Ch. 6 of our text reminds us that businesses must be able to be flexible and innovative in their strategies in the face of an ever-changing external environment. The theory of competitive interaction describes a cycle (Exhibit 6.1 Phases of Competitive Interaction on pg. 186) in which competitive actions generate reactions.
A market leader in coffee sales, Starbucks can be a difficult force to compete with for the local coffee shops. However, as discussed in a previous entry, larger business like McDonald's and Dunkin' Donuts can pose a threat to Starbucks' sales when they offer customers such advantages as convenience and cost-savings. How then does Starbucks' react to competitive reactions such as McDonald's new McCafe line? For one, Starbucks has been expanding its product line by acquiring Bay Bread LLC and its LaBoulange Bakery brand. Beginning with its Seattle locations, Starbucks has recently started integrating LaBoulange Bakery baked goods. I will discuss Starbucks' acquisitions in a later entry when it becomes a topic of focus in our text.
Starbucks has also moved into new arenas, expanding globally further into locations such as China and Japan (which will be discussed further in an upcoming entry about international strategy).
This is a great company to follow. I missed some good stock opportunities over the years with this company.
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