Prahalad and Hamel (1990) stated that only few companies have proven
themselves to be skilful at inventing new markets, quickly entering emerging markets
and radically changing the behaviours and preferences of customers in established
markets. They added that the decisive task of companies is to create an organization
that is capable of infusing products with irresistible functionality or creating products that customer need but have not yet even realized. Starbucks is definitely one of these companies. There is no doubt that the firm was able to introduce products that not only exude luxurious characteristics but also able to create coffee products that made the customers fell they need these coffees. Starbucks’ strategy is one built on developing its core competencies to add value to its products and establish an image of luxury and elegance. Core competencies, as defined by Prahalad and Hamel (1990), are “the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies” (p. 81). Starbucks’ core competencies are evident in its capability to harmonize its expertise in real estate, excellent marketing strategies, management capabilities, operational efficiency and human resource management.
Starbucks’ founder Howard Schultz wants to build a company that is truly unique.
The famed CEO capitalised on the company’s core competencies in order to gain competitive advantage and strategic competitiveness in the business. Taylor Clark
(2007) described Schultz as a maverick businessman who loves to do things his own
way and believes that he can achieve the impossible for his company. “This conviction that Starbucks can achieve the unachievable helps explain Schultz’s dismissal of any concerns about resistance to his company’s ubiquity” (Clark 2007, p. 137). Prahalad and Hamel (1990) state that core competence is not only about harmonising streams of technology, it is the...