There is no doubt that Starbucks is currently a market leader for coffee. It has established its image not only as a relaxing and deluxe coffee lounge but also a socially responsible company which promotes major environmental causes and sponsors local artists and musicians.

Perhaps by using Porter’s 5 Forces, we may gain some insight into  Starbucks’s success.

An important barrier to entry is the access to distribution channel. Starbucks exceeds in their distribution coverage considering that Starbucks can be found on almost every block of major cities in North America. The threats of substitute and rivalry have failed to affect Starbucks’s success.  Blenz coffee is a challenger in the same market but it does not have the in-style and modern image of Starbucks nor does it have such a wide distribution coverage like that of Starbucks. Buyer power is fairly weak because Starbucks has fragmented customers and supplier power is fairly high because Starbucks chooses suppliers that are 51% women, minority-owned, and socially or economically disadvantaged. Starbucks puts itself at risk by dealing with small suppliers instead of  big suppliers with better facilities and prices. However, Starbucks’s environmental and social ethics does build up its brand image, which explains its successful today.

http://www.quickmba.com/strategy/porter.shtml

http://www.starbucks.com/responsibility/diversity/suppliers

What evoked my interest in Japanese companies was our in-class discussion about Toyota’s success against the Big 3 in terms of automobile manufacture and sales. Just why has Japanese industry become so successful over the recent years? I believe it is because of their business strategy, or lack of strategy, as Michael Porter dictates in his article “What is strategy?”. I believe that the following factors have nurtured Japanese success:

• Low cost structure, including wages
• No legacy costs
• Effective government industrial policy
• Modernization after WWII leading to high capital intensity and productivity
• Economies of scale associated with increased exporting

However, as stated by Michael Porter, Japanese companies tend to imitate and emulate one another. Japan’s strength is that it is a leading nations in technology and machinery but this strength can turn into an eventual threat  when too many companies come into the market with essentially the same products and services.

Japanese companies need to set themselves apart from each other and Sony and Canon are examples of companies that have achieved such measures. Perhaps it is time for Japanese companies to stop competing and focus more on brand positioning and management.

http://en.wikibooks.org/wiki/Business_Strategy/The_Japanese_Challenge

Michael Porter:

http://web.ebscohost.com.ezproxy.library.ubc.ca/ehost/detail?vid=7&hid=112&sid=b0051154-f217-496e-8f4d-204f67903c80%40sessionmgr110&bdata=JmxvZ2luLmFzcCZzaXRlPWVob3N0LWxpdmU%3

In 2004, the average number of internet-users was 757 million people, which was 11.7 % of the world’ population. In 2010, the average number of internet-users grew to 1,966 million people, which is 28.7 % of the world population. According to the Internet world stats, the Internet has consolidated itself as a very powerful platform that has changed the way business run in a matter of very few years.

HP recently announced the launch of its plan to launch a new webOS smartphone in early 2011. Earlier this year, HP bought Palm, an early pioneer in handheld devices, for $1.2billion so it could have access Palm’s webOS operating system.

Smartphones are the result of our generation’s demand for social media everywhere we go. Social networks such as Youtube, Facebook, Twitter, and WordPress have contributed to the current trend of mobile internet devices. HP is one of the world’s largest information technology company and has dominated markets for PCs, servers, and printers. HP is introducing the smartphone to avoid being left behind in this global and profitable market. At the same time, many other PC makers Dell such as Lenovo and Acer are all looking into smartphones as well.

Internet World Stats:

http://www.internetworldstats.com/stats.htm

HP Smartphone Launch news:

http://www.bnn.ca/News/2010/10/6/HP-to-launch-webOS-smartphones-in-early-2011.aspx

I would say that the most important part of  marketing  is brand positioning and that brand management is where the big money lies. To achieve top-of-mind awareness in the consumer’s head, companies must position their brand so that it is clear, distinct, and more desirable relative to competing brands.

As we have discussed in class, the Body Shop is notable for its work in defending human rights, community trade, protecting the environment, and opposing animal testing. To the public, Body Shop is positioned as a highly ethical and environmentally friendly brand. Many people do not know that the Body Shop is owned L’Oreal, which is known for performing animal testing. The conflict between the two brands, Body Shop and L’Oreal, cannot be reconciled and thus their relationship is often concealed. Another example of this is the brands Ben and Jerry and Unilever. The two brands are unrelated and their brand images simply don’t fit.

For existing companies and new companies, it is best to follow the positioning tips given in Ries &Trout’s article on Product positioning: http://www.quickmba.com/marketing/ries-trout/positioning/

-Be #1 in a category (top-of-mind)

-Be #1 in a segment

-Grab an unoccupied position in a major segment

-Reposition the competitor

-Work the “product ladders” in consumers’ minds