Starbucks Business Report

Starbucks Business Report

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1 - Starbucks Business Report .............................................................................................3
An Introduction...........................................................................................................................3
External Environment analysis...................................................................................................4
PESTLE Analysis...................................................................................................................4
Porter's Five Force Analysis...................................................................................................6
Industry Life cycle model.......................................................................................................6
Internal Environment analysis.....................................................................................................7
VRIO Analysis.......................................................................................................................7
Value Chain Analysis.............................................................................................................9
Recommendations.....................................................................................................................11
PART 2 - Starbucks’ Stakeholder Report......................................................................................12
a) Internal and external Stakeholders for Starbucks.................................................................12
b) Priority Starbucks’ Stakeholder Group.................................................................................13
c) Critically analysis of power and interest of chosen stakeholder group and appropriate
communications strategy that Starbucks should adopt.............................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business report refers as the type of document that contains information about a specific
issue or circumstance that helps management in decision making process. It might presents the
actual solution to resolve a problem or it might record the information of past which is utilised
toward future planning of business (Abdel-Basset, Mohamed and Smarandache, 2018). This
report is based on Starbucks Corporation which is one of the leading coffee house chain that
offers smoothies, baked goods, coffee beverages, tea and sandwiches to customers. It was
established in 1971 and its headquarters is situated in Washington, United States. This report
includes 2 parts that are, Starbuck's business report and stakeholders report. The first part
contains introduction about organisation and its competitive position along with internal and
external environmental analysis and recommendations to improve performance of company over
next 3 years. The second part of project covers list of internal and external stakeholders for
Starbucks, selection of priority stakeholder group and its interest and influence are analyse by
using Mendelow’s matrix. At last, appropriate communication strategy is recommend for
company and conclusion based on entire report is provided.
PART 1 - Starbucks Business Report
An Introduction
Starbucks is one of the well known American coffee firm that provides variety of
beverages to its customers. The company was founded around 48 years ago in year 1971 and is
headquartered in Washington, U.S. It serves cold and hot drinks, caffe latte, loose leaf teas,
espresso, micro ground instant coffee, whole bean coffee etc. The firm has its stores at around
28,200 locations. Because of its effective marketing campaigns, Starbucks is considered as
market leader (Arrigo, 2018). The company was founded by Jerry Baldwin, Gordon Bowher and
Zev Siegl and earned revenues of 16 billion dollars in year 2015. The Specialty Coffee Café
sector is one of the most competitive industry and Starbucks faces high competition in market.
Its major rivals includes Dunkin Donuts, Caribou Coffee, McDonalds, Cafe Coffee Day, Barista
Coffee etc.
As per the given case study, Starbucks has high return on equity in comparison of its
rivals. ROE of company is 47.08% which is more in comparison to its rival company such as the
ROE of Dunkin Donuts is 45.49% and McDonald's is 32.97%. The company seeks to create

close connection with its customers and workforce are encouraged to assist them in taking
decisions regarding espresso machines, beans, grind and instruct on home brewing. The firm is
facing high competition from McDonald as it also offers quality coffee beverages (McCafe) to
customers similar to Starbucks. According to case study, Starbucks employed 191000 in 2015
while in McDonald, there were 420000 employees which is more than double from Starbucks.
Earning a reliable amount of profits is very necessary for Starbucks in order to grow and sustain
for long term in highly competitive Specialty Coffee Café sector. The net profit margin of firm is
14.57% , Dunkin Donuts is 23.55% and Mc Donald is 17.34%. These figures clearly depicts that
an intense competition is facing by Starbucks in the coffee industry. In order to sustain in market
for long term, aggressive marketing strategies are follow by company (Epstein, 2018).
After assessing the case study and the data provided in it regarding Starbucks and its
rivals, it can be said that the company is leading the coffee market. It enjoys monopoly in market
of being the only chain of coffee which operates all around the world with around 28,200
locations. The strategies of company are emphasizing on needs and preferences of customers,
physical store locations and menu options expansion.
External Environment analysis
External environment involves all the outside forces that influence the activities and
operations of business. The extrinsic environment of coffee industry as well as Starbucks is
assessed in order to determine the impact of forces on operations of company (Erhardt, Martin-
Rios and Chan, 2019).
PESTLE Analysis
PESTLE Analysis is a tool that helps in analysing the factors that influence the
performance of organisation. This framework includes six factors which are mentioned below:
Political factor: Starbucks is operating in coffee cafe industry and its main operations
includes production of coffee. For this, coffee beans are required by company as the main raw
material. In procuring coffee beans, company is facing issues because of export policies and
interest rates. For getting high quality coffee beans, company has to pay high prices which leads
to decline in its profit margins and impacts its productivity (Fozer and et. al., 2017).
Economic factor: The economic condition of country, inflation rate, recession etc. are
the factors that impacts operations of company operating in coffee cafe industry. The economic