logo

Starbucks Business Report for MSc Management Strategy Module

   

Added on  2020-12-22

25 Pages6301 Words409 Views
Name of ProgrammeMSc ManagementName of moduleStrategyQAA Level7TermSpringSRN NumberBP0230934 TitleStarbucks Business ReportSubmission Date28.04.2020Declaration:I state that I have read and understand universities plagiarism regulations, and this is myoriginal thesis, which has been studied, carried out, completed, and submitted as per BPPBusiness School requirements. The word count, excluding contents table, bibliography, andappendices, is 4152 words.Student Reference Number:BP0230934Date: 28.04.2020You comply with all the BPP rules and regulations concerning qualifications and awards for programmes by submitting this coursework. Please remember, you are fit to sit in your sentence. BPP University reserves the right to use any research submitted to a broader audience for educational purposes.BPP Business School1

M.S.C Management with streamsStrategyStarbucks Business reportStudent No: BP0230934Submission date: 28.04.2020 Submission mode: Turnitin online access2

Contents: Page Part-1 1: INTRODUCTION......................................................................4-52: EXTERNAL ENVIRONMENT ANALYSIS................................................ 6-82.1. Pestle analysis 2.2. Porter’s Five Forces Analysis 2.3. Life-Cycle Position3. INTERNAL ANALYSIS OF STARBUCKS..................................................9-143.1. Porter’s Value Chain Analysis of Starbucks3.2. VRIO Framework for Starbucks 3.3. Resources, Capabilities and Competencies framework 3.4.Competitive advantage of competitors4.RECOMMENDATIONS.............................................................................15 Part-25.STAKEHOLDER REPORT......................................................................16-176: REFERENCE LIST 7: APPENDICES Part -13

1.INTRODUCTION:Starbucks actually doesn't need a comprehensive intro, since it is the largest coffee supplier inthe world. When we think about quality coffee the name "Starbucks" comes to mind immediately.Jerry Baldwin, Zev Siegl, and Gordon Bowker first founded it in 1971, 3 young entrepreneurs andcoffee lovers, and thousands of shops have sprung up around the world since.Starbucks is alsothe leading coffee shop company in the world, with nearly 30,626 retail outlets as of the thirdquarter of 2019, followed distantly by such coffee shop chains as Dunkin Donuts with about10,000 locations, Tim Horton's with 4,300 outlets, and Costa Coffee with about 1,700 storesworldwide. (Figure:1)Figure 1 : Total Number of Starbucks Stores Worldwide(Lapitskiy, 2019)There are two types of outlets operating under the name Starbucks, run by business, andapproved stores. Around 30,000 stores are in operation, 52 per cent own the company and 48per cent authorised. That's a major factor for investors as the corporation's owned storegenerates an average of $1.28 million a year while licenced stores generate $189,000. There arerisks and costs associated with each retail type, but Starbucks allocates dynamically between thetwo depending on the geographic position of each store. (2019) (Google.com)Third wave coffee makers have since the 2000s targeted quality-minded coffee drinkers withhand-made coffee based on lighter roasts, whereas Starbucks nowadays use automated coffeemachines for efficiency purposes. 4

Figure 2: Market share of Starbucks and competitors. (Team, n.d.)For several years, The company has been battling its rivals – Dunkin' Donuts and McDonald's –for top spot as a coffee king. According to World Coffee Portal 2020, Starbucks has a total ofnearly 40 per cent share of the U.S. coffee shop market. Dunkin 'has maintained its position as thesecond leading chain with 9,570 outlets over the past 12 months, including 309 new (net) sites,representing a market share of 26 per cent. More than 4,700 U.S - focused caffeine shops nowoperate in JAB holding brands. About 78 per cent of U.S. coffee shops are now either Starbuckslocations, Dunkin' locations, or JAB locations. (Daily Coffee News, 2019)From its sincere start as a coffee roaster located in Seattle, Starbucks has attempted to build a"second house" for consumers to rest on their way to and from the job. The company hasinvested heavily in its brick-and-mortar stores in recent years by increasing its food offerings,renovating its restaurants and revamping its loyalty programs. If results are any indicator for Q42018, the company's approaches appear to work.Moreover Starbucks has a strategic advantage over its rivals including the value of the brandname, pricing strategy, product range, hospitality, HR strategy, suppliers and the global network,building and Keeping a long term engagement, Providing related customer experience. Brandawareness played a significant part in Starbucks' sustainable development. Nonetheless, due toits focus on quality and customer service, most customers will afford the high prices that it sets.(Figure:2)5

2. EXTERNAL ANALYSIS OF STARBUCKS:2.1. PESTLE ANALYSIS:Following the case Starbucks External Environment Examining the macro PESTLE factors as given below, Political factors which affect the business of Starbucks Coffee:Evaluation process PESTLE explains the impact that governments have on companies. Starbucks faces the following major external influences in its macro-environment:1. Regional alignment of the markets (opportunity)2. Improving Government infrastructure funding (opportunity) 3. Developing countries bureaucratic red tape (threat)Regional integration is an increasing concept and an external factor that allows the company togrow globally. Moreover, most governments around the world are building infrastructure, whichgives Starbucks the opportunity to enter more markets or suppliers. In most nations, however,bureaucratic bureaucratic red tape still exists. This external factor poses a challenge, asStarbucks is finding it harder to expand business, particularly in developing countries.Starbucks Coffee Important Economic Factors:In their macro-environment the company faces the following external economic factors:1. Rapidly expanding developing nations (opportunity)2. Declining unemployment rates (opportunity)3. Rising labour costs in the countries of the suppliers (threat)Fast economic growth in developing economies and growing unemployment levels give thebusiness opportunities to increase more revenue from different markets around the world. Thethat labour cost in developing countries, however, is an external factor that affects the companyas it raises the company's ingredient spending. The firm is the source of coffee beans from mostof the developed nations.Social Factors Influencing Starbucks Coffee’s External Environment:Starbucks must tackle the following social external factors: 1. Growing information about safety (opportunity) 2. Rising middle class (opportunity)4.Changing habits and tastes for customers (threats)5. Health and Well-being behaviour. (threats)6. Rapid growth of developments in technology and advances (threats)Starbucks has the potential to improve its sales based on rising demand for specialty coffee, dueto a growing coffee community and a growing middle class worldwide. The business also has thepotential to widen its range of nutritious items to draw health-conscious customers to cafés inStarbucks. Changing customer tastes and desires,Practices in fitness and health have guided foodand beverage industry behaviour, with businesses tailoring their menus to provide a moreorganic and healthy product mix. With additional growth sources such as the natural-energydrinks brand Refreshers and the super-premium bottled juice brand Evolution Fresh, Starbucks Coffee shop has capitalised on the advancement to attract health-conscious consumers. Rapidgrowth in Modern Age technical innovations and technologies has opened up new spaces forcompanies to build and exploit.6

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Comparing the Operations of Starbucks to that of Greggs
|19
|4698
|315

Starbucks Business Report
|18
|5230
|100

Development Report Date of Submission
|37
|8665
|9

Knowledge Management and Information Systems : Assignment
|15
|4262
|278