Starbucks Business Report

Starbucks Business Report

Table of Contents.
Table of Contents..................................................................................................................................2
INTRODUCTION................................................................................................................................3
RECOMENDATION......................................................................................................................12
REFERENCES...................................................................................................................................14

INTRODUCTION
The Starbucks is an international coffee house chain and it is founded in Washington, America. The
company has its speciality in coffee retailing and is being one of the leaders in this industry. The
company is having more than 20,000 outlets across the world, in which some are company owned
as well as some of them are operated under franchise system. The average revenue generation by
the company is more than $15,000 Billion. The company Starbucks is serving wide range of
products, ranging from various varieties of snacks, beverages, fresh juices, tea products, micro
grounded coffee, whole bean coffee, hot and cold drinks etc. There are some Starbucks evening
locations which sell bottled cold coffee drinks, ice creams, wines and beers too and also sometimes
serves as the grocery stores (Kay, 2019).
The company proved to be the leader of the industry by showing exceptionally high profitability in
the industry at a very fast pace. From the latest statistics it has been observed that the company has
proved to be over the other companies of the industry in revenue generations. However, in the year
2008-09 the company had to face some critical times so it could not be said that its functioning was
always smooth.
Therefore, in order to create value as well as to be the brand icon of the industry, the company is
regularly working on diversifying its product line & to grow in international locations. In the home
market i.e. in united states the company Starbucks is been leader since a long go as 50% of the
coffee purchased in cafes is been through this company which itself dominates the other local
competitors. Moreover, in the international markets the company is having entrenched competitions
which the company has to face.
In the coffee segment, the company's top competitors are Caribou coffee, McDonald's and Dunkin'
Donuts. These companies proved to be the biggest threat to the effective functioning of the
organisation Starbucks as these companies were successful in wooing the customer’s away from the
organisation Starbucks.
The company Caribou coffee is one of the competitor of the Starbucks, which is selling coffee
brewing supplies, baked goods, roasted coffee to grocery stores. The company is currently having
470 coffee houses operating in 20 states across the globe. The average sale of the company is
$326.5 million.
Another competitor to the organisation is McDonald's, which is one of the largest quick serving
restaurants. This company is operating in 119 countries with more than 36000 outlets across the
globe. This company has diversified its product line into McCafe under which it is serving coffee.
This is similar to the Starbucks in order to gain early success in the industry. The average sales of
the company are $27.4 billion dollars.
Dunkin Donuts is the another competitor to the Starbucks. Dunkin donut is popular for being the

leader as the doughnut chain by selling a large variety of doughnuts. This company has also started
selling coffee since last few years. Thus, the company's average revenue generation was $748.7
million from over its more than 10,000 outlets operating 30 countries (Mayer, 2018).
External environment analysis
PESTEL analysis of Starbucks
Political factors
In order to been agreed upon corporations globally in the developed and developing countries, the
company Starbucks has to follow several sourcing strategies for the sourcing of raw materials in
order to conform the practices of fair trade in the international market. As the main political
imperative of the company Starbucks is its concern towards raw material sourcing.
Moreover, the company has to follow all the rules and regulations from where it is doing raw
material sourcing and this are due to increase in political awareness as well as activism in the
countries which are under development.
Concerns of regulatory pressures is the another political imperative which the company Starbucks
has to face in its home market i.e. in United States. Some more political factors which affect the
Starbucks operations are the employment laws as well as the policies of tax.
Economical factors
The profitability of the company Starbucks is been affected due to the global economic recessions,
thus these are the foremost external economic drivers which affects the ongoing business of the
company Starbucks. It has been observed that even though the recession people are not cutting
down their coffee consumptions rather they are moving towards alternates who are lesser in price,
thus this creates several opportunities for the organisation Starbucks. Moreover, the company has to
face the inflationary macroeconomic environment i.e. the cost of labour as well as the rising cost of
operations in order to increase its profitability in its business. Additionally, some more factors of
external environmental which could affect the economy of Starbucks are the level of taxation in the
country, local currency exchange rates etc (Purkayastha and et.al, 2019).
Social factors
For including its customer base from the people of lower and middle tier income pyramids the
company is working on its expansion in consumer base by providing the coffee at the somewhat
cheaper price without sacrificing in quality which could be company’s main social cultural
challenge. Moreover, the company needs to be cognizant for the trends of green and ethical chic
consumers. The company has to been concern for strategies for next generation customers as well as
millennia’s for smooth running of its operations. Level of education, changes in lifestyle, change in
work patterns and consumer preferences are the various socio cultural factors which affects the
functioning of Starbucks.