Question

Why Competitive Response Strategy is the most likely to be significant value to Starbucks? What are the risks associated with this strategy and how might they be managed?

Answer 1

Answer - Starbucks has always maintained a continuous SWOT based strategies to scan environmental stimulants and thereby develop responses accordingly. In order to achieve competitive advantage and lead a sustainable business, Starbucks has adopted a competitive response strategy wherein, it scrutinized the environmental threats and opportunities posed from its market competitors and then develop reflexive responses to combat its effects. This has helped Starbucks maintain competitive sustainability and emerge out successfully among competitors.

One of the major risks associated with competitive response strategy is that Starbucks might not be able to capture the right conditions in which its competitors are acting and thereby just to imitate the strategies and develop their response against the competitors they might sometimes end up in the execution of strategies irrelevant to their own business and adversely affect business and brand equity. So in order to avoid this problem, Starbucks should carefully scan and monitor the parameters that directly or indirectly influence their competitor's actions, tally ist impact on Starbucks business and then develop competitive response strategies in favour of their own business.