Answer to Question #203698 in Management for M.Imran

Question

Q1. An organization’s economic rationale for existence is ensured in its business model viability and identifying a source of competitive advantage. Keeping in view these concepts, elaborate the business model and competitive advantage of India’s Amul and Star Bucks case examples in light of learnt concepts during course sessions. 

Answer 1

Despite stiff competition in the dairy product category from Hindustan Lever, Nestle, and Britannia, GCMMF ensures that Amul's product mix and series are consistent with the company's fundamental principles of offering butter at a basic, affordable price to the general public. This pricing approach originally aided AMUL BUTTER in establishing its brand image in the home market. Amul now has 2.41 million milk producer members, with an average milk collection of 5.08 million litres per day, thanks to the successful application of its pricing plan. In addition to India, Amul has expanded into foreign markets such as Mauritius, the United Arab Emirates, the United States, Bangladesh, China, Singapore, Australia, Hong Kong, and a few South African nations. Amul's bid to enter the Japanese market in 1994 was unsuccessful, but the company is considering doing so again. Sri Lanka is one of the other possible markets being considered.

Starbucks' approach for gaining a long-term competitive edge is upon product differentiation. Starbucks distinguishes itself by providing a superior customer experience and high-quality coffee. Starbucks achieves the "Starbucks Experience" through well-designed locations with pleasant environment and well-trained employees. Starbucks aims to create and sustain a long-term relationship with customers by providing a connected experience. More than just good coffee, the coffee behemoth offers the "Starbucks Experience," which helps customers feel at ease and creates a strong emotional bond. Starbucks locations are meant to have a pleasant ambience and be easily accessible. Employees, according to Schultz, are the key to creating a pleasant customer experience. A variety of perks have been established, including health care, stock option plans, stock purchase plans, training, and recognition.