Starbuck Competitive Advantage

According to De Witt and Mayer (2004), competitive advantage depends on the business system that it has developed to relate itself to its business environment. A business system is the configuration of resources (input), activities (throughput), and product/service offerings (output) intended to create value for customers. Actually, beside than Starbuck's activities and product offering, Starbuck also used resources base to perform the value adding activities. According to QuickMBA (1999-2010), a resource-based view emphasizes that a firm utilizes its resources and capabilities to create a competitive advantage that ultimately results in superior value creation. Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. Capabilities refer to the firm's ability to utilize its resources effectively. DeWitt and Mayer classified firm resources into tangible and intangible resources. In addition, De Witt and Mayer (2004) recognized capability under intangible assets.

Tangible resources are all means available to the firm can be physically be observed (touched), such as building, machines, materials, land, and money. In this case, Starbuck's tangible resources that helped company to meet the market demand and competitive advantages was Starbuck store (building). One of their main objectives is to make Starbucks one of the most recognized and respected brand names in the world. In order for them to achieve this, they would continue to expand their retail operations and channels to make Starbuck widely available to the general public. Even, by 2004, Starbuck was opening on average three stores per day in US. At the end of year 2007, Starbuck has store as their tangible assets about 15,756 stores all around the world and 10,684 stores of it in US. Even, there are some stores directly across the street from each others to make it easier for customers to get their cup and increase brand awareness. Although some cannibalization was inevitable, Starbuck believed that opening multiple stores in some areas helped build the brand.

Intangible resources cannot be touched but are largely carried within people in organization. If tangible assets need to be purchased while intangible assets need to be developed. Moreover, intangible assets can be classified into rational resources and competences.