Starbucks: External Environment Analysis and Internal Factors

Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Main Body ......................................................................................................................................1
Introduction to Starbucks and it's Competitors......................................................................1
Explain the external environment (5 Force Analysis, PESTEL, Industry Life Cycle Model)1
Discuss internal environment (Value Chain Model, VRIO model, Capabilities and
Competencies)........................................................................................................................7
Recommendations for next 3 years........................................................................................7
PART 2............................................................................................................................................7
Stakeholder report .................................................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
From the case study of Starbucks it has been concluded that in order to remain in the
competitive world it is essential to compete with rivalry. Firm need to frame strong tactics to
over the challenges created by competitors (Atzori and Murphy, 2018). Costa Coffee, Caribou
Coffee, Cafe Coffee day etc. are some of competitors of Starbucks. This report is based on
Starbucks. This assignment covers internal and external environment factors which are
influencing their business activities. Along with it meaningful recommendation is suggested to
the CEO of Starbucks so that performance can be raised over three years.
PART 1
Main Body
Introduction to Starbucks and it's Competitors
The annual revenue of Starbucks is $16 million and around 2,00,00 skilled workers are
working day and night to meet the set goals and objectives. Business is expanded in over 60
countries are able to meet the emerging taste of the customers successfully. From the case study
it has been found that around 21,000 Starbucks branded cafes are there in the where potential
customers can visit and can enjoy the taste of the coffee. But in the year 2008 and 2009 around
900 stores are closed down because of the rapid decline in the consumption of the coffee. Due to
which profit margin reduced to a large extent in the global market. Management of the
organisation decided to regain their position in the market by diversifying their products in the
global market. Starbucks entered into other segments where new innovative products will be
able to create value in the global market. By this organization will be able to capture huge market
ratio (Cachia, 2017).
Starbucks is serving it's services across the globe and large customer base has been build
over the years. Due to which organization is surrounded by many competitors prevailing in the
competitive world. Some of the rivalry who are creating tough challenges for Starbucks are,
Dunkin' Donuts, McDonald's, Costa Coffee, Caribou Coffee, Cafe Coffee day and many more.
51.22 is the outstanding sales of Dukin and has 11,000 stores across the globe. Whereas,
McDonald's has 36000 stores and 420, 000 employees are working day and night to meet the
desire standards. It has been examined from the case study that as compare to Starbucks Costa
Coffee is more demanded in UK.
1