Starbucks Business Report

Starbucks Business
Report
Table of Contents

INTRODUCTION...........................................................................................................................1
Part 1 – Starbucks Business Report ................................................................................................1
Introduction.................................................................................................................................1
External Environment Analysis..................................................................................................2
The Internal Environment...........................................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy can be defined as a collection of different plans that are formulated in
order to achieve growth and development of an organization (Atzori, Shapoval and Murphy,
2018). Starbucks which is a coffee house chain that was founded in 1971. The company
missions to establish itself as the premier provider of the finest quality of coffee worldwide along
without compromising on the quality of its products. The company was named after the first
mate in the famous novel Moby Dick. McDonald's and Dunkin' Donuts are some of the
company's competitors that target Starbucks' customers by offering high quality coffee and
coffee drinks. This report primarily aims to present a business report on Starbucks and covers
recommendations and how can the company improve its overall efficiency and performance.
PART 1 – Starbucks Business Report
Introduction
Starbucks is American coffee house chain, founded in Seattle, Washington. The company
is the leading retailer and marketer for coffee and is recognized worldwide. In addition to
offering a wide variety of coffees and caffeinated drinks, the company also sells teas, pastries
and other items of food, coffee and tea related items etc. (Cachia, 2017) Starbucks also sells its
products through its website and via mail. It also sells its coffee to various restaurants and cafes,
airlines and hotels at wholesale prices. Various bottled Starbucks coffee drinks can be seen for
sale at various supermarkets and drug stores. From operating as a single store to operating
globally Starbucks has come a long way. Starbucks today has pioneered in becoming a leading
coffee producing brand globally. The company has exceptionally skilled staff that offers high
class and excellent service with a classic experience provided to the customers through
ambience, music playing at the background that is especially chosen to please the customers.
People can come to a Starbucks out can can catch up with their work or just meet and chat. The
company is also committed towards working for the environment in order to reduce harm that is
done to it. Starbucks lives by its values of creating a warm culture which gives the sense of
belongingness.
In the year 2012, coffee accounted for 37% of all the cups of coffee consumed in the
United States. Starbucks has been able to maintain a leading position in its home market by
dominating the local coffee competitors like Caribou coffee and Peet's coffee and tea in the
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country but in the recent years brands like McDonald's and Dunkin' Donuts have began
targetting Starbucks' customers by offering high quality coffee and coffee drinks. The
competitors were able to pose a big threat to the company as the number of existing coffee stores
is increasing day by day. Besides this, Starbucks face intense competition in mauny international
markets.
Founded in 1992, Caribou coffee has operations in more than 20 states and many markets
internationally (Campbell and Helleloid, 2016). The company sells only speciality coffee, coffee
brewing supplies and baked goods with outlets designed like mountain lodges. How ever, like
Starbucks Caribou coffee also sells roasted coffee to many grocery stores.
On the other hand, McDonald's came up with the concept of Mc Cafe – a coffee outlet
that would sell high end coffee similar to Starbucks. With a positive response from the
customers, McDonald's also introduced special coffee drinks that are now sold at various grocery
stores and supermarkets. Dunkin' Donuts is a globally known Donut shop that has operations in
approximately 30 countries. Though the company offers coffee, it did not start offering espresso
drinks until the year 2003. All these brands have proved out to create a highly competitive
environment for Starbucks.
External Environment Analysis
External environment analysis refers to an examination and evaluation of all the macro
factors like political, economic, social, technological, environment and legal factors that
influence the overall growth and performance of the organization (Chowdhury, 2016).
PESTLE Analysis of Starbucks
Despite being a global leader in coffee production business, Starbucks should constantly
evaluate its macro environment in order to remain updated regarding what influence can the
macro factors pose on the functioning of the company. Through this, the brand can continue to
grow and succeed in a highly competitive market. Starbucks has already made efforts to remain
competitive and to sustain in the market. The PESTLE analysis of Starbucks is described below -
 Political Factors – Starbucks mainly operates in producing high quality coffee. Hence,
the main raw material required by the company is coffee beans. Political factors like
interest rates, export policies of different countries have been posing issues to procure the
raw coffee beans. Also, due to an increase in the rates of same, Starbucks recently had to
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