Business Strategy: Macro Environment, Internal Capabilities, Porter's Five Forces

This report discusses the influence of the macro environment and internal capabilities on business strategy. It explores the application of Porter's Five Forces model and various theories in strategic planning. The case of Starbucks is used as an example.

Business Strategy

Table of content
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Macro environment of company.......................................................................................1
TASK 2............................................................................................................................................3
P2. Internal environment as well as capabilities of organisation...........................................3
TASK 3............................................................................................................................................6
P3. Porter's five force model..................................................................................................6
TASK 4............................................................................................................................................7
P4. Application of various models as well as theories to interpret as well as strategic planning
................................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy signifies plan which is formulated by administration team of business
organisation in order to smooth running of company in an effective manner. It assists in
achieving competitive advantage over rivalries at Marketplace. It focuses on those strategies
which are implemented by administration team that help in accomplishing vision of business
organisation. This report is depends on organisation Starbucks. It is the International chain of
Coffee houses which is founded in year of 1971. This assignment will provide discussion
regarding influence of external atmosphere by adopting proper framework and assess internal
ability of organisation. Furthermore, they also provide explanation regarding porter's five Force
model that help in achieving competitive edge at Marketplace. By executing conception theories
and model that assists in conducting various work in an proper way (Arslangulov, 2017).
TASK 1
P1 Macro environment of company
The mission of business organisation is to offer wide variety of product and services to
customer according to their needs.
The vision of Starbucks is to accomplish leading position around world.
Objective:
 The objective of Starbucks is to increase sales by 20% in upcoming 1 year.
 They also focus on increasing profit margin by 10% in upcoming 6 month.
Therefore, macro environment signifies component and factor that imposes direct effect on
organisation in both a favourable or adverse manner. In order to control this kind of factor, the
management team of chosen organisation can adopt PESTEL analysis that is going to be
mentioned below:
PESTEL analysis is a tool that help organisation to scan external environmental factors
through which the organisation conduct their operations in proper way that help in taking better
decisions during specific period of time..
Political factor involves government political condition as well as laws and regulation in
many more. In context of Starbucks, it is determined as a global organisation having above
30,000 stores in different countries then the political factor imposes direct effect on company is
law and regulation. It is important for Starbucks Company to use rules and regulation for
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conduct operations and functions of organisation in an appropriate way that enforces positive
effect on organisation. On the other hand, due to stability in political condition of country such as
India and any other developing country in which the Starbucks start their outlets that imposes
adverse effect on the country. Therefore it is necessary for Starbucks to consider those factors in
order to run their business in an appropriate manner.
Economic factor involves unemployment rate, interest rate, exchange rate and many more
that imposes direct effect on company. Due to having low wage rate in US it provide affordable
cost of labour for conducting their work in an appropriate manner that increases positive effect
on company. In addition to this, Starbucks provide product and services to its user according to
their needs that help in achieving competitive edge over rivalries in the Marketplace. It increases
profit margin and sales in upcoming time period.
Social factor social factor involves taste, preferences, need and want of its customer that
enforces direct effect on organisation. The company provide products and services according to
need of customer that help in satisfy them. In addition to this, due to change in want of customer
so that it is impossible for business organisation to provide good like coffee according to their
need (Boduljak, 2019).
Technological factor Technology is very significance for organisation and it is important
for management team of Starbucks to execute latest technology for offering appropriate facilities
to user. Therefore, in context of a Starbucks they focus is on tied up with Apple to launch app
based discount for its customer and also launched free Wi-Fi in store that attracted large number
of user during particular phase of time period. In addition to this, due to increase in cost of
advanced technology that increases cost for the company that imposes negative effect on
organisation.
Environmental factors it involves climatic as well as weather condition that impose
positive effect on organisation. The organisation focuses on protecting environment in order to
provide eco-friendly goods to them that increases profit margin of organisation. In addition to
this, due to increasing rate of pollution that enforces negative effect on activity and functions of
business organisation.
Legal factor involves laws regulation which must be followed by company in order to
carry out their operations in an appropriate manner. Such as in context of Starbucks, their focus
is on confronting need for regulating in context of beverages so that the management team of
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chosen organisation focuses on regulating its goods as per law passed that imposes positive
effect on company. In addition of this, due to change in law in frequent manner it is not possible
for organisation to follow according to need of its user.
Stakeholder matrix- Stakeholder Matrix it is determined is activity to collect qualitative
data in order to assess interest of an individual person or improve policy accordingly.
High power low interest in reference of stakeholders possesses higher authority and low
attention within business organisation. The individual person include such as customer, sponsor
and many more. In reference of Starbucks, customer is determined as a stakeholder of this
Matrix and the consumer possess power of bringing changes within strategy of business
organisation. Therefore, they possess the interest because they do not take product according to
need and wants as well as they switch to another brand.
High power high interest it signifies individual person who possess high power as well as
high interest within business organisation. In context of Starbucks, it is necessary to implement
strategies within business organisation in order to increase success as well as growth in future
period of time.
Low interest Low power low interest it signifies those individual person who possess low
interest as well as low power because they do not increase their involvement within business
organisation. It determines these types of individual person who does not increase involvement
within business organisation.
Low power high interest it signifies internal user, employees as well as a stakeholder of
organisation. Employee possess high rate of interest because they increase their responsibility for
work but they do not possess power because they directly manage senior authority of
organisation (FIALA, 2016).
TASK 2
P2. Internal environment as well as capabilities of organisation
Starbucks is determined as a well known organisation that provide superior quality
product and services to its user in order to satisfy them. To assess micro as well as macro
environment of organisation, SWOT analysis is adopted by chosen organisation to identify
strength, opportunity, threat as well as weaknesses and many more. Therefore, SWOT analysis is
going to be mentioned below:
SWOT analysis
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Strength Weakness
 They provide qualitative product as
well as facilities to user for enhancing
profitability of organisation in
upcoming time period.
 Starbuck focuses on establishing their
business as a chain of coffee house
around the world that assists in
increasing ample of customer at
Marketplace.
 In addition to this, due to having lack of
unique good,such as Starbucks provide
different kind of product such as big
chocolate, chip cookies and many
more, they do not considered as a
unique product that is determined as a
main weakness of organisation.
 High price point due to having high
price of product as well as services
which is provided to Starbucks is the
only weaknesses of organisation.
Opportunities Threats
 High price point due to having high
price of product as well as services
which is provided to Starbucks is the
only weaknesses of organisation.
 The International Coffee chain can
adopt different kind of opportunities
such as global expansion which is
situated in US that is determined as
opportunity for organisation. The
Starbucks focuses on introducing
innovative product that is not similar to
other goods that is determined as
opportunities for organisation.
 There is some threat of organisation
such as fierce competition like due to
have a different a competitive firm such
as McDonald's, Donuts as well as many
more that imposes negative effect on
company.
 Due to economic recession that is
determined as a main threat for
organisation (Wurthmann, 2020)
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VRIO framework
It is determined as a strategy which is adopted by organisation to offer protection to
resources as well as the ability for achieving competitive advantage over rivalries at
Marketplace. The description related to VRIO analysis is going to be mentioned below:
Valuable resources include speciality coffee, financial capability, strong global presence as
well as brand image that is determined as a valuable resource for company. Due to having a
strong global presence it increases sales as well as market share of company in future period of
time. In assistance of this, Starbucks provide unique coffee beverages to its customer that help in
accomplishing competitive edge over competition in the market. It also increases reputation of
organisation in mind set of user at Marketplace. They are all are considered as a valuable
resources of firm. In addition to this, due to having good financial capability that helps in
providing superior quality product and services to its customers during particular phase of time
period (Hausman, 2016).
Rare there are different kind of rare resources which is provided by organisation that help in
achieving competitive advantage over rivalries at marketplace. Due to having a strong Global
presence, speciality coffee as well as brand image are determined as a rare resource for a firm.
Due to having a global presence to provide special coffee to its customer that is not imitable by
its competitive firm. In addition to this, they provide speciality coffee that help them in
increasing brand image of company in front of customer at Marketplace that is not copied by any
other competitive firm that help in increasing sales and profitability level of organisation.
Inimitable: In addition to this, due to superior brand image are those resources which are
not imitable by its competitive firm such as speciality coffee as well as brand image is
determined as inimitable resources for organisation. The Starbucks provides speciality coffee to
its customers for satisfying them. They also focus on providing unique quality coffee to its
customers that help in increasing brand image of organisation in front of customer at
marketplace. These resources are not imitable by its competitive firm and achieving competitive
advantage over rivalries at Marketplace.
Organised resources are those resources which is organised include brand image. The brand
image of organisation is a determined as an organised resource for organisation. The Starbucks
focuses on offering superior quality coffee to its user in order to satisfy them.
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TASK 3
P3. Porter's five force model
Porter's five force analysis
Porter 5 forces model is determined as a business model that is executed by various
organisations to monitor as well as control competition of a specific industry. This model is
given by Michael porter and offers five forces to assess competition level in particular industry.
The explanation related to this model in reference of Starbucks which is going to be mentioned
below:
Threat of new entrants this force signifies to establish innovative organisation in particular
industry. In context of Starbucks, this force is determined is low because respective organisation
focuses on operating its organisation in coffee and beverages sector that helps in increase sales
in future period of time. It is not easy for new organisation to implement their organisation in
that level and there are various rules as well as regulation that is significant to follow that impose
direct effect on business organisation.
Bargaining power of supplier Starbucks focuses on operating its organisation in various
nations, thus the management of organisation focuses on providing superior quality product and
services to its customer in order to satisfy them. The main focus is to achieving competitive
advantage over rivalries Marketplace (Ivy, 2019).
Bargaining power of buyers it is a significant force because this force imposes direct
effect on organisation. Therefore, it is necessary for business organisations to provide superior
quality product and services to its customers otherwise they switch their brand to other
competitive firm which erode profit of organisation. Therefore, a customer has a wider choice so
that it is necessary to provide them goods according to their need.
Threat of substitute product there are different kind of organisation that offer similar kinds
of goods and services as compared to its competitive firm during particular phase of time period.
There are different competitive firm provide similar kind of product and services like coffee as
well as beverages to its user in order to satisfy them. Therefore, it is necessary for organisation to
provide them coffee according to their need that help in increasing sales as well as profitability
level in future period of time.
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Rivalry among existing competitive it is determined as an element that it impose direct
effect on organisation. There are different kinds of organisation that operate their functions in
coffee sector that help in achieving competitive advantage over rivalries at Marketplace.
TASK 4
P4. Application of various models as well as theories to interpret as well as strategic planning
Strategic planning is an activity related to making appropriate strategy as well as plan for
organisation to improve or achieve success in business organisation. The process related to
planning includes development and improvement by using diversification strategy. It determines
vision and mission as well as objective which are improved for growth as well as success of
business organisation Louw and Temme, 2020).
Overview:
Starbucks is the American International chain of Coffee houses which is founded in year of
1971.It is the organisation focuses on operating it around 30,000 locations across globe.
Therefore, the Starbucks focuses on providing superior quality coffee to is customer in order to
satisfy them.
The mission of business organisation is to provide superior quality product and services to
its customer according to their needs.
The vision of Starbucks is to achieve leading position around world.
Objective:
 The objective of Starbucks is to increase sales by 20% in upcoming 1 year.
 They also focus on increasing profit margin by 10% in upcoming 6 month.
Strategy signifies a strategy as well as tactics that are improved by business organisation in
order to overcome from different kind of complexity that are created in company. In context of
diversification, the management team of used Ansoff matrix in order to provide superior quality
product and services to its customer. To achieve higher profit, the organisation focuses on
providing superior quality goods and services to its customers during particular phase of time
period (PROCHÁZKA, 2018). Herein, Ansoff matrix is used that is going to be mentioned
below:
Ansoff matrix is a framework which is used by Starbucks Company in order to increase
growth and success of business organisation in future period of time. This Matrix assists
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organisation to increase proper growth strategy for expansion of organisation in future period of
time. Therefore, this matrix is adopted by Starbucks is going to be mentioned below:
Market penetration is determined as a strategy in which the organisation provide current
product to its customers in present market. In this strategy, the organisation focuses on increasing
the market share of organisation and increase revenue in which future period of time. Therefore,
their focus is on increasing sales and profit margin in future period of time. Hence, it is the
strategy which is used by business organisation in order to provide coffee to its customers during
particular phase of time period.
Product development herein, the organisation focuses on providing products and services to
its customer in existing market. Therefore, organisation focuses on providing innovative goods
or will launch the same product in different version in order to provide unique coffee flavour to
its user that help in increasing brand image as well as reputation of company in front of user at
marketplace. Thus, their main focus is to promoting product and increasing awareness regarding
new flavour during particular phase of time period.
Market development is determined as a market expansion, herein; the organisation focuses
on providing existing product in the new market. The main focus is to provide superior quality
goods and services to its customers for satisfying them. The organisation focuses on providing
existing product in innovative market that help in increasing goodwill as well as reputation of
company in front of customer at Marketplace.
Diversification is determined as a growth strategy to introduce innovative product in new
market. Hence, it is determined as the risky strategy because a new product is provided in new
market during particular phase of time period. The main focus is to provide coffee to its
customer that helps in measuring competitive advantage over rivalries at market place.
Therefore, the Starbucks adopt diversification strategy for satisfying need and wants of
its customer during particular phase of time period (Rachma and Ismaeni, 2020).
CONCLUSION
On given report, it is assess that business strategy signifies plan which is formulated by
administration team of business organisation in order to smooth running of company in an
effective manner. It assists in achieving competitive advantage over rivalries at Marketplace. It
focuses on those strategies which are implemented by administration team that help in
accomplishing vision of business organisation. This assignment will provide discussion
8

regarding influence of external atmosphere by adopting proper framework and assess internal
ability of organisation. Furthermore, they also provide explanation regarding porter's five Force
model that help in achieving competitive edge at Marketplace. By executing conception theories
as well as model that helps in conducting different work in an appropriate manner.
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REFERENCES
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Osijek (Doctoral dissertation, Josip Juraj Strossmayer University of Osijek. Faculty of
Economics in Osijek. Chair of Economics and Business Management.).
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ekonomická v Praze).
Hausman, E., 2016. Business model evolution and service professionalization in micro
enterprises: a case study in the ICT consulting realm.
Ivy, J., 2019. Defining Your Methodology. Crafting Your Edge for Today's Job Market, pp.103-
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cz (Doctoral dissertation, Vysoká škola ekonomická v Praze).
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company PT DMP. In Contemporary Research on Business and Management: Proceedings of
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2019), 27-29 November, 2019, Jakarta, Indonesia (p. 186). CRC Press.
Wurthmann, K., 2020. The essential mix: six tools for strategy-making in the next
decade. Journal of Business Strategy.
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