the activities that Starbucks engage in to ensure they remain competitive in this industry is product innovation. At all times, Starbucks has managed to maintain its competitive advantage through being the principal in innovation of product. The most recently relaunched product is pumpkin spice latter which is now one among the seasonal preferred at Starbucks. As indicated by Sense360, after the launch of this product, there were over 150,000 incremental visits within the first two days. This saw Starbucks national QSR market rise by about 6.96% (Trefis Team, October 13, 2016).

Another activity that Starbucks engage in to stay in a competitive edge in the market is capitalizing on changing preferences of consumers meaning, Starbucks is flexible managing it to maintain its popularity over time. The company has been open to adjusting the changing preferences and tastes of consumers. The fact that Starbucks is flexible has enabled it to flourish in the difficult and mainly tea-drinking China markets. Hence, the start of stocking almond milk in its stores, plus also other non-dairy options like soy milk and coconut milk (Trefis Team, October 13, 2016).

R&D Initiatives the Organization is Involved in for Long-term Competitive Advantage

Instead of engaging in fundamental science, Starbucks has engaged itself in applied science in a tiny though vital section, which has provided basement for the company and the capability to engineer its products. The ‘Know How’ has allowed the formulation of fresh products, their improvement, and contributed to quality reputation of Starbucks. An example that is well demonstrated is that Starbucks research into the capability to get instant drinks of high quality, according to freeze-dry technology which had been used in procedures of blood testing in the past (Corporate Innovation Online, n.d.).

Additionally, Starbucks has various types of technology involving innovation interest for example innovation interest in research. In 1982, Schultz started to get to learn all concerning coffee. In 1993, Starbucks founded an R&D facility, known as tiny, though possibly exceptional initiative under the retail business of coffee. In the fiscal 2009, 2008, and 2007 Starbucks spent about $6.5 million, $7.2 million and $7 million correspondingly, on technical research as well as development processes. This is including the customary product testing as well as process or product improvement in all sections of its business. By that, it can be said that Starbuck shows a long-term interest in R&D. Another form of technology is that the company stated its wishes to become the coffee authority, referring to that the company needs to have, always, an unambiguous and detailed information, on the entire coffee supply chain (Corporate Innovation Online, n.d.).

References

Corporate Innovation Online. (n.d.). Starbucks Corporation. Short Profile of Innovation in the Corporate World Retail Industry – Global Market. Retrieved from http://www.corporateinnovationonline.com/wordpress/wp-content/uploads/2011/05/starbucks.pdf

Ferguson, E. (January 31, 2017). Starbucks Coffee Company’s Organizational Culture. Panmore Institute. Retrieved from http://panmore.com/starbucks-coffee-company-organizational-culture

Kembell, B., Hawks, M., Kembell, S., Perry, L., & Olsen, L. (April, 2002). Catching the Starbucks Fever. Academic Mind. Retrieved from https://www.academicmind.com/unpublishedpapers/business/marketing/2002-04-000aag-catching-the-starbucks-fever.html

Trefis Team. (October 13, 2016). Starbucks is maintaining its Competitive Edge. Forbes. Retrieved from https://www.forbes.com/sites/greatspeculations/2016/10/13/how-is-starbucks-maintaining-its-competitive-edge/#6aa4bb64759c