Business Plan for Starbucks: Analysis of Internal and External Environment

MAJOR PROJECT PAPER

ABSTRACT
In order to explore the business in some different market and location an analysis of that
place and its associated aspects including market and external environment plays an important
role. As along with changing trends occurrence of changes and fluctuations in customer's
preferences are very common. Thus, an analysis of business review in comparison of the planned
destination enable the company to have a gathering of relevant information from which it can
make exploration of its business activities. An analysis of market, strategic plans, human capital
and technological factors are counted as major aspects with association of every business that
may put a major impact over the company and its operations. Starbucks which is one of the most
famous retailing coffee house and rostery reserve of U.S. It operates its outlets in a number of
countries. Also, it has a major customer share across the various countries of the world. This
project will details and discuss various aspects and elements in association with Starbucks that
may plays an important role with respect to raising efficiency and performance of the business.
Various major aspects including industry analysis, business review, research made on concerned
organization and associated factors, its analysis and preparation of business plan for future
projection and direction towards the enhancement of its performance will also be a part of this
report.

Table of Contents
ABSTRACT.....................................................................................................................................2
1.0 INTRODUCTION.....................................................................................................................5
1.1 Industry and company background........................................................................................5
1.1.1 Analysis of internal and external environment with regard to company............................8
1.2 Business opportunities.........................................................................................................11
1.3 Purpose and rationale...........................................................................................................11
1.4 Terms of references..............................................................................................................12
2.0 BUSINESS REVIEW..............................................................................................................14
2.1 How market effectiveness can affect long term goals and key performance of an
organization................................................................................................................................14
2.2 Strategic planning process influence important strategic decisions taken...........................17
2.3 Management of technology and innovation lead to development of business opportunities
....................................................................................................................................................19
2.4 Human capital productivity led to increase in productivity and innovation of skills..........21
3.0 RESEARCH DESIGN.............................................................................................................25
3.1 Research Methods................................................................................................................25
3.2 Collection Methods..............................................................................................................26
3.3 Ethical considerations..........................................................................................................26
4.0-DATA ANALYSIS.................................................................................................................28
4.1 Case Analysis.......................................................................................................................28
4.1.1 Marketing Effectiveness- Long term Goals and KPI........................................................28
4.1.2 Strategic planning process................................................................................................30
4.1.3 Management of technology and innovation......................................................................31
4.1.4 Human capital productivity (Increase in productivity, innovation of skills)....................33
5.0 CONCLUSION AND RECOMMENDATIONS....................................................................35
5.1 Vision and Mission .............................................................................................................35
5.2 Objectives............................................................................................................................35
5.3 Functional Plan 1 Marketing................................................................................................35
5.4 Functional Plan 2 Human resource......................................................................................37

5.5 Functional Plan 3 Technology.............................................................................................38
5.6 Functional Plan 4 Finance....................................................................................................39
5.7 Implementation schedule: Gantt Chart................................................................................42
5.8 Critical success factors.........................................................................................................43
5.9 Risk mitigation/contingency plan........................................................................................44
REFERENCES................................................................................................................................1

1.0 INTRODUCTION
Business plan refers to a detailed plan under which various strategies and analysis with
regard to a specific business are considered. Under this various steps and strategies related with
the business are determined so that it will assist the concerned company and the business towards
its objectives (Ekanem, 2017). As Starbucks is one of the well known and famous coffee
retailing chain of US. It operate across various countries through its number of stores. Being a
well known brand this business plan will lead the company to furthermore raise its performance.
With regard to the use of technology or the product diversification this company can better serve
its customers. An infusion of technology and digitalization along with focussing over
diversifying its products with a consideration towards the pricing strategies enable the company
to have top have better serving and performance. This business plan will discuss about every
aspect with regard to Starbucks that it need to focus and consider while framing its plan and
strategies related with performance raising. A detailed discussion related with industry and
reviewing its business strategies, making of market research and analysis of its finding will also
be a part of this business plan. This business plan will help the company to enhance its
performance with the focus over its strengths and considering its weakness so that better
customer satisfaction and serving will be enabled.
1.1 Industry and company background
Retail coffee and snacks industry:
It is one of the major industry with regard to the Malaysia and its economy. Cafes and
coffee shops are counted as quick service restaurants. These shops are serving a large number of
customers across the years. With respect to Malaysia's coffee addiction in respect to coffee shops
market is in the situation of developing state. Public of Malaysia are fond of specialized and high
quality coffee. With the changing trends they are getting attracted towards the coffee and other
associated products. Existing companies in Malaysia is also delivering its best with regard to the
delivery of premium quality coffee to meet the demand of its customers. Being a carrier of wide
scope and serving, coffee industry with regard to Malaysia is raising day by day. Being a
composite of coffee lovers this industry is serving a big percentage of contribution with regard to
the GDP of Malaysia and towards its economy. Being a consumer oriented industry and raising

trend and attraction of customer towards the coffee industry there are higher chances of grabbing
of success with regard to concerned companies.
Source: Total coffee consumption in Malaysia from 2009 to 2018., 2021
From the above data it is very clear that the consumption of coffee across the market of
Malaysia is fluctuating but in a raising state. As it decline in 2011 which again raised in 2017. As
the consumption of coffee is showing a rising trends, which make it clear that the exploration of
coffee market in case of Malaysia is of worth and lead to bring success and growth to the coming
company.
Company's overview:
Starbucks is one of the leading coffee company of UK. It is a multinational chain of
coffee house of America. Its headquarter is in Seattle, Washington. It was founded on 1971. Its
founder includes Gordon Bowker, Zev Siegi, Jerry Baldwin. It is famous for serving true essence
of coffee to its customers. It roasts high quality whole beans of coffee. Its main mission is related
with inspiring and nurturing the human spirit. Apart from being professionalized in coffee it also
offers variety of products including teas, pastries, and other items too. Its main focus is to deliver
Illustration 1: Coffee consumption in Malaysia

the best and quality products with regard to its customers. It operates around 31,256 stores across
worldwide (Company Information, 2021). Being a operator of specialized and high quality coffee
its business performance with respect to customer share is also high across many countries like
US and UK.
1.1.1 Analysis of internal and external environment with regard to company
Internal environment analysis:
Under this analysis, internal environment and its factors are need to be analyse. This
analysis is the base by which company can predict and formulate its future strategies and
policies. Under this analysis, internal factors are being considered.
TOWS analysis:
This analysis uses a variety and combination of factors in association with the company.
This combination includes SO, ST, WO and WT.
Figure 1TOWS analysis
Source: An introduction to TOWS Analysis, 2021
Strength opportunity:

This combination enable grabbing of opportunities with the use of strength. Strong brand
image, high financial performance, extensive growth in stores, extensive supply chain, high
quality, taste, standardization, moderate level of diversification with respect to its products, high
quality treatment of its employees are some of its strength by which it is counted as top rated
coffee store. With the use of these strength Starbucks may grab the future opportunities in the
form of exploration of its business and winning competitive position.
Strength Threat:
As per this combination with the use of strength, threats will be reduced and mitigated.
High rising competition, imitation, covid restrictions, rising prices of coffee beans, global
recession, changing rules and regulations, are some threats that may affect the business of
Starbucks. However, with the use of its strength like brand value, high quality, taste and various
other Starbucks can mitigate its threat intensity.
Weakness opportunity:
Here weakness will be reduced and future opportunities will be grabbed by the company.
High price products, chances of imitability of its products, tax avoidance in Europe, procurement
practices, general standard with respect to its products are all weakness with respect to Starbucks
which are needed to be mitigated in order to grab opportunity of near future including becoming
market player.
Weakness threats:
It includes the threat that may affect the company due to existence of weakness. As
Starbucks have weakness with respect to high price products, chances of imitability which will
increase the intensity of threats that my affect the Starbucks in the form of meeting competition,
meeting the situation of high prices of coffee beans and various others.
McKinsey 7S Model:
In order to identify internal analysis McKinsey model plays an important role with regard
to Starbucks. As this model is related with every aspect of the internal environment of the
company so with the implication of this model Starbucks will critically and carefully analyse its
internal situation. It includes: