1. What functional strategies at Starbucks’ help the company to achieve superior financial performance?
2. Identify the resources, capabilities, and distinctive competencies of Starbucks?
3. How do Starbucks’ resources, capabilities, and distinctive competencies translate into superior financial performance?
4. Why do you think Starbucks’ prefers to own its own stores wherever possible?
5. How secure is Starbucks’ competitive advantage? What are the barriers to imitation here?

In 2006, Starbucks’, the ubiquitous coffee retailer, closed a decade of astounding financial performance. Sales had increased from $697 million to $7.8 billion and net profits from $36 million to $540 million. In 2006, Starbucks’ was earning a return on invested capital of 25.5%, which was impressive by any measure, and the company was forecasted to continue growing earnings and maintain high profits through to the end of the decade. How did this come about?