Starbucks Business Report - Analysis, Recommendations, and Competitive Landscape

Starbucks Business Report

TABLE OF CONTENTS
PART 1............................................................................................................................................3
1.1 INTRODUCTION.....................................................................................................................3
1.2 EXTERNAL ANALYSIS..........................................................................................................4
1.2.1 PESTEL Analysis...............................................................................................................4
1.2.2 5 Forces Analysis................................................................................................................6
1.2.3 Industry Life Cycle Model..................................................................................................7
1.3 INTERNAL ANALYSIS...........................................................................................................8
1.3.1 Apply VRIO........................................................................................................................8
1.3.2 Value Chain......................................................................................................................10
1.3.3 Resources..........................................................................................................................11
1.3.4 Capabilities and Competencies.........................................................................................12
1.4 RECOMMENDATIONS.........................................................................................................13
PART 2..........................................................................................................................................14
2.1 Stakeholder Report...................................................................................................................14
2.1.1 Starbucks Stakeholders.....................................................................................................14
2.1.2 Appropriate Communication Strategy..............................................................................15
REFERENCES..............................................................................................................................17

PART 1
1.1 INTRODUCTION
Starbucks Corporation is worldwide famous for its Coffee. Starbucks is a coffee company
of United States, it was established in 1971 at Seattle, Washington. It becomes a wide chain in
the coffee industry operating at approximately 30,000 places. It was founded by Jerry Baldwin,
Zev siegl, Gordon Bowker. Chairperson Myron E. Ullman, and Kevin Johnson is the President
CEO of Starbucks till now. Company mainly represents the 'second wave coffee' it is movement
which is done the artisanal coffee (roasted coffee). Third wave coffee is launched due to the
concern of the consumers and manufacturers for the quality coffee, for light roasting the coffee
as previously they were using dark roasted coffee. Now Automated espresso machines are used
by the Starbucks for preparation of coffee which maintains the quality and safety. Starbucks
sales the Caffee latte, espresso, Fresh Juices, Frappuccino beverages, hot and cold coffee, snacks
like chips, crackers, biscuits, more over food products like sandwiches, drink-ware like mugs,
also they select the beer, appetizers, wines in evening such products provided by that company
according to the season or timing (Glowik, 2017). As they provide the branded coffee, bottled
coffee, ices creams at grocery stores with packaging for their brand. Revenue generated by the
company is US$24.71 billion, operating income US$3.88 billions and net income is US$4.51
billion in 2018 (Voigt, Buliga and Michl, 2017). Starbucks subsidiaries are Ethos Water,
Evolution Fresh, Hear Music, La Boulange Bakery, Seattle's Best coffee, Teavana, Torrefazione
Italia. All these possess high demand in market. It has employed 291,000 people.
As Starbucks is the leading name in the coffee industry, it has strong competition s which
are in race to take competitive advantage. Dunkin Donuts, Tim Hortons, Costa Coffee, Mc
Donalds etc. these competitors share has high value in market. As talking about the Dunkin
Donuts it has 10,000 outlets in the world which generates US$ 132 billion 2018. As it is
expanding their business in more countries and proved the highest competitor for the Starbucks.
Tim Hortons has opened 4300 outlets in Canadian quick service restaurants which generates
US$3.29 billion in 2018 (Zhang, Chien and Ma, 2015). Mc Donalds is the strongest competitor
of the Starbucks, it has 38000outlets worldwide, which serves 68 million customers all around. It
generates US$28.11 billion in 2018. Costa Coffee operates 1700 stores at different locations and
it generates revenue approximately US$1.29billion which is less than Starbucks. It is trying to
take growth and expansion.

Starbucks is getting popular among the people in different locations of the world as it
gains the attention of the consumers by their promotional strategies. It develops their customers
reach, and they widely use the technology innovation for their increment in revenue. As they try
to take lead among their competitors to take the competitive advantages. It practices innovation
in their products to satisfy the customer's demand. As they take the necessary changes in their
product and according to the season and timing they provide the products. Also, they take the
review and feedbacks from their consumers to build their prestige in the market and treat them
with high priority (Chowdhury, 2016). Starbucks always take initiative to make their base perfect
in terms of the market research they analyse all the external and internal factors which may affect
their business. It growth and expansion is based on their marketing strategies, so they adopt
change it accords to the time and demands of the consumes.
1.2 EXTERNAL ANALYSIS
Starbucks is the leading brand in this industry which leading since there establishment.
Company has the ability to analyses the factors which can affect there business, so they assess
them with priority and take advantage of those factors.
1.2.1 PESTEL Analysis
PESTEL analysis helps to know the factors which influence the business of Starbucks
and how it assesses them to make it their strength.
Political Factors
Illustration 1: Market share of Competitors of Starbucks