How has Starbucks been so successful?

Starbucks is a world-renowned specialty coffee maker. It is the leader of the coffee market. As an individual company, it controls several times more market share than any of its competitors. More than just a high-priced coffee shop, Starbucks offers a combination of quality, authority and relative value.

It offers several blends of coffee, handcrafted beverages, merchandise, and food items. Starbucks also offers a range of consumer products in coffee and tea, readymade drinks, and Starbucks ice cream.

Starbucks is widely known by most of the people because of its continuing competitive in the market place. Starbucks business strategies are generally used to ensure the effective flow of the business operations.

Starbucks sets its prices on a simple idea: high value at moderate cost. When people feel like they are getting a good deal for their money, they are more likely to pay a higher cost. Quality is key. Starbucks has to maintain strict quality controls in its coffee sourcing as well as in its customer service and peripheral products to justify its costs.

Starbucks also spends a lot of time and energy differentiating itself from the competition. You can see this in the design of its coffee shops, the music played there and the types of products it sells, such as coffee-brewing equipment and jazz CDs. Starbucks makes sure to keep current on the latest technology, often times being the first to introduce the newest advancements to its customers. For example, Starbucks was one of the first companies to adopt location-based promotions and mobile payments.

When Starbucks went public in 1992, it had only 165 stores spread throughout Seattle and its neighboring states. Today, it has surpassed its 10,000 goal and is planning on adding another 10,000 outlets worldwide. What was the Starbucks strategy that enabled this initially West Coast yuppie fad to become a global phenomenon? It is simple: saturate the market.

Typically, stores would place their retail outlets in locations based on demographics, traffic patterns, the location of competitors as well as the location of its own stores. However, the Starbucks strategy went against the grain. Instead of following the trend, CEO Howard Schultz had a different idea. He decided that the Starbucks strategy would be to blanket an area completely. Instead of worrying about stores eating up each other’s business, the Starbucks strategy focused on heavily increasing the foot traffic in one specific part of town. Schultz knew that his Starbucks strategy was a risk, but it was one he was willing to take. In the end, the unique Starbucks strategy paid off. Clustering its stores in one area helped Starbucks quickly achieve market dominance. With over 20 million regular customers per week, no other American retailer can claim a higher frequency of visiting customers. What makes this Starbucks strategy all the more amazing is the fact that the company spends less than 1% of its annual revenues on advertising, versus the typical 10% of most other retailers. Instead, the Starbucks strategy relies on word of mouth advertising. They believe that by creating an intimate and welcoming environment in their stores, as well as providing a great cup of coffee, patrons will not only keep coming back for more, but will tell all their friends and family about it too. 


As a matter of fact, store design, planning and construction are also part of the strategy. Locations are designed for customers to meet, relax or simply enjoy a peaceful interlude in their day.

The Starbucks strategy has always involved thinking outside the box. In addition to clustering its outlets, the Starbucks strategy involves engaging in smart joint ventures with the right companies, such as their successful alliance with Pepsi-Cola Co., and rolling out fresh, new initiatives, including a new product line of hot sandwiches and breakfast food and new drinks such as coffee liqueurs. The Starbucks strategy is now also expanding online, allowing customers to pre-order and prepay for products via the Internet. 



Starbucks continues to keep its customers happy and rely on non-traditional means of attracting new customers: that is the Starbucks strategy. 

IKEA: more than low prices

We all know that IKEA is  a global brand in the home furnishing market with hundreds of stores across the world.

It has a clear mission: selling a wide range of furniture and accessories at a reasonable price so that most people can buy them. By offering a wide range of assortment the key word is functionality, consumers can find everything under one roof. That‘s why you can find everything at IKEA.

Its success is based on the relatively simple idea of keeping the cost between manufacturers and customers down.

In order to do so, IKEA customers have to assemble the bought products themselves. That creates innovation upstream, which helps suppliers to save costs, and downstream, as self-assembly became a large cost saver for customers.

IKEA follows all of Porters generic strategies. Its mission statement indicates a cost leadership strategy. However, the company is also applying an indirect differentiation

strategy due to its unique way of incorporating the customer in the value chain. This combination indicates a focus strategy.

Young buyers in search of stylish and fashionable furniture and household accessories at a low cost are IKEA’s targeted market segment. For these customers, the firm offers home furnishings that combine good design, functionality and acceptable quality at low prices. According to the firm, low cost is always a priority. This applies to every phase of their activities.

      ·  IKEA emphasises several activities to keep its costs low. For example, instead of relying primarily on third party manufacturers, the firm’s engineers design low-cost, modular furniture ready for assembly by customers.

     ·  IKEA also positions its products in domestic settings. Typically, competitors’ furniture stores display multiple varieties of a single item in separate rooms, meaning that their customers examine living room sofas in one room, tables in another room, chairs in yet another location, and accessories somewhere else entirely. In contrast, IKEA’s customers can view different furniture combinations (complete with sofas, chairs, tables, and so forth) in a single setting, which eliminates the need for sales associates or decorators to help the customer imagine how a furniture arrangement would look when placed in the customer’s home. This approach requires fewer sales personnel, allowing IKEA to keep its costs low.

    · A third practice that helps keep IKEA’s costs low is expecting customers to transport their own purchases rather than providing a delivery service.

      Ikea Commercial

Although a cost leader, IKEA also offers some differentiated features that appeal to its target customers, including in-store playrooms for children, wheelchairs for customer use and extended hours.

IKEA’s focused cost leadership strategy finds the firm offering some differentiated features with its low-cost products.

IKEA customers are actively involved in the shopping experience. Its concept relies on customers to choose, collect, transport and assemble IKEA products themselves. Customer involvement contributes to IKEA low prices. That is the idea behind: "You do your part. We do our part. Together we save money."

IKEA had been successful in almost all countries, because of public awareness of the its brand. IKEA is far more than a furniture merchant. It sells a lifestyle that customers around the world embrace as a signal that they have arrived, that they have good taste and recognise value.

¿Has escuchado hablar de LetsBonus, o has sacado partido de sus ofertas?

El comercio online, durante los últimos años, ha obtenido una gran importancia en nuestra sociedad incrementado el número de usuarios. Actualmente en Europa y algunos países de América Latina, pocas personas desconocen LetsBonus, que se convirtió en la empresa española líder en compra colectiva y pionera en Europa.

LetsBonus ofrece una selección de planes de ocio, viajes y productos exclusivos con descuentos de hasta el 70%. La compañía fue fundada por Miguel Vicente en septiembre del 2009. Actualmente la empresa dispone de un equipo de unos 500 empleados. En España está presente en unas 90 localidades y también opera en Italia, Portugal, Argentina, Chile y Uruguay. En enero de 2012, LetsBonus pasó a formar parte de Living Social, el cual está presente en 19 países y unos 610 mercados. El grupo tiene 4.500 empleados y ayuda a más de 70 millones de suscriptores a descubrir experiencias locales.

Unas de sus estrategias es que LetsBonus es una innovadora plataforma de promoción para un negocio. Invitar cada día a redescubrir la ciudad del usuario con las propuestas que ofrece. Destacamos la confianza y calidad de los negocios con los que trabajan. Esto ha hecho que E-Commerce España los galardonara en 2011 con el premio especial a la Mejor tienda online del año.

En conclusión, las claves de su éxito se basan en promover compras colectivas con las redes sociales como instrumento.

El paraíso de los deportistas

¿Tienes planeados salir de excursión por la montaña? ¿Necesitas equipamiento para jugar a futbol o practicar tenis? Donde mejor que Decathlon para comprar todo lo que necesites para practicar cualquier deporte a buenos precios.

Decathlon es una empresa francesa que se dedica a la venta al por menor de productos relacionados con el deporte en hipermercados. Puedes encontrar desde bañadores y toallas para ir a la piscina o practicar surf hasta aparatos de gimnasia para practicar tú mismo en casa, todo en el mismo recinto. Su principal característica es que mayoritariamente comercializa productos de marca propia para cada tipo de deporte, como Quechua (deportes de montaña), Kalenji (running) y Nabaiji (natación).

La ventaja de Decathlon es que al vender su propia marca puede establecer precios más competitivos que otras marcas más conocidas como Nike o Puma. Esto le permite ser una empresa muy competitiva y con presencia en muchos países. Suministra todo de tipo de accesorios, ya sea para ir a esquiar, bicicletas, toallas e incluso algunos complementos alimentarios para deportistas. Además dispone de productos para todas las edades que quieran practicar cualquier deporte.

Para adaptarse a los tiempos actuales, además de hacer ofertas cuando empieza la temporada de verano o cuando llega el otoño y empieza el colegio, actualmente también dispone de tienda online donde puedes encontrar cualquier producto que busques igual que en el hipermercado.

A continuación, un video donde Decathlon deja clara su filosofía: el deporte puede ser practicado por cualquiera.

Los restaurantes de la crisis

Seguro que si te preguntan el nombre de un restaurante de comida rápida, instantáneamente te viene a la cabeza McDonald’s. Se ha convertido en uno de los restaurantes más conocidos y famosos prácticamente del mundo entero. A cualquier lugar que vayas encontrarás uno y podrás comer lo mismo en cualquiera de ellos.

Esta es una de las ventajas de McDonald’s pues allá donde vayas siempre podrás sentirte como en casa y comer lo que comerías si estuvieras en tu ciudad. Sin embargo esta no es la única característica reconocible de esta marca. Siempre se ha caracterizado por su rápido servicio, por sus precios y por su comida, conocida como fast-food.

Actualmente, su estrategia en reducir los precios para tener unos precios competitivos y mantener la clientela. En los últimos tiempos sobretodo ha reducido tanto los precios de algunos de sus productos, que sus principales competidores han tenido que imitar su estrategia para poder competir. De esta forma, restaurantes como Burguer King o KFC han decidido ofrecer también una selección de productos al mismo precio.

Otra de las cosas que también han influido en el comportamiento de la competencia ha sido el cambio de idea que los clientes tienen de este tipo de restaurantes. Hace un tiempo estos restaurantes eran vistos como el paraíso de las calorías, donde los padres debían evitar llevar a sus hijos.

Ahora esta idea está cambiando. Se ofrecen menús con ensaladas y frutas. Además lo presentan como un lugar donde cualquier cosa puede suceder y donde la gente se puede reunir con sus amigos o venir con la familia para pasar un buen rato, además de comer. La idea de este tipo de restaurantes ha cambiado: ya no se va solamente a comer hamburguesas, sino que ahora la gente se reúne allí para pasar el rato y además comer. También los precios tan reducidos hacen que prácticamente todo el mundo pueda permitirse comer allí.

En la situación actual, estas empresas continúan creciendo y creando empleo porque consiguen adaptarse a las diferentes situaciones de sus clientes, ya sean de los que pueden permitirse un menú o simplemente comer algunos de los productos de 1€, los que se reúnen con unos amigos o los que vienen a pasar el día con sus hijos.

Walmart vs. Apple

In this blog entry we will analyze the organizations’ success techniques looking deep inside the ideas and the principles these companies have used to become the mega-successes they are today. The common denominator, the major piece of the puzzle of the domination method is PERSPECTIVE. That is the business strategy that all of these companies have used.

What is Walmart’s business strategy?

They talk about low prices every day so that it is assumed in our minds that Walmart is one of the cheapest shops out there. That is not true, though. People know that Walmart doesn’t always have the cheapest prices, but that concept has helped them so that they can offer better deals than the competitors of their size.

If we compete for the lowest price ever, in the longer run, for small businesses, we are almost always going to lose, because we are working on such a small margin that, if somehow a competitor of ours manages to lower the cost by even a fraction, we have lost. So, going for the cheapest cost ever does not always work.

There is another reason why the lowest cost does not always work. It is because in our mind it is considered “cheapy”. Let’s say,for example, if you buy a T-shirt in Walmart, it is not perceived to be a good shirt, because Walmart doesn’t carry good quality clothing, shoes and suits. But the brand perception of associating a person with a brand in terms of clothing or shoes or those kind of things it is not really perceived to be elite; it is considered “cheapy”.

Let’s take another example: Apple.

Apple created their whole brand by charging premium pricing and when a person has an Apple product, it is considered to be cool. When we use Apple products we talk about them with pride. But we don’t always talk with pride for something that has been bought from Walmart because it is considered to be cheap.

It is all about the perception of how a person is perceived based on the products he is associated with.

Are you associating with a phone that Apple offers or a phone bought from Walmart? So the way you price your products matters.

If you are the lowest cost ever, you might attract a lot of people but you will probably lose because, if your competitor lowers the price of the product that is already the lowest for you, you are going to be working with really  small margins and on the other hand you are not going to have a pretty good brand impression and association with people in terms of perception of the quality.

On the other hand, if you are selling premium products like really over-priced or high-priced products, they are perceived to be elite.

You can generate additional revenue from your brand name itself.

But there is a problem with charging elite prices. Only 5% of the people are really super-rich. If your prices are really high, basically you are eventually eliminating 95% of the population who cannot afford your products.

However, there is a solution and that is the PERSPECTIVE STRATEGY. What is the perspective strategy? That was the strategy used by Apple and other success companies. What the perspective strategy says is to position your product in such an angle that it is perceived to be of higher value and people like to associate with your product, service or brand.

Apple is basically in the PC industry but through their advertising and marketing efforts, they engraved in the consumers minds that their computer are not PC, they are Mac.

Basically a Mac is also a personal computer but they said “no, we are not PC’s. This is something else, we are Mac.”

Get a Mac

And they have created a high priced product. They have different colors. Usually computers are black or gray in color, but Apple created white-colored computers and they positioned it totally differently so that people say “ok, this is a Mac and this is a PC” although they are all PC’s. Apple used this strategy in Ipod’s as well.

It is known as the principle of the domination method and it shaped the way Apple is running today.

Apple has repositioned the way people look at its products.

When people are talking about IPhones, they are not really comparing prices because they are just talking IPhones to IPhones. They are just one.

Perspective strategy is the basis of the domination method: the way you can dominate the market is by eliminating all the other competitors by changing the perspective.

That is, when you create an IPhone, there is nothing like an IPhone. So basically you have eliminated all your competitors.

In other words, you can reposition your business in order to create a perception of elite-ness or something that people would like to associate with.

Todos tenemos alguna prenda de ropa del grupo INDITEX

 

¿Dónde está el secreto del Imperio Inditex?

El mundo de la moda, durante estos últimos años, está teniendo una gran importancia en nuestra sociedad. Actualmente, prácticamente toda Europa, parte de Asia y América conocen la marca Zara, perteneciente al grupo empresarial INDITEX,  líder del sector textil.

 

 Entonces nos preguntamos: ¿Cómo ha conseguido tanto éxito y reconocimiento prácticamente mundial en esta industria donde la competencia es tan agresiva? ¿Qué le diferencia del resto de sus competidores? ¿Cómo es Inditex capaz de ofrecer al cliente lo que éste demanda en un tiempo récord de dos semanas?

Este éxito es debido a una buena implementación de las estrategias competitivas que hacen de INDITEX una compañía singular. Las claves del éxito son la estrategia de liderazgo en costes. Gracias a su economía de escala, los costes por producción son muy bajos en comparación con el margen de beneficio que obtienen.

 El modelo de negocio de Zara se centra fundamentalmente en la llegada de nuevos productos constantemente y siempre intentando seguir las modas más candentes en la calle y adaptando la moda de los grandes diseñadores a precios asequibles. Esta estrategia podría considerarse también una estrategia de diferenciación, desde el punto de vista de la exclusividad percibida por el cliente. La fabricación y los tiempos de distribución de las prendas son los pilares del liderazgo en costes, mientras que el diseño (las calles son las pasarelas), la imitación y la constante renovación de prendas es lo que le aporta diferenciación al Grupo.

En conclusión, Inditex con su particular modelo de negocio ha conseguido revolucionar el mundo de la moda, orientando toda su cadena de valor hacia el cliente.