Starbucks Strategic Analysis

This assignment provides a comprehensive analysis of Starbucks Corporation's strategic management. It delves into the company's external environment using a PESTLE analysis, examines its financial performance indicators like revenue growth and profitability, and assesses its market position within the competitive landscape. The analysis incorporates relevant data from sources like financial reports, industry publications, and online platforms to provide a holistic understanding of Starbucks' strategic direction and success factors.

Project Formulation and
Business Planning

EXECUTIVE SUMMARY
In the present report, Starbucks has been taken which is the manufacturing industry of
coffee products. In this context, report identified that business has unique features and
opportunities to develop their operations and functions to enhance profitability through operate
functions at different place. Market strategy is successful aspect that assists to increase profits
and revenue in different areas of operations. Financial position of the business is very effective
that assists to expand operations and functions new places successfully. Further, staff members
and their management is also effective that assists to enhance profits and revenue from several
functions.

Table of Contents
INTRODUCTION...........................................................................................................................1
BUSINESS DESCRIPTION............................................................................................................1
History and concept of business..................................................................................................1
Market for the organisation.........................................................................................................2
Business kind..............................................................................................................................3
Product and service ....................................................................................................................3
People in the organisation...........................................................................................................4
Financial status............................................................................................................................4
BUSINESS ENVIRONMENT ANALYSIS...................................................................................4
INDUSTRY BACKGROUND........................................................................................................6
Defining existing product and services.......................................................................................6
Size of industry...........................................................................................................................6
Important trends..........................................................................................................................6
Barrier to entry............................................................................................................................7
COMPETITIVE ANALYSIS..........................................................................................................7
Identify competitors....................................................................................................................7
Distinguish with rivals ...............................................................................................................7
Threats from competition............................................................................................................7
MARKET ANALYSIS....................................................................................................................8
Assess size of market and growth...............................................................................................8
Define target market....................................................................................................................8
Value proposition........................................................................................................................9
MARKET PLANNING...................................................................................................................9
Develop market planning............................................................................................................9
Marketing mix...........................................................................................................................13
OPERATIONS PLAN...................................................................................................................14
Operations ................................................................................................................................14
Break even point.......................................................................................................................15

Key success factors...................................................................................................................16
MANAGEMENT SUMMARY.....................................................................................................16
FINANCIAL PLAN.......................................................................................................................17
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Project formulation is very important concept to develop profitability through solve
issues and establish new project. In this aspect, problems also consist as greater concern point
which need to be solved on time (Kerr, Rouse and de Villiers, 2015). In these there can be
various issues such as technology selection, appropriate place, size of plant, products, etc. In
addition to this, business plan has also important role that required to convey structure of
business, activities need to be performed, duties of employees, etc. Further, it also determines act
that ensure business goals, selection of targets and milestones of operations (Sekaran and
Bougie, 2016).
Present study is based on the Starbucks which is the coffee company of America
providing different types of coffee products in market. They served hot and cold drinks, bean
coffee, espresso, café latte, etc. For gaining insight knowledge of the organisation, report
analysis industry and market environment to diagnose more and better opportunities.
Furthermore, it demonstrates key strategies that can lead successful operations and functions in
chosen business unit. In addition to this, product and services of the chosen organisation
classified that enhance profitability at workplace. At last, it includes competitive analysis to
assess competitors, assess threats and market to target customers.
BUSINESS DESCRIPTION
History and concept of business
Starbucks is an American coffee enterprise and ascertain operations as coffee house
chain. This company established in Seattle, in Washington in 1971. From the help of last year
data, in November 2016 the company operates in 23,768 branches all over the world. This
business consists as main representative that distinguishes itself with coffee serving venues. In
addition to this, the chosen enterprise focuses on quality, taste and customer experience with
popularizing darkly roasted coffee (Ghazouani, Faris and Sayouti, 2014). Firstly, the chosen firm
opened in Seattle on March 31st, 1971 with only three partners. They all met when studied at
university of San Francisco. First store of the company was established in Seattle at 2000
Western Avenue from 1971-1976. History of the organisation has been elaborated in the
following table:
Year History
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1971 In this year, firstly Starbucks opened in Seattle with three
partners that are Gordon Bowker, Jerry Baldwin and Zev Sieg.
1987 In 1987, owners of the enterprise sold their company to former
employee Howard Schultz who re branded outlets of the
enterprise (Simon, Fischbach and Schoder, 2014).
1992 The enterprise offered initial public offers that were issued in
market as stock in June 1992.
2002 Magazine launched in this year which named as Fortune and it
shows one of the best enterprise Starbucks from 100.
Market for the organisation
In order to expand operations and functions, first outlet of Starbucks exists in North
America that opened in Tokyo, Japan in 1996. In respect to assess the market of the chosen
business it can be demonstrated in following manner:
 Segmentation: Market segmentation is the oldest method of marketing. In this aspect,
market can be classified in order to possess functions and operations in 4 categories such
as demographic, behavioural, psycho graphic and geographic segmentation (Maryska and
Novotny, 2013). Demographic segmentation is the simplest form of market segmentation
which is used by the company to get right target population that use product and services
of business. With this regard, several bases can be adopted by the enterprise such as age,
gender, income, race, etc. Further, behavioural segmentation divided population on the
basis of usage, decision making pattern and behaviour (Löfving, Säfsten and Winroth,
2014). Along with this, psycho graphic segmentation defines on the basis of lifestyle of
people, their activities, interests, etc. In geographic segmentation, the business can
demonstrate segment on the basis of geography. From the above segmentations,
Starbucks using demographic and geographic segmentation to cater their operations. In
demographic, the chosen business classified market in term of age, gender, income,
ethnic and family life cycle (Skokan, Pawliczek and Piszczur, 2013). On the basis of age
group, the chosen organisation set their group aged of 25 to 55 years. On the other hand,
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on the basis of geographic segmentation the chosen enterprise located business at various
places such as near offices, college campuses, etc.
 Targeting: In order to target audience, Starbucks mainly include young age group of
people such as 18-24 years. With the growth of technology and innovative ideas, the
business easily targeted young people (Morecroft, 2015). Further, the enterprise also
targets 25-44 age group of people through offer them different types of drinks.
 Positioning: In order to make effective positioning, Starbucks positioned itself with
making distinguish products and services from competition. It assists to gives several
advantages to create effective brand of goods. Therefore, it can be stated that, company
position based on the sustainable competitive advantages and customer service strategy
(Larmer, Mergendoller and Boss, 2015).
Business kind
Starbucks is manufacturer kind of business of coffee products and services. In this aspect,
several types of other products are also supplied by the company to enhance their outcomes and
results in successful manner (Bamberger, Biron and Meshoulam, 2014).
Product and service
Starbucks demonstrates their functions and operations in different market. Their products
classified as follows:
 Coffee of mocha and lattes
 Tea of Tazo brand
 Pastries
 Smoothies
 Biscuits
 Breakfast sandwiches
These all products provide by company in great extent. In addition to this, there are other
product categories determines by Starbucks that demonstrate as follows:
Products Different types
Coffee which is portion pack Blend of berry coffee, Dunn brothers, Seattle
best, peace, etc.
Teas Oregon chai, Bigelow tea, shangri la silk bags,
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Caribou tea, etc. (Experience Berry Coffee
Service!, 2017).
Instant beverages Hot chocolate, Cold instant drinks,
Cappuccino, etc.
Coffee- Bulk or whole bean Caribou whole bean, peace coffee whole bean,
etc.
Creamers and sweeteners Creamer, sweetener, sugar, syrups, etc.
Juice and special drinks V8, Veryfine, Welch's, snapple, etc.
Cups and lids Cups, lids, clutches, etc. (Meyer, 2016).
People in the organisation
In the Starbucks, there are more than 238,000 employees working to serve product and
services to different customers. Main key people of the business are Howard Schultz who is
executive chairman and Kevin Johnson who is president and CEO of the selected business unit.
Financial status
In respect to make effective functions, financial position of the business determines in
significant manner. Current financial position of the enterprise (Rothaermel, 2015).
BUSINESS ENVIRONMENT ANALYSIS
Environment analysis is strategic too that consist process to assess internal and external
elements which can be affect inside and outside from the business. In Starbucks, this analysis
entitles to assess level of threat and opportunity in the enterprise (Greasley, 2017).
PESTLE analysis
PESTLE analysis in Starbucks operates several characteristics that ongoing for global
economic recession. Following elements included in external environment analysis for chosen
business: Political factors: Political factors includes tax policy, employment laws, government
rules and regulations, etc. These factors highly impacted on the operations and functions
of chosen business performances of Starbucks. In Australia market, there is political
stability within the nation which could be positively impact on the chosen enterprise
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operations (Locatelli, Mancini and Romano, 2014). However, in this nation, laws and
regulation determines important role which need to be followed to make successful
operations in business unit. Economic factors: In Australia market, there is global economic recession continuously
take place which is the prime external driver for Starbucks. This factor denotes
profitability for the chosen business and also convinced buyers to shift towards
alternatives (Marcelino-Sádaba, Pérez-Ezcurdia and Villanueva, 2014). However, there
are some other elements which affect to the selected enterprise in significant manner such
as local currency exchange rates, taxation level and local economic environment. Social factors: Starbucks also determines cheap products to attract lower level customers.
This create positive impact to expand customer base in market. However, it creates
challenge which face by company in starting time (Khanagha, Volberda and Oshri,
2014). Further, there are certain elements in social factors which impact on the business
operations such as consumer preferences, changes in work pattern, changes in lifestyle
population, Technological factors: In Australia market, Starbucks has positive impact in term of
enjoying benefits due to advance technology. In this aspect, the chosen enterprise can
implement Wi-Fi to customers because internet is very important for them (Mollick,
2014). It added values to the brand and also increase experience of consumer to make
effective functions. However, implementation of advance technology required high cost
to the company. Legal factors: Starbucks also ensures that they need to follows laws and regulations to
attract customer in business. In Australia, there are several policies and regulations affect
to the company such as introducing of customs, licensing regulations related to industry,
etc. (PESTLE Analysis of Starbucks, 2017).
 Environmental factors: Starbucks concern with international activity and advocacy
group. In the selected market, there are several environment rules, regulations exists
which need to be followed by business to produce effective coffee beans. Further, global
warming and another issues which impact to the selected business (Oriesek and Schwarz,
2016).
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INDUSTRY BACKGROUND
Defining existing product and services
Starbucks has several existing products and services such as coffee, teas, creamers &
sweeteners, instant beverage, juices, etc. These all products selling by the organisation with
effective price and quality. Thus, customers easily attracted towards the business that make
successful operations (Kam, Song and Senaratna, 2016).
Size of industry
Starbucks size is very wide because it has several branches in different cities and
countries. Total stores of the chosen company are 22,519 in different locations such as
Argentina, Aruba, Australia, Bahamas, Hong Kong, Monaco, Morocco, Taiwan, Switzerland,
Malasiya, Kuwait, and many other countries. Therefore, it can be stated that the chosen business
has wide variety of market and different products sell by company to attract customer (Tan,
Yavuz and Çamlıbel, 2016).
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Illustration 1: PESTLE analysis

Important trends
In order to determines recent trends, Starbucks leading with innovations of new products
and services. They are as follows:
 Starbucks Reserve brand: Starbucks expects to demonstrate their functions and
operations in more than 37,000 stores in 2021. More than 12,000 stores need to be stores
at global market. Therefore, it elevating experience all over the world (Harris, 2017).
 Cold is hot: The chosen enterprise expects to enhance category of cold coffee in next
three years. With the help of build products nationwide, Starbucks launch their cold brew
coffee in previous year. In addition to this, the organisation also offers high quality coffee
in two different cities (Simon, Fischbach and Schoder, 2014).
 Teavana all over the world: Teavana's hot and iced teas available to participate by
Starbucks stores at global market. In the types of green tea citrus mint flavour and honey
tea also launched in different places of international market (Botha, Kourie and Snyman,
2014).
 Enabling entrepreneurs: Further, Starbucks has also innovated their trends through
make snacks. In this way, the company has made organic chickpea puffs with 100
calories in each pack with 3 grams of protein. With this regard, the selected enterprise
launched more than 15 small brands to make strong position in various nations (Cassidy,
2016).
 Rare coffees from remote locations: There are several remote areas destinations where
Starbucks wants to expand their business and operations. Starbucks demanded to open
1000 brands with reserve coffee at New York, Chicago, Baltimore, Boston, etc.
Barrier to entry
In several markets and place, Starbucks face the biggest challenges for growing market
share such as China and India. In order to grow consumer packaged goods segment, rival also
take place from retail store. With the help of Porter five forces, better ideas can be develops to
accomplish competitive advantages. Barrier to entry by different business is high so that it
creates problem to the business to operate functions and operations in different areas (Hill, Jones
and Schilling, 2014).
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COMPETITIVE ANALYSIS
Identify competitors
There are several competitors of Starbucks such as McCafe, Nestle, Dunkin's Donusts
and Kraft General foods, etc.
Distinguish with rivals
Starbucks has various loyal customers from more than 68 nations over 23,000 locations.
Coffee is the main organisation so that at Australian market various retail chain also exist. From
the help of coffee supply chain unique attributes can be choose by customers to make effective
results. In the Australia, there are retail components is the main rival to the selected organisation.
In order to make distinguish product and services, Starbucks develop their functions with
qualitative material. Therefore, it assists to attract customer in business unit with unique
attributes (Ghazouani, Faris and Sayouti, 2014).
Threats from competition
In order to determines effective results, Starbucks has moderate threat of substitution
products. This is because, in Australia there is moderate cost of doing operations, supply chain
cost and high cost of brand development. New entrants have significant and strong effect on the
chosen business performances. However, quality of the organisation is so good so that customer
never switch to other brand easily (Kerr, Rouse and de Villiers, 2015).
MARKET ANALYSIS
Assess size of market and growth
Starbucks performances assists to analysis market to identify customers and their needs
as well. Further, market growth rate is crucial element to assess it in significant manner. It also
enhances sales in term of assessment of customer base in a given period. With the help of
understanding market growth rate, sales can be relate to assess success for given product and
services to make important decisions. In the year of 2017, Starbucks improves their revenue by
the 13.38% and output is 3.74% growth (Skokan, Pawliczek and Piszczur, 2013).
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For upcoming five years, the above analysis shows expectancy that grows earning at
average annual rate which is around 17.64%. In the present year, earning enhances around 7.92%
from comparing to last year. Expected earning growth increasing around 13.68%.
Define target market
Starbucks holds 33% of total market share for coffee product. This is because supply
coffee product is very fast that assists to make effective results to increase consumers at different
areas of cities and suburban areas as well (Simon, Fischbach and Schoder, 2014). Target market
of Starbucks determines in the following manner:
Adults: The chosen enterprise has primary market is people who have age of 25 to 40.
They demonstrate almost 49% of the total business (Ghazouani, Faris and Sayouti, 2014). This
consumer age group has contemporary design which consistent in advertisement and décor to
make effective product and services.
Young adults: Young adult age group determines around 40% of Starbucks sales. The
chosen organisation positioned itself through introducing advance technology through focusing
on social networking. It also makes effective brand image to target people (Ghazouani, Faris and
Sayouti, 2014).
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Illustration 2: Growth rate of Starbucks
Source: (Starbucks Corporation Analyst Forecasts Earnings
Growth, 2017)

Value proposition
Value proposition defines as the activity that assists to make innovation, services and
intended features to make attractive product and services in business unit. In the Starbucks, value
proposition creates through focused on brand strategy that comprised in different components.
This strategy reflected to incorporated effective elements within the business unit. First
component is coffee which offered by the selected business at high quality. It oversees custom
and roasting process that controlled distribution system of retail stores. Second component is
service which referred as intimacy of customers. It involves things that remembering through
someone name or product. Last component is atmosphere which is important element to provide
comfortable atmosphere. All these things combined to compelling value proposition (Ghazouani,
Faris and Sayouti, 2014).
MARKET PLANNING
Develop market planning
Market planning consists comprehensive document or blueprint that outlines
advertisement of business and marketing efforts for upcoming years. It includes set of activities
and marketing objectives within the set time frame (Kerr, Rouse and de Villiers, 2015).
Following elements included to make market plan of Starbucks:
Introduction: Starbucks demonstrates targeting high and coffee drinkers along with creamer. It
develops consistent present practices to accomplish aim in business unit. The chosen
organisation has aim to accomplish new segment of coffee drink persons. Report has aim to
develop marketing plan for the Starbucks in successful aspect. With the help of marketing plan,
essential information can be identified about the business unit. It provides financial information
about products which placed in the firm (Kerr, Rouse and de Villiers, 2015).
Situation analysis: Main targets of Starbucks is to emphasised on higher class customers with
providing premium quality coffee. These types of customers appreciated natural ingredients that
extracted from reliable source. It is truly dedicated to repaying it back in the business
environment. The company has market segment in term of students, mid age adults, etc.
(Ghazouani, Faris and Sayouti, 2014).
SWOT analysis:
Strengths Weaknesses
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 Starbucks is reputable organisation that
permits the brand recognition and
consumer retention.
 The selected enterprise has greatly
skilled professional people with
effective management team that
supports to ascertain good decisions.
 The firm also brings technology in
stores for attracting many customers in
business unit (Kerr, Rouse and de
Villiers, 2015).
 Very clean and good workplace of the
chosen business that create positive
impact on the people.
 Due to enhancing price, cost and
expensed of the production also
increasing continuously.
 Starbucks also carries various stores so
that it is located in close proximities
that affect to performances of stores.
 Overcrowding and cannibalism is also
creating threat to the chosen business
operations and functions.
 Starbucks has very expensive price to
their products and services which create
negative impact on the business
operations.
Opportunities Threats
 In order to expand operations in china,
the selected enterprise has the greatest
opportunity to carry several operations
together.
 The enterprise has also opportunity to
enhance propagation of western types
coffee shops.
 Along with this, Starbucks can also
expand their operations into European
and American market as well.
 With the help of distribution
arrangement the chosen business can
also expand their market in significant
manner (Ghazouani, Faris and Sayouti,
2014).
 Global market for the coffee product
make extra competitive segmentation
that face enhancement in competition.
 Political factors of Australia market
highly influence to Starbucks products
and services (Simon, Fischbach and
Schoder, 2014).
 High cost required to grow market in
different countries.
 Due to changes in customer trends,
Starbucks operations affected.
 In Australia, new competitors can
easily enter with innovation.
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Porter's five forces: Threat of new entrants: In the Starbucks industry, new entry moderate in nature because
barriers to established operations by several businesses. Initial investment for new
entrants is not very high therefore, it takes lease for stores that required medium
investment. Threat of substitute: In the Australia, threat of substitutes products is very strong because
there are different products exist in market. It includes tea, energy drinks, juices and
various form of drinks. Some customers can also prepare coffee at their home instead of
buying it from Starbucks. Bargaining power of buyers: Coffee industry has various buyers and no one individual
never demand for price concession. The organisation also offers several types products
with different customers to make comparative low amount of purchase. It reduces power
of buyers. Therefore, Starbucks has high threat of substitute products (Larmer,
Mergendoller and Boss, 2015). Bargaining power of suppliers: The chosen organisation has high quality of suppliers
that provide different coffee beans. In Australia, there are several specific regions in that
different suppliers exists. Therefore, it can be stated that Starbucks has less threat from
suppliers power (Botha, Kourie and Snyman, 2014).
 Competitive rivalry: In Australia there is monopolistic competition in coffee industry.
Therefore, Starbucks has the greatest market share to compete with other businesses.
Further, customers have also few costs of to switch towards other competitors so that it
enhance rivals. The enterprise also maintains its competitive advantages to make
differentiate products and services to compete with rival enterprises. Further, rivalry is
high because the chosen enterprise lack of capacity to lead with them (Kerr, Rouse and de
Villiers, 2015).
Marketing objectives: Marketing strategy based on the emphasizing on the customers who
willingly purchase products from Starbucks. Buying products by the chosen enterprise means
customers are loyal towards the business. Marketing also display convenience and qualitative
products through different media such as television, printing ads, social media, etc. (Ghazouani,
Faris and Sayouti, 2014).
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Pricing objectives: Starbucks has effective position in market with high quality product and
services. Customers have immensely value for products and they also willingly spend money for
it. The chosen enterprise differs from other competitors to make products on premium quality.
Market demographic: The chosen business focuses on their marketing on different target
customers. In this aspect, Starbucks have loyalties, effective age group, student group, target
shoppers, etc. These all elements assists to make effective segment to reach high base of
customers (Ghazouani, Faris and Sayouti, 2014).
Marketing mix: Marketing mix consists 4 elements such as product, price, place and promotion.
Desirable objectives through making a product is focuses on quality, natural ingredients with
simple design. All target customers benefits from available products with premium quality and
convenience as well. Further, competing pricing strategy also determines to provide products and
services. There are several areas where Starbucks sell their products and services such as online,
physical, etc. (Kerr, Rouse and de Villiers, 2015).
Implementation of strategy: In respect to diversify the business, implementation of strategies
need to be applied such as innovative pricing. It assists to expand business operations
successfully through target particular customer. Competition also upholds with comparable
products through including high value, ingredients, prestige level, etc. In this strategy, Starbucks
expand their market at international place through implementing location where place can be
identified for several customers (Simon, Fischbach and Schoder, 2014).
Marketing strategy: Starbucks has also path to work with internal marketing control that
restricting channels in different selective grocers. Target market of the chosen enterprise presents
opportunities to make growth and enhancement. In this way, the company also enhance brand
awareness with effective marketing to develop effective results. In addition to this, marketing
strategy also included for enhancing revenue and profits to maintain qualitative performances. In
this aspect, customers are willingly to pay price for each product of Starbucks. There are several
marketing strategies implemented by the firm such as marketing mix, SWOT, segmentation,
competitive strategy, globalization strategy, targeting, positioning, etc. (Skokan, Pawliczek and
Piszczur, 2013).
Marketing mix
Marketing mix consists with 4 p's such as product, price, place and promotion. It
explained in the following manner:
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 Product: With respect to make effective position in market, Starbucks provide premium
products to their customers with unforgettable experience. Their position ascertained in
market to make innovative and high quality products in business unit. In addition to this,
the selected enterprise also continuous increasing their food and coffee categories to
innovate several things at workplace. Apart from this, the chosen business also offers
products according to season (Kerr, Rouse and de Villiers, 2015).
 Price: Usually high price denotes effective quality and value of product. Therefore,
Starbucks demonstrates high value and quality in their product. This is because, it assists
to attract large customer base towards the enterprise. High value of the product in
consumer mind assists to develop buying quality beans, assurance of effective people and
creative environment, etc. In order to gain competitive advantages, the chosen business
charge competitive pricing on their products and services (Botha, Kourie and Snyman,
2014).
 Place: Starbucks selling their goods in more than 62 nations. Therefore, it will be helpful
to demonstrate functions and operations at different places such as office building, airport
terminals, campuses of university, suburban retail centres, down town retail centres, etc.
 Promotion: Starbucks is the only organisation who not invest lot money on their
advertisement. In order to promote products and services, the chosen enterprise provides
gift voucher to their customers. This assists to attract many customers towards the
business unit in successful aspect. In promotion, advertisement is the best element
through revenue increasing from 1.4% to 3% with using different methods such as radio,
TV, etc. (Ghazouani, Faris and Sayouti, 2014).
OPERATIONS PLAN
Operations
In order to make operational plan, following element included in Starbucks: Global strategy: In this strategy, business need to move from domestic to international
strategy to take great return from investment. In 1995, saturation of the company occur so
that Starbucks started to expand their operations in global market. The chosen enterprise
began through enter into joint venture with local businesses.
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 Comparative strategy: Competitive strategy focused by differentiation to serve buyers
better than rivals. Starbucks has several resources and capabilities to serve effective and
attractive manner. In respect to develop profits, the selected business make growth in
potential market. In addition to this, the organisation has unique capabilities to target
buyer segment (Kerr, Rouse and de Villiers, 2015). Quality strategy: Quality strategy simply means uses of mystery shoppers. Buyers of the
enterprise spend almost 18 weeks to visit growers and supplier of coffee. Starbucks also
getting first pick from the world's best coffee crops. Quality strategy means maintain
standards through welcoming people, involves all employees, continuous improvement,
just in time, etc. (Ghazouani, Faris and Sayouti, 2014). Process strategy: Process strategy combined with many output options such as repetitive
operations, just in time inventory, fixed and well known costs due to experience. Along
with this, there are several specialized equipments such as coffee machines, customized
blenders, etc. With the help of well trained staff, coffee can be sold in different areas. Layout strategy: In order to make layout strategy, Starbucks recreate their experience in
espresso bars. With the help of customers want to take services and place to sit with
having drink (Larmer, Mergendoller and Boss, 2015).
 Inventory management: Inventory management means all the goods that available to sell
in the warehouse. There are several techniques in front of Starbucks which they can use
to manage inventory such as just in time, MRP, etc.
Break even point
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From the above diagram. It can be seen that in previous month Starbucks has high
performances. On the other hand, profits in the present month continuously decline. Sekaran, U.
and Bougie, R., 2016
From the above break-even point, it has been analysis that Starbucks grows their profits
and revenue to develop market and operate in new areas. In this way, vision of the organisation
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Illustration 3: Starbucks performances
Source: (Starbucks Corp, 2017)
Illustration 4: Break even point
Source: (Starbucks Corp, 2017)

determines to sell product and services at high quality with eco-friendly material and resources.
Therefore, they decide to make strategic direction with rapid store expansion and develop large
range of beverages. This makes strong relationship with suppliers for future development (Botha,
Kourie and Snyman, 2014).
Key success factors
In order to make effective results, there are several key factors exists in Starbucks that
enhance profitability outcomes. They are as follows:
High quality: High quality of Starbucks products, is effective resources that enhance
profitability and productivity in market. In this way, various customers can be attracted to
develop results in business. With the help of high quality, the chosen organisation can make
standards in products and services so that it will be beneficial to attain overall profits and
revenue in business unit (Ghazouani, Faris and Sayouti, 2014).
Low cost: Further, the chosen organisation also provide products and services at low
cost. It will assist to make effective results within the business. Therefore, it can be stated that it
is another successful factor for growing operations. Low cost of the products and services assists
to attract many customers who unable to spend more amount. As results, it assists to increase
large base of customer that required to promote functions and operations in market.
Online selling: In addition to this, Starbucks has also opportunity to sell their products
and services online. Therefore, it assists to attain maximum profits and revenue through enhance
operations. With the help of online selling, the chosen business can perform their functions
through attract people who are most engaged. As results, it will assist to make profitable results
in order to cater operations (Ghazouani, Faris and Sayouti, 2014).
MANAGEMENT SUMMARY
With respect to make effective results, Starbucks positions itself as highly respected
brand. In this way, the company enhance their products and services through making unique
features and characteristics that gives advantages to operate functions and operations at global
place. Further, it can also be summarize that from last 40 years marketing strategies of the
chosen business successful operate to give effective results. Further, the company also fulfils
their needs and wants through continue leading force in market (Larmer, Mergendoller and Boss,
2015).
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FINANCIAL PLAN
In order to make financial planning the selected enterprise has made five year plans. In
this way, the company determines their market share to make high growth around 15 to 20%that
accelerate brand to accomplish and achieve goals which they set. Their analysis has been made
as long term EPS growth around 17 to 18%. Further, the enterprise has aim to boost their
revenue through 10% to make high sales growth in each year. Therefore, they decide to open
new 12,000 stores around the world by 2021. Along with this, the chosen organisation also plan
to operate their store in Shanghai in 2017 and Tokyo as well. After this, they have planned to
open new branch in New York and Chicago in 2018. In these store, the company need to
determine operations and organic food items and soups (Skokan, Pawliczek and Piszczur, 2013).
CONCLUSION
From the above report, it can be concluded that Starbucks is one of the largest coffee
industry which has mission to serve effective product with qualitative elements on time. In this
context, report summarized about history and concept idea at staring time of the organisation.
Furthermore, it concluded about PESTLE analysis that helps to expand business operations in
international market of Australia. With this regard, organisation demonstrates size of the industry
to make distinguish product and services from their rivals. Moreover, it includes market analysis
to assess size and growth of the company. In this way, it has been identified that the chosen
enterprise deals with the biggest area of market.
In addition to this, report focuses on demonstrate target market that create value
proposition to produce new products in market by Starbucks. Along with this, report articulated
about operational plan which includes operations, break even point and successful factors that
enhance profitability at workplace.
18

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