Strategic Report: Starbucks vs Costa Coffee

Strategic report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
External business environment........................................................................................................1
PEST analysis..............................................................................................................................1
Porters five forces model............................................................................................................2
Internal business environment.........................................................................................................4
SWOT analysis ...........................................................................................................................4
VRIO analysis.............................................................................................................................6
Examine triple bottom line..........................................................................................................8
Difference among the Starbucks and coasts coffee company: .................................................10
CONCLUSION .............................................................................................................................11
REFERENCES.............................................................................................................................12

INTRODUCTION
Strategic management is refers to the ongoing process of planning, monitoring, analysis and
assessment of the essential aspects or necessities that a company need to accomplish its goals
and objectives. This is described as the formulation and implementation of the major goals and
take initiatives to achieve them effectively that provides the positive outcomes to the
organisation. Business operates in the dynamic and complex, whenever there is any change in the
business environment, a company need to assess their strategies for the sustainability and
success(Makadok, Burton, and Barney, 2018). In addition to this, the success of the company is
also depends on the internal environment along with the external. As they have influenced the
performance of the organisation in many terms. Strategic management is divides in to various
approaches, A perspective approach of strategic management outlines that how strategies should
be developed. While descriptive approach focuses on the how strategies should be put into the
action or practices.
This report is based on the two companies that is Starbucks and costa coffee. In which
Starbucks is an American based multinational chain of coffee-house and roaster reserves with the
the headquartered in Seattle, Washington. While on the other hand, costa coffee is multinational
British coffee house chain with the headquartered in Dunstable England. This report is consist of
the PEST analysis, porters five model analysis along with the comparison on the basis of SWOT
and VRIO framework analysis. Further more it includes, social responsibilities and strategic
development goals of the both company(Ansoff, and. et. Al 2018).
MAIN BODY
External business environment
PEST analysis
PEST analysis is refers to the framework which is used as a tool to analyse the external or macro
environment in which company operated. This has asses the various major factor that has
influence the operations of the company in order to become the more competitive at the market
place. Factors in the pest analysis has discussed below in context to Starbucks and costa coffee:
Political factor: This facto is described as the rules and decisions made b the government, this
includes political stability or instability in the overseas market, foreign trade policy, tax policy,
labour law etc. UK has the great political which is a great strength of the country and will also be
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advantage for the Starbucks and costa coffee, along with this Brexit has created the uncertainties
and political debates, this has will be threat for the Starbucks and costa coffee, as this has
increased the trades rates and has created the trading problems.
Economical factor: this is refers to the product, services and money. This has the significant
impact on how an organisation does a business and also how profitable it is. It will includes
economic growth, interest rates, exchange rates, inflation, consumers confidence and disposable
income of the customers and business(Moutinho, and Vargas-Sanchez, eds., 2018). UK has the
great political stability along with this, it has been the popular destination of the foreign direct
investment. Many business tycoons and organisation around word has invested in the variety of
the industry in the UK. This factor serve as the advantage to the Starbucks and costa coffee, in
addition to this, there is fluctuation in the borrowing and lending interest rates that could hamper
the operation of the both companies.
Social factor: This has includes friends, family, collogues and social circle that has influenced
the individual attitude, opinion and living style. Which has the impact on the sales and revenue
of the company. UK has the big consumer market, in which there is a lot of opportunities for the
company to carter for the needs of the different races and religions that help the both the
companies to increase it sales. Along with this people are become more aware and conscious
about health, they look forward for the healthy drinks and foods, that mat have the negative
impact on the sales of the company.
Technological factor: This is refers to the all externally generated changes in the technology and
process that a company use in its operations. The UK is one of the most advanced company in
the world, where London if the hub of both financial and technological institutions, this will
serve as the advantage to the both Starbucks and costa coffee. They implement the advanced
technology in their processes in order to attract the consumers and to provide the high quality of
services (Dzwigol, 2020). But along with this, it changes rapidly by which technology becomes
obsolete fast and needs an huge investment and cost in the implementation of the new
technology at the certain period of period that will increase the cost of the both companies.
Porters five forces model
Porters five force model is an framework that is used as the tool to analyse the competition of
the business in the particular industry. It has been draws from the industrial organisation
economics which will used to drive the five forces that determine the company's competitive
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