Strategy

Starbucks Business Report

Table of Contents
PART 1............................................................................................................................................3
INTRODUCTION..................................................................................................................3
External Environment analysis...............................................................................................4
Industry analysis.....................................................................................................................4
Opportunity and threat analysis..............................................................................................5
Porters five force model.........................................................................................................6
PESTLE analysis....................................................................................................................7
Internal analysis......................................................................................................................7
SWOT analysis.......................................................................................................................9
Competitive analysis............................................................................................................10
Recommendations................................................................................................................10
PART 2..........................................................................................................................................11
Stakeholder report................................................................................................................11
REFERENCES..............................................................................................................................13

PART 1
INTRODUCTION
Starbucks
Starbucks is an American global chain of coffee shops and roastery reserve. The
company is having chain of their roastery reserve around the world. Starbucks was founded by
Jerry Baldwin, Zev Siegl, and Gordon Bowker in the Pike Place Market which is located at
Washington, United States in the year of 1971. Starbucks is having headquarter in Seattle,
Washington, United States. Being the largest coffee shop within the globe they uses automatic
espresso machine so as to prepare their delicious coffee which is the prominent feature of
Starbucks. The company operates their business in near about 77 countries with overall 30000
coffee shops as of study of year 2020. Major products which are served by Starbucks includes
hot and cold drinks, micro ground instant coffee which is renowned as VIA, espresso, caffe latte,
whole bean coffee, fresh juices, Frappuccino, La Boulange pastries, their seasonal speciality
which is pumpkin spice latte, full and loose leaf teas and at last snacks such as chips and cookies.
Vanilla latte is the best seller of Starbucks. Starbucks is the market leader because of their
innovations; pumpkin spice latte is the seasonal best seller of them. Starbucks is flexible about
meeting needs of their customers as in china it was tough for them to position their tea used
products so they introduced non-dairy products such as coconut milk, soy milk, almond milk so
as to attract more customers. One of the most advantageous and brand oriented strategy used by
Starbucks is that they do not franchise their store as they believe that franchise hampers
company’s value and culture which can diminish brand image of them (Gupta, Nagpal and
Malik, 2018). Starbucks is having so many market competitors, brief of them are as under:
Dunkin’Donuts: The Company was founded in the year of 1950 by William Rosenberg
in Quincy, Massachusetts. This company is giving intense competition to Starbucks, Dunkin’
started their business in selling of Donuts only but in the year 2000 they introduced their
business over selling coffee and named their first coffee store as Destination coffee shop. In
2006 Dunkin’ started cold war within Starbucks from their advertisement campaign named
America Runs on Donuts. This movement helped the company to enhance their sales as in 2018
their sales were $350 million but Starbucks earned $6.3 billion which proves high market
existence of Starbucks (Pramodhana and Sari, 2017).
McDonald’s: The Company is known for fast food seller specially the best seller and
renowned company for burgers. But at the same time in order to survive in the competitive
market McDonald’s entered in coffee space in the year 2009 by their new innovation named
McCafé, this gave tremendous profits to them. They were emphasised on selling premium
coffees to their customer rather than selling basic variants of coffee but at the same time prices
offered by McDonald’s were cheaper as compared to Starbucks. Due to high innovation and

product quality Starbucks remained to the market leader in coffee shops as analysed by report of
National Coffee Drinking Trends in the year 2016.
External Environment analysis
Starbucks essentially deal in coffee and snacks, in 2009 when high economy slump arisen
in global economy so taste and preference was changed due to decline in consumer income and
low economic growth (Clements, 2019). This affected Starbucks to the high extent as people
tend to move towards economic coffee and coffee shops rather than opting for luxury and
expensive one.
As from the above data it is clear that Starbucks is the prominent market share holder in
coffee industry. Starbucks in having 59.2% share of overall market whereas Dunkin’Donuts is
having 14.4% of overall industry. Further McDonald’s which is known as rival of Starbucks is
having only 0.6% of overall coffee market within world.
Industry analysis
In the case of Starbucks the company is at their maturity life stage which makes market
leader to Starbucks in coffee and beverage industry. The company is numerous principles which
are used by them, that are explained as under:
 They believe in high CSR activities which renders positive impacts to society and
environment as well (Kimball, 2016).