Starbucks

Consider the corporation you have selected to use in your first three assignments. Identify one of the firm’s major competitors that you would consider working for.

Research the company on its own website, the public filings on the Securities and Exchange Commission

EDGAR database

, the University’s

online databases

, the

Nexis Uni database

, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.

You will do a 15-minute presentation to the Board of Directors of the corporation. Develop an eight- to twelve-slide PowerPoint presentation with speaker notes or record a video based upon Assignments 1 through 3. You may choose to compare your chosen corporation to a major competitor with whom you would like to work. You will make recommendations to the Board of Directors based upon your analysis and decision on why the corporation remains or is not a good fit for you. 

Requirements

Determine the impact of the company’s mission, vision, and primary stakeholders on its overall success as a competitive employer in the industry.

• Create a SWOT analysis for the company to determine its major strengths, weaknesses, opportunities, and threats.
• Based on the SWOT analysis, outline a strategy for the company to capitalize on its strengths and opportunities, and minimize its weaknesses and threats.
• Discuss the various levels and types of strategies the firm may use to maximize its competitiveness and profitability.
• Outline a communications plan the company could use to make the strategies you recommend above known to all stakeholders. 
• Assess efforts by this corporation to be a responsible (ethical) corporate citizen and determine the impact these efforts (or lack thereof) have on the company’s bottom line. Provide specific examples to support your response.
• Develop an executive-level PowerPoint presentation with 8–12 slides with speaker notes and appropriate graphics or professional video.
• Go and locate at least three quality references. Note: Wikipedia and similar websites do not quality as academic resources.
• References must be submitted on a Works Cited page using SWS format.

Running head: STARBACKS’ MARKET ANALYSI 1

STARBUCKS’ MARKET ANALYSIS 4

Starbucks’ Market Analysis

Tabatha Hall-Politte

March 1, 2020

Introduction

The success of any organization is based on how well it will be able to align its internal and external operations. Various factors impact the process of the organizations, and thus, it’s the role of the organization management to align these factors with organization key objectives (Shaburishvili, 2017). In this case, the study will analyze the market and industrial factors that affect the operation of the Starbucks operation. In this study, the main focus will be laid in the analysis of the emerging that that affects its operation; market and industrial factors and also its strength and weaknesses.

Critical environments factors that affect Starbucks operation

Numerous factors affect the business operation, and these factors play a significant role in determining the performance of the organization. In this case, the study will analyze two factors – technology and globalization. The research will focus on investigating how these two factors impacts Starbuck’s operation and performance.

Globalization

The increase in globalization and International corporations affects how the business operates. Globalization affects Starbucks in two main ways – other organizations starting to invest in Starbucks ‘ traditional market and Starbucks finding a new market. Globalization has opened up new market and production sites, thus allowing the organization to start a company or sell their product in any part of the world (Voigt, 2017). These issues have resulted in increased competition to Starbucks products; on the other side, globalization has enabled Starbucks to grow by expanding new market. In the past few years, Starbucks has opened up new branches in other continents such as Europe and India. The opening up of the global market, to some extent, has facilitated Starbucks ‘ growth.

Technology

In the recent past, technology has become a key player in business operations despite the type of industry it operates. Starbucks has heavily used technology to improve the services it offers, marketing operations, and reaching to the other level in the global market. As the purpose and intent of taking coffee changes, from traditional use as the part of breakfast, to as a way of enjoyment, Starbucks have utilized technology to improve the quality of coffee meet people’s needs. Starbucks has used technology to enhance the smell of coffee and to obtain various varieties. Thus, this has enabled it to achieve the right customers’ experience.

Impacts of forces of competition on Starbucks operations

Starbucks Inc. operating in the competitive markets it is exposed to the five forces of competition. Since Starbucks is a service company, the main factors of competition that affect its operation are the bargaining power of the customers and the threat of substitute products. Starbucks has made all efforts to address the barging power of the customers and the threat of substitutes. Starbucks’ main focus in the last few years has been the aim to improve clients’ service. The company has improved the quality and varieties of coffee offered to enhance customers’ experience aiming at maintaining customers’ royalty (Sakal, 2018). Though, the addressing of threat of substitute product is hard to achieve, achieving clients’ royalty can serve a significant role in ensuring the customer doesn’t substitute coffee with other products.

Studying the Starbucks trends in addressing the issue of bargaining power and the threat of new substitutes, Starbucks is likely to focus more on improving clients’ experience. The company will engage in research and development to come with the best approach to offer their service. The company is aimed at coming with strategies that improve company service delivery from not just selling coffee but selling the experience. Thus, the company in the future is likely to design its coffee outlet offer place when people enjoy their free time.

External threats and opportunity of Starbucks

The main threats that face Starbucks operations include a new entry in the market, increased cost of production, regulation, and tax laws. Operating in a free market, Starbucks expects to receive increasing competitors; the company may experience the high cost of production depending on the area of production, and new business and tax regulations are forms of external organization threats. Starbucks being a big company can utilize the industrial organization model to maintain its market share (Sholihah, 2016). By use of the economic model, Starbucks can outdo its new rivals by reducing production and transaction costs, advertisement, and forming of the strategic alliances. Also, the organization can apply other deliberate moves to minimize competition by suppressing emerging small companies, thus making it hard to penetrate in the market.

The foremost opportunity of the Starbucks Company is its strong roots in its home market. This opportunity allows the organization to explore the new global market, drawing its support from its original company. This opportunity forms a unique capability as the organization can use the resources and experience to set new firms in the global markets.

Starbucks greatest strengths and most significant weaknesses

Starbucks Inc. is going well in its market since it can make billions every year, and its profit seems to grow yearly. Here are some of its greatest strengths that have facilitated the growth of excellent performance. Quality, profitability, and ethicality are the leading strength of Starbucks ‘ growth. Starbucks has established itself as a premium coffee house, offering high-quality products despite its vast market (Sholihah, 2019). The quality and pricing are customers friendly, and thus it has maintained its immense market. On the other side, like any other company Starbucks has its weakness. On the other hand, like any other company Starbucks has its weakness. The main weaknesses of Starbucks include high price point and lack of over product.

Starbuck to fully benefit from these strengths and address its weaknesses, and it can employ efficiency and reinvestment strategy. The company should use the profit obtained to improve its service and expanding to a new market. The company can use its vast advantage to conduct research and development to come up with unique products.

Starbucks’ resources, capabilities, and core competencies

The main in important Starbucks include human resources, retail shops, and brand value. Starbucks, at its initial stage, was able to develop a culture of employing and retaining high experience experts (Morais, 2014). Starbucks has robust brand equity; this an essential strength of the organization as it helps the brand from other products; thus, keeping it’s off from the competitors. Starbucks has managed to locate its retail shops in centrally located places; therefore, this serves as great company resources. The key Starbucks capability includes global experience; the organization can expand to any part of the globe. Worldwide expertise and presence help the organization to explore global markets, labor, and mean of production in different regions in the world. The company’s key competencies include customer services; the company has managed to apply various means and strategies to ensure its clients are satisfied. Producing a high-quality product is another crucial competence in Starbucks.

References

Morais, U. P., Pena, J., Shacket, K., Sintilus, L., Ruiz, R., Rivera, Y., & Mujtaba, B. G. (2014). Managing diverse employees at Starbucks: Focusing on ethics and inclusion. International Journal of Learning and Development, 4(3), 35.

Sakal, D. V. (2018). COMPANY ANALYSIS OF STARBUCKS CORPORATION.

Shaburishvili, S. (2017). The peculiarities of inclusive business development under globalization. Globalization & Business.

Sholihah, P. I., Ali, M., Ahmed, K., & Prabandari, S. P. (2016). The Strategy of Starbucks and it’s Effectiveness on its Operations in China, a SWOT Analysis. Asian Journal of Business and Management (ISSN: 2321–2802) Volume.

Voigt, K. I., Buliga, O., & Michl, K. (2017). Globalizing Coffee Culture: The Case of Starbucks. In Business Model Pioneers (pp. 41-53). Springer, Cham.

Running head: STARBUCKS 1

STARBUCKS 9

Starbucks

Tabatha Hall-Politte

March 3, 2020

Starbucks

Founded in 1971, Starbucks Corporation is an American coffee company. In addition to be a coffee company, it is also a coffeehouse chain (Azriuddin et al., 2020). The company was founded in Seattle, Washington. Today, Starbucks is seen as one of the largest coffee houses globally. This is because; the company has over 30,000 locations in various countries of the world (Azriuddin et al., 2020). The specialties offered at Starbucks include cold and hot coffee with pastries and sandwiches that are usually pre-packaged. Today, the varied Starbucks products are located in a number of grocery stores where they can be purchased by their consumers. Starbucks products are such as ice cream, bottled water, and coffee drinks.

Starbucks has over the years integrated a differentiation strategy on it number of products. This is seen a key business-level strategy at the company. The firm always makes sure that its consumers always expect more than just a cup of coffee. Therefore, the aim of the company is to develop the best products and quality services in all its global stores. Additionally, it has been seen that with over 30,000 stores globally, these stores are strategically positioned so that there can be an effective relationship with the host nations and neighborhood environments. This is an important factor in that the company can be able to develop a long-lasting business environment that is successful (Mason, Cole, & Goza, 2017).

The management at Starbucks also plays a significant role in that they seek to transform the company beyond its product differentiation. Therefore, it is seen that the company’s main strategy is to top the food and beverage industry. In 2015, Starbucks was seen to open various luxury stores where its customers are able to get more unique and expensive coffee assortment.

Furthermore, it is seen that Starbucks aim is to be in the industry for the long term. Therefore, differentiation is the strategy that helps them stay way ahead of their competitors in the market. Today, there are various Starbucks mobile trucks that ensure the customers are able to get their products conveniently and not having to go to the Starbuck stores (Lee, Moon, & Song, 2018). This is an important business strategy in that in the coming years, the company can be able to transform customer experience to new levels and at various different business levels. I believe that this business strategy of differentiation will help the firm achieve unique customer experience and also help the company expand its brand image. Differentiation has therefore helped Starbucks to tackle the ever-increasing competition in the food and beverage industry (Mason, Cole, & Goza, 2017). The differentiation strategy is therefore the best business strategy that Starbucks can be able to integrate so that they can achieve long term goals.

Question Two

It has been seen that business-level strategy is one of the fundamental aspects that each organization should be able to develop. The aspect of corporate level strategies is an example of the business-level strategy that can be used by the organization to compete favorably in the market. Starbucks business-level strategies are important in wading off competition and surviving the economy that is continually changing. The corporate-level strategy at Starbuck involved its diverse products and international strategies. In any company or organization in the world, the customers are the major stakeholder in that they are responsible for the success of the business. Therefore, customers are always the top priority at Starbucks so that the company prevents the major recession that happened in 2008 where customers declined purchasing Starbucks products due to high prices (Lee, Moon, & Song, 2018). Therefore, it is seen that Starbuck’s corporate-level strategy is to supply the highest products standards while continuing to maintain great work environment, diversity, and customer satisfaction. I believe that this strategy is important to Starbucks for the long term in that the firm seeks to satisfy consumers and provides services that are unmatchable and in the same way giving back to the community. Moreover, the corporate-level strategy has continued to help Starbucks realize profits and increased growth. It is seen that Starbucks first ensures the complete market dominance before its set’s insights on further expansion. The corporate-level strategy may be costly and difficult at first, but it has been able to give Starbucks an advantage of becoming one of the companies in the world that is growing very first.

Question Three

In this section, I will choose McDonalds Company which is seen as one of Starbucks fierce rivals alongside Dunkin’ Donuts. McDonald’s is a fast-food company based in the United States. The company has various branches globally in different countries. McDonald’s has been seen to sell various menus such as chicken and sandwiches, burger, drinks, sauces, bacon, and cakes (Schmid & Gombert, 2018). It has been seen that the entire McDonald’s menu is affordable and delicious. Therefore, these affordable prices are reasonably priced for everyone. With over 30,000 restaurants in 118 countries in the world, McDonald’s serves up to 46 million customers each day (Schmid & Gombert, 2018). McDonald’s is therefore globally known and holds a leading share in the world’s branded quick-service restaurant segment of the informal eating-out market in various countries.

When comparing the competitive environment, it is seen that Starbucks has inserted itself into the American urban culture more quickly than any other retailer in the US history. With this approach, the company has transformed the market industry. For instance, the company has been able to correctly define the right market segmentation. Here, Starbucks has stayed on top of the competition by competing on comfort rather than convenience as seen in its rivals like McDonald’s and Dunkin Donuts.

Additionally, Starbucks has over the years continued to base its focus in providing original products varieties that includes quality service, nice environments, and good coffee. This execution by Starbuck is also one of the competitive environment strategies that has helped the company stay on top of the competition (Voigt, Buliga, & Michl, 2016). Moreover, the management at Starbucks is superb in that they have one of the best leadership qualities. Howard Schultz, the company co-founder, has over the years continued to come up with innovative products. This has helped the company expand its product portfolio.

Starbucks has also expanded in the Chinese market. With China being the most populous countries with 1.4 billion residents, this was a major move for Starbucks. Most of the Chinese population are young hence there is a strong demand for Starbucks products. Currently, Starbucks has over 1,400 stores in China (Voigt, Buliga, & Michl, 2016).

Since its inception in 1940, McDonald’s has continued to supply a fast food and inexpensive menu. In 1990, McDonald’s transformed its corporate image by launching the “Fast and Convenient” brand. This involved a radical adjustment in the firm’s product portfolio to emerging market trends in the food industry (Mathur, n.d). After going through several difficult years, McDonald’s began turning things around. Today, the McDonald’s is more responsive to its customers and to the marketplace. In 2003, the company initiation a strategy dubbed “Plan to Win.” The company remodeled its stores, from a molded plastic booth to a brightly colored larger buildings having internet installed. In 2007, McDonald’s Coffee was rated better tasting than Starbucks by the Consumer Reports magazine.

In my opinion, I believe that Starbucks will be the most successful company for the long term. In the food and beverage industry, the economy is ever changing. It is seen that the various attempts of McDonald’s to outdo Starbucks in the market led to its own challenges. In fact, it may appear that McDonald’s attempts to outshine Starbucks have awoken the slumbering giant. Instead, McDonald’s will first need to get over its challenges before it can pose a threat to Starbucks. Additionally, it is seen that McDonald’s is a franchise while Starbucks is company owned. Therefore, franchises could be inconsistent in one area with which company owned Starbucks has more control over. Therefore, I would wager Starbuck to take advantage of surviving the most competitive environment.

Question Four

In this section, it is seen Starbuck is one of the firms that has prevented the imitation and copying of it brands and products without permission. This offers them a competitive advantage especially in the slow cycle markets. I therefore believe the Starbucks Corporation can be able to survive these cycle markets, be it slow or fast. Under the slow cycle markets, the company is observed to integrate the use of slow cycle alliances so that they can penetrate new markets and the markets that they are prevented from reaching (Nair & Weber, 2015). With this approach, the firm is able to improve its ability to successfully compete with its rivals in the global market.

To enhance it competitive advantage, Starbucks is seen to utilize its corporative strategy effectively (Nair & Weber, 2015). This strategy has been employed in that the employees at the company are able to be motivated and hence maintaining their jobs for the long term. Therefore, in slow cycle markets, Starbucks strategy is significant in that helps the company stabilize well hence ensuring long term success.

Consequently, the company is also able to survive in the fast cycle markets. Fast cycle markets are seen as being unpredictable, complex, and unstable. This market actually provides Starbucks with real competition. However, with the versatility present at Starbucks, it is seen that the company can be able to survive in any environment regardless of the present challenges. The company can be able to integrate new competitive advantages by differentiating its products to compete favorably with rivals such as McDonald’s and Dunkin Donut (Mathur, n.d). Additionally, the company is creating high customer experience by ensuring that its restaurants are well connected to the internet. This ensures the customers are connected to the internet and at the same time enjoying their coffee.

Starbucks has been seen to link up with some of its rival companies in the industry. For instance, it is seen that Starbucks has partnered with Keurig Coffee to buy certain products that are in demand. This is important to the company in that it is able to become successful even in the fast cycle markets.

Conclusion

Starbucks Company being one of the largest coffee houses globally, has been able to realize several instances of success over the years. With its superb leadership, the company has seen to accelerate its product development and penetrated new markets, hence overcoming competition. Moreover, Starbucks believes that it has a duty that corporations in the world today have a mandate to help people realize their dreams as Starbucks philosophy is to help citizens realize the American Dream.

References

Azriuddin, M., Kee, D. M., Hafizzudin, M., Fitri, M., Zakwan, M. A., AlSanousi, D., … Kurniawan, O. (2020). Becoming an International Brand: A Case Study of Starbucks. Journal of The Community Development in Asia, 3(1), 33-43. doi:10.32535/jcda.v3i1.706

Lee, W. S., Moon, J., & Song, M. (2018). Attributes of the coffee shop business related to customer satisfaction. Journal of Foodservice Business Research, 21(6), 628-641. doi:10.1080/15378020.2018.1524227

Mason, A., Cole, T., & Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE MANAGEMENT IN THE COFFEE INDUSTRY. Journal of International Management Studies, 17(1), 43-48. doi:10.18374/jims-17-1.4

Mathur, S. (n.d.). Glocalization in Fast Food Chains Glocalization in Fast Food Chains. Strategic Marketing Management and Tactics in the Service Industry, 330-347. doi:10.4018/978-1-5225-2475-5.ch013

Nair, A., & Weber, T. (2015). borjo coffeehouse: Franchise, Independence, and Starbucks. Entrepreneurship Theory and Practice, 41(5), 861-875. doi:10.1111/etap.12215

Schmid, S., & Gombert, A. (2018). McDonald’s: Is the Fast Food Icon Reaching the Limits of Growth? MIR Series in International Business, 155-171. doi:10.1007/978-3-319-74089-8_7

Voigt, K., Buliga, O., & Michl, K. (2016). Globalizing Coffee Culture: The Case of Starbucks. Management for Professionals, 41-53. doi:10.1007/978-3-319-38845-8_5