Starbucks Business Report

Starbucks Business Report

Table of Contents
Part 1 – Starbucks Business Report ................................................................................................3
Introduction............................................................................................................................3
The External Environment.....................................................................................................4
The Internal Environment.......................................................................................................7
Recommendations................................................................................................................12
Part 2 – Starbucks’ Stakeholder Report.........................................................................................13
a) Internal and external Stakeholders of Starbucks..............................................................13
b) Employees priority stakeholder’s group..........................................................................13
c) Interest and power of Employees stakeholder group.......................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

Part 1 – Starbucks Business Report
Introduction
Starbucks is an American coffee company which has a huge chain of coffee serving stores
around the world. This is a global brand which was established in the year in 1971 in
Washington, United States. This coffee chain organisation is considered as the leader of its
market due to its effective marketing campaigns. In the year of 2015, Starbucks was transacted
with annual revenue of 16 billion dollars. It was a historic event to notice when Starbucks was
launched by its three founders namely Jerry Baldwin, Zev Siegl and Gordon Bowher.
Even after being a market leader, Starbucks faces intense competition as this company
operates in Speciality Coffee Café industry which is considered as one of the most competitive
industry. Main competitors of Starbucks include McDonalds, Dunkin Donuts and Caribou
Coffee etc. According to the case study of Starbucks, 2015, this company has highest return on
equity when compared to its competitors. Shares and other securities of Starbucks are listed at
NASDAQ and the stocks of this company are considered as one of the return generating stocks.
To be more precise, return on equity of Starbucks is 47.08% which is higher than its competitors
as McDonalds as ROE of 32.97% and 45.49%.
Other than elements of return on assets and equity, Starbucks is facing intense competition
with its competitors specially with McDonalds. According to the case study of Starbucks, 2015
total employees of Starbucks are 191000 whereas total staff of McDonalds includes 420000
employees which is even more than the double of Starbucks. Net profit margin of Starbucks is
accounted as 14.57% but on the other hand net profit margin of McDonalds is 17.34% and of
Dunkin Donuts is 23.55%. By these statistics and figures, it has been clear that Starbucks has to
face intense competition in the industry. It also implies that the reason behind aggressive market
strategies of Starbucks is its intention to sustain and survive in market.
After analysing the position of Starbucks and its competitors, it is evident that Starbucks is
the market leader specially when it comes to coffee store market. In order to create these
strategies, it is important for any organisation to first identify the challenges and opportunities
present in the market (Olson and et. al, 2018). In context of Starbucks, both these environments
are evaluated in this business report. The main aim of this report is to develop business strategy
document for Starbucks in order to analyse their external and internal environment. Starbucks is
a global coffee chain which aims to facilitate people by their products. The present report is

divided into two parts. The first section of this report, will include detailed introduction about the
company along with its competitive position. Internal and external environment of this company
will also be evaluated with the aim to provide relevant recommendations so that performance
over next 3 years of the selected company can be improved.
The External Environment
External environment is the combination of all micro and macro elements involved in
business environment which can include operations of the organisation. To deal with suchy kind
of components firms opt for formulation of strategies. Business strategy is the combination of
various plans which are developed with aim of attaining growth and development for the
business. In order to analyse the future 3 years of Starbucks, affairs of this company and the
industry in which it operates is assessed.
PESTLE ANALYSIS
It is framework which analysis fix factors and evaluates how these factors impacts the
operations and other affairs of an organisation.
Political factors – Main operations of Starbucks are related to producing coffee. The
core raw material required by Starbucks is coffee beans. Due to political factors of interest rates
and policies on export, Starbucks is recently facing issues in procuring quality coffee beans
(González-Rodríguez and et. al, 2018). Due to high prices of coffee beans, Starbucks has to
sacrifice their profit margin due to which productivity of the company is impacted.
Economic factors – These factors are related with the economic conditions of the nations
in which Starbucks operate. Inflation, recession and economic policies are few economic factors
from which Starbucks is impacted. Being a global leader of Specialty Coffee Café industry,
operations of this company are negatively influenced by economic recession which global
economy is facing. Starbucks has to bear high taxation as the Specialty Coffee Café services are
considered as a luxury along with which being a global company, the operations are also
impacted due to currency exchange rates (González-Rodríguez and et. al, 2018).
Social factors – Social factors includes preferences, choices and standard of living.
Social factors involved in Specialty Coffee Café industry impacts Starbucks both positively and
negatively. Standard of living is continuously rising in current society due to which people prefer
to spend their income of expensive coffee. But on the other hand, due to raising health
consciousness, people prefer to consumer organic tea and coffee which has negatively impacted