Starbucks: The Economic and Political Dangers of Globalization

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The modern international markets are currently driven by capitalistic forces, promoting the establishment of new businesses that can change the world and benefit society. In this case, each company fights for the loyalty of its customers and seeks a competitive advantage that will make it more appealing and irreplaceable. However, while some firms are only starting to build their brand, others are already well-recognized and reap the results of their management and marketing strategies. One such company is Starbucks, which is famous for its coffee beverages and foods. Still, while management strategies boost the recognition of the corporation, it still has competitors who have similar strengths and opportunities.

First, when it comes to its primary management strategy of Starbucks, it is necessary to mention that it is based on increasing and leveraging the company’s global appeal. Differentiation strategy is a concept that describes Starbucks’ management philosophy and its attitude toward leveraging presence (Starbucks Stories & News). Usually, the large coffee network company places a priority on the value of its goods, and customers are willing to pay more for great quality (Starbucks Stories & News).

President and CEO of Starbucks, Kevin Johnson, once mentioned that the firm needs to act more quickly to meet their client’s requirements and interests, which are altering more rapidly (Starbucks Stories & News). It was mentioned that the organization took a number of steps to simplify the business over the last year. The steps taken involved preparing Starbucks to become a more innovative enterprise and sharpening the focus on the critical value pillars that act as the cornerstone for reviving performance and building long-term value (Starbucks Stories & News). As a result, one can see that Starbucks is client-oriented and builds its reputation with market presence and an increase in quality.

However, Starbucks is not the only company that values customers and offers a variety of similar products. The marketing technique Starbucks employs in the U.S. is additionally used in other countries. For instance, multinational companies like Barista Lavazza, Barista, and Costa Coffee are some of the other main rivals and are prevalent in India (Razak 123). In addition, Starbucks faces opposition from auxiliary rivals in the U.S. They constitute Georgia Coffee, and they can be available in fast food restaurants like McDonald’s, KFC, and Subway (Razak 123). However, the most significant competitors of Starbucks are McDonald’s and Dunkin’ Donuts, who not only have a strong market presence but offer similar menus with beverages and pastries. While their interests in the industry differ, these companies are still considered potential rivals.

Regarding the near-monopoly position of Starbucks, it is vital to mention the challenging entry for new companies and a large customer base. Starbucks has a potent marketing strategy that intensifies brand awareness (Basu and Miroshnik 264). In these circumstances, Starbucks has become well-known and amassed its customer base with optimal prices while making the entrance of new companies more complicated in such a competitive environment.

The company’s creative branding and its ability to give clients an experience are the primary reasons for its success. However, due to the presence of companies with similar services, Starbucks cannot be considered fully monopolistic (Basu and Miroshnik 264). As a result, Starbucks is limited in its ability to set prices at an arbitrarily high level because doing so might lead to a loss of consumers who are price concerned.

Finally, McDonald’s and Dunkin’ Donuts can be considered companies that have the potential to take the market dominance of Starbucks if they show such interest. The mentioned companies have similar menus and their products are relatively cheaper than similar options (Grant 411). The reason behind the unique services of Starbucks is the customer experience and variations of coffee, while McDonald’s and Dunkin’ Donuts have a limited choice of caffeinated beverages.

Therefore, while McDonald’s and Dunkin’ Donuts win in terms of prices for customers and diversified menu, Starbucks takes a leading position in profit margins and high quality of products. Yet, if organizations decide to prioritize quality rather than accessibility and Starbucks relies majorly on coffee, which is vulnerable to climate change, the dominance might shift toward these significant competitors in the following years.

Hence, even while management tactics increase the company’s reputation, it still faces rivals with comparable advantages and opportunities. First, it is essential to note that Starbucks’ primary management approach is built on broadening and maximizing the company’s appeal on a worldwide scale. However, Starbucks is not the only business that cherishes its clients and provides a range of related goods. McDonald’s, Dunkin’ Donuts, Georgia Coffee, Barista Lavazza, Barista, and Costa Coffee are a few other rival businesses. It is important to note that Starbucks has a sizable consumer base, making it difficult for new businesses to enter the market.

Finally, if they demonstrate a desire, McDonald’s, and Dunkin’ Donuts might be viewed as businesses that have the capacity to challenge Starbucks’ market dominance. With a more diverse menu and with increased emphasis on quality instead of accessibility, the two companies can take dominance in the following years.

Works Cited

Basu, Dipak, and Miroshnik, Victoria. The economic and political dangers of globalization: A non-western perspective on global capitalism. Springer International Publishing, 2021.

Grant, Robert M. Contemporary strategy analysis. Wiley, 2021.

Razak, Abdul and Dr. S. Pardhasaradhi. Strategic management tools: Text & cases. Readworthy Publications, 2021.

Starbucks Stories & News. Starbucks announces strategic priorities to accelerate growth and create long-term shareholder value. Starbucks Stories & News, n.d. Web.

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Starbucks: The Economic and Political Dangers of Globalization

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