CMP Starbucks Dunkin Donuts McDonald

MKT 501 – Marketing as Value Creation (Week 2 – Discussion)
Name – Ye Yint Lwin
ID - 2206210022
For this discussion, let me choose Starbucks company, and Dunkin Donuts and McDonald are
selected as the competitors.
CMP for Starbucks with Dunkin Donuts and McDonald
Critical success Based on Starbucks Dunkin McDonald

factors Industrial Donuts
Analysis
Weight Rating Score Rating Score Rating Score
Product Variety 0.2 4 0.8 1 0.2 2 0.4
Product Quality 0.15 4 0.6 3 0.45 3 0.3
Advertising 0.1 1 0.1 3 0.3 4 0.4
Price 0.1 3 0.3 3 0.3 2 0.2

Competitiveness
Market 0.1 2 0.2 3 0.3 4 0.4

Penetration
Stall Location 0.1 4 0.4 3 0.3 3 0.3
Employee 0.1 4 0.4 3 0.3 2 0.2

Dedication
Financial Profit 0.05 3 0.15 2 0.1 4 0.2

Customer 0.05 3 0.15 3 0.15 3 0.15
Loyalty
Market Share 0.05 4 0.2 3 0.2 3 0.6
Total 1 3.35 2.6 3.1
After analyzing the competitive profile matrix, Starbuck’s ranks second out of their two main
competitors, McDonalds and Dunkin Donuts. However, it is noteworthy that Starbuck’s two biggest
competitors have other primary focuses than just specialty retail coffee drinks. Also of note,
Starbucks is the clear leader in terms of financial position, customer service, innovation, market
share and product quality. All of these KPI’s are strong indicators of the company’s overall well-
being and confirmation of Starbucks dominance as the number one specialty coffee retailer in the
world. It is no big surprise that Starbucks is second to McDonalds in global expansion, brand
identity, customer loyalty, and top management. McDonalds has been a reputable, global
company for a longer period of time, but Starbucks is aggressively pursuing these 4 areas and will
likely surpass McDonalds in all categories in the coming years. Starbucks spends less money on
advertising than the other two competitors do.
Market penetration strategy

Starbucks should opt for an aggressive expansion strategy in emerging markets. The aggressive
strategic choice can be justified because Starbucks has a strong competitive position which can
be perfectly utilized in a fast-growing market. The company should utilize its internal strengths
to develop market share in emerging economies, in particular India and Brazil. It is
further recommended to enter new markets with the help of key strategic partners since they
dispose of the necessary market knowledge and political ties which can greatly facilitate the
entry. Moreover, the licensing strategy should be continued for new markets since it allows local
store managers to tailor store format, product mixes, and price points to the needs, lifestyles, and
tastes of local customers and communities.

Market development strategy in China
Starbucks has already made significant inroads into China. However, there still remains a lot
of untapped potential which the company can capitalize on. In China it is important to develop
marketing strategies that appeal to younger generations who fantasize about western coffee
culture as a symbol of modern lifestyle. Moreover, the importance of partnering up with
local retailers to gain market presence cannot be stressed enough. Since China is not
a homogenous market (it is far too big for that), Starbucks is advised to nurture
existing partnerships as each partner contributes different strengths and local expertise that can
help Starbucks gain an understanding of the different tastes and preferences of local Chinese
customers. Once the market is consolidated, Starbucks is advised to continue its centralization
strategy of buying back stores from local partners to increase profits and reduce the threat of
intellectual property theft.
Market segment development strategy

: Starbucks should apply a market segment development strategy for niche markets in developed
economies, in particular the single-serve-, courtesy-, and flavored coffee segments. Those
segments portray growth rates and must be exploited if the company plans to increase
market shares in established markets.

Product development strategy
On business level, the company is advised to further develop successful product lines
(Frappuccino, Paninis) so that they do not loose attractiveness in the eyes of customers.
Starbucks also has great growth potential in Tea and Fresh Juice products, and the company is
advised to build up those product lines alongside their core coffee and food products.

Product positioning strategy
: trendy products such as K-cups and VIA instant coffee packs need to be better positioned in
their respective segments in order to fully exploit profit potentials. The company is advised to
build better relationships with specialty retailers or convenient stores to clinch premium shelf
space for such product lines to increase customer awareness. Moreover, tailored
marketing campaigns are necessary to highlight the benefits such products have
over competitors.

Retrenchment Strategy
Starbucks should consider slimming-down unprofitable product categories, such as merchandise
and traditional coffee equipment. This will free up additional financial resources which is
necessary to further drive the extension of profitable and currently “hip” product lines. A
liquidation strategy for the entire merchandise category is not recommendable as certain
products still enjoy high demand among customers (e.g., tumblers and Verismo® machines).
Alliances
Typical question mark products, such as ground and whole bean coffee products, should not be
given up on since they portray the heart of Starbuck product portfolio. Growth in this segment
can be revived by forming alliances with key strategic retail partners (e.g., Tata Group or Kraft
Foods) who dispose of the necessary market spread to distribute traditional coffee product
References
Briefing, C. (2014, May 13). China’s Coffee Industry is Brewing. China Briefing

News. https://www.china-briefing.com/news/chinas-coffee-industry-is-brewing
Blacksell, G. (2011). How green is your

coffee? http://www.theguardian.com/environment/2011/oct/04/green-coffee (Retrieved:
19.05.2014
Chowdhury, S. (2012): Starbucks reveals long-term plans. In:

http://www.zacks.com/stock/news/88173/Starbucks-Reveals-LongTerm-Plans (Retrieved: 05.06.
2014)
Connor, M. (2013): Business Ethics 18 Annual Awards. In:

http://www.thecro.com/?q=node/167 (Retrieved: 08.05.2014)
Courtesy Products (2011): Starbucks to expand Premium Single-Serve Coffee Offerings.
In:https://www.courtesyproducts.com/order.php?
view=category&CatID=82&mode=viewrelease&PressReleaseID=6 (Retrieved: 12.06.2014)

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MKT 501 – Marketing as Value Creation (Week 2 – Discussion)

Name – Ye Yint Lwin

CMP for Starbucks with Dunkin Donuts and McDonald

Critical success Based on Starbucks Dunkin McDonald

Weight Rating Score Rating Score Rating Score

Product Variety 0.2 4 0.8 1 0.2 2 0.4

Product Quality 0.15 4 0.6 3 0.45 3 0.3

Advertising 0.1 1 0.1 3 0.3 4 0.4

Price 0.1 3 0.3 3 0.3 2 0.2

Market 0.1 2 0.2 3 0.3 4 0.4

Stall Location 0.1 4 0.4 3 0.3 3 0.3

Employee 0.1 4 0.4 3 0.3 2 0.2

Financial Profit 0.05 3 0.15 2 0.1 4 0.2

Market Share 0.05 4 0.2 3 0.2 3 0.6

Total 1 3.35 2.6 3.1

Market penetration strategy

Market segment development strategy

Briefing, C. (2014, May 13). China’s Coffee Industry is Brewing. China Briefing

Blacksell, G. (2011). How green is your

Chowdhury, S. (2012): Starbucks reveals long-term plans. In:

Connor, M. (2013): Business Ethics 18 Annual Awards. In:

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