Question

1. How might the firm Starbucks utilize a business-level cooperative strategy to create a competitive advantage?
2. Of these four business-level cooperative strategies: Complementary strategic alliances, Competition response strategy (Vertical or  Horizontal), Competition-reducing strategy, Uncertainty-reducing strategy. which is most likely to be of significant value to your team's firm? Why?
3. What are the risks associated with this strategy and how might they be managed?

Answer 1

- Starbucks can take up complementary strategic alliances with the major domestic player of the city or town they are in so as to make wonders and include some local cusiine or beverages on their list so as to reproduce and serve the same to the people in the Starbucks style. This would help them create a whole new strategic style as they would now be having the local flavors and beverages inside the international venue.

- For my firm the most applicable or suitable strategy would be the competition response strategy which is the vertical or horizontal integration. This is because, I’m into the clothing line business where I could make a great difference and increase in my profit ratio by lowering the costs if can save all the money I have to pay to the middle men who take a major percentage of the cost. This would also help me fetch a good pay for the sewers and the people who are involved in knitting, dying and making the clothe rolls ready before they are being stitched up into the final products.

And if we open a website and takeover the supply chain, again there would be a major saving on the cost. There would also be a major differentiation if the company opens their own retail stores and makes the products majorly available through these official outlets of the company.

The major risks associated with this are this might all turn into an unprofitable outcome and also affect the already established distribution channel of the company. For this the company should only take up the supply chain after making proper study of the outcomes and it should not be rushed decision.

There are possibilities that the backward integration for the raw materials would put us in more spending when there is an obsolescence of technologies and require heavy investment from time to time. So the company can make the raw material business more profitable if we are selling it to the outside manufacturing concerns.

All these might lead to losing focus and lack of focus on the original business as we have many side ones now. And this can be handled only by having ample squad for taking care of all these businesses.