Retail Business Analysis

Abstract

The objective of this research paper is to assess generic and segmentation strategies of retail business Start bucks. Starbucks from the initial have focused on concentrated segmentation strategy by emphasizing on demographic - and psycho-graphic segmentation. However, many researchers have found that with changing consumer needs and with tremendous growth observed in other coffee houses and retail businesses in U.S and across the globe, the market leadership position of Starbucks is at high risk. The discussion and analysis of paper would help identify how these strategies could be improved and impact the successful market or product.

Retail Business Analysis

Introduction

The companies operating in retail business establishments have facing various challenges related to cut throat completion and ever increasing need of the consumers. This has made essential for the companies to choose and implement the right strategies which makes them successful to become market leader and get edge over the competitors (Shaw, 2012). Michael Portal (1980) has proposed that generic strategies and segmentation strategies are highly significant in diverse areas of marketing of product. A business can either chooses overall cost leadership, focus or differentiation strategy to add value to the product and services they offer which provide them edge over the competitors. While overall cost leadership focus on achieving the maximum cost reductions and economies of scale across the firm activities, differentiation strategy focus on innovation and creativity of products and services which makes it unique in terms of usage, features and brand image, technology, customer service and dealer networks. The focus strategy is the third generic strategy which is commonly used for targeting the niche markets such as particular group in geographic or demographic market or with given product line (Yorke, 1993).

Segmentation on the other hand enables retail business to divide its market into different groups of buyers according to their specific behaviors, needs and characteristics (Zajac & Shortell, 1989). Segmentation as defined by Porter (1980) is successful business strategy to get competitive advantage by exploiting different markets with different products or existing product or product mixes.

Discussion

Overview of Starbucks

The selected retail establishment for this research paper is Starbucks which is the largest coffee house in the world having more than 9000 retail outlets of coffees in more than 50 countries. Some evidences suggest that Starbucks original generic strategy is focus strategy which is later changed with emphasis on differentiation strategy as company expand into international frontiers and ...