Starbucks Business Report: External and Internal Analysis

Starbucks Business
Report

Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1 – Starbucks Business Report.................................................................................................3
Introduction.................................................................................................................................3
External analysis:........................................................................................................................4
Part 2 – Starbucks’ Stakeholder Report.........................................................................................13
a) Internal as well as external Stakeholders of company.........................................................13
b) Manpower precedence stakeholders group...........................................................................14
c) Interest and power of subordinates stakeholder group.........................................................14

CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy refers to the combination of all the decisions as well as performance of
activities in order to accomplish organizational goals and objectives in an effective manner.
Before, creating any kind if business strategy it is required by the management team to identify
the market trends and situations. This can be done by the higher authorities by adopting internal
as well as external market analysis. In this report, Starbucks is the organization which is the base
company on which the whole report is conducted. It is a business entity mainly deals in different
sort of coffee along with some food items which is offered by them to their consumers (Jo and
Kim, 2017). Main reason behind developing this report is to identify the environment and its
influence on the business functions. This report includes two parts, in which first part is going to
provide complete knowledge about the competition available at the marketplace. By using
various types of approaches like PESTLE, VRIO Industry life cycle model, value chain analysis,
competency framework as well as Porter’s five force model both internal and external
environment can be analysed by the management team in an effective manner. Furthermore,
recommendations are given to the higher authorities which enhance the performance and
profitability.
Part 1 – Starbucks Business Report
Introduction
Starbucks is a coffee brand, usually serve coffee across the whole wide world. The
organizational operational functionality is executed in a well defined way which as a return
produces high quality goods and services to their customers appropriately. Starbucks was
founded in the year 1971 and the main branch of the company is located in Washington, US. It
has been analysed that the global image of the company is so strong which makes it one of the
biggest and fastest coffee leader within the sector. Higher authority of the company works in
such manner that they will be able to enhance their brand name at the competitive marketplace
with the aid of using various types of marketing tactics (Kang and Namkung, 2018). According
to the annual report of Starbucks, it has been identified that the overall revenue of the company is
around 17 billion dollars in the year 2015.

It has also been identified that while operating business functions at the marketplace,
company faces tough competition with the existing organizations which affect the overall
performance in a negative manner. With the help of examining the given case study, it has been
identified that Starbucks have high level of competition at the marketplace where rivalry
companies are Costa Coffee, Caribou Café, Dunking Donuts, McDonald’s & so on. Theses are
the business organizations which negatively influence the profit margin as well as sales of the
company and reduce customer base. Apart from this, it has been said that Starbucks have the
capabilities to beat the competition and enhance the overall profitability and revenue of the
company. Furthermore, return in equity of business entity is almost 48.01% which is quite high
as compared to the rival organizations McDonald’s who have ROE is around 33%.
According to the given case study, it has been identified that Coffee Industry is one of the
most competitive as well as intense industry. Furthermore, at the present high competition
marketplace, it has been identified that Starbucks maintain strong position at the competitive
marketplace with the help of offering high quality products and services. Along with this, with
the help of strong brand image of the company, management team will be able to attract large
number of customers towards the business organization (Shiau, 2016). For attaining success and
growth at the competitive marketplace, managers need to conduct effective market analysis so
that they can modify their strategies and policies according to the changing environment.
External analysis:
It refers to an analysis conducted by an organisation in order to examine the environment
which influences the overall performance of the business entity. This will help them in order to
improve the functioning as well as performance of the company by modifying strategies and
policies as per the requirements of market. For doing external analysis, Starbucks adopt three
main frameworks which are PESTLE analysis, Porter Five Forces and Industry Life cycle. All
these models are going to be discussed in detail manner as follows:
PESTLE Analysis
It refers to a tool mainly adopted by the management team of the company in order to
examine the external factors which influences the performance of business organisation in both
positive as well as negative manner. It includes element which are legal, technological, political,

economical, social, & environmental. In the present context of Starbucks, all these elements are
going to be discussed as follows which have both positive and negative influence on the
performance of organization.
Political: It has been analysed that strict policies as well as interest rates highly influence
the profitability and productivity of Starbucks in a negative manner. Starbucks, produces and
uses high quality imported beans in order to produce Coffee which is the USP of company and
aid them in delivering high quality goods and services. This, as a result help in beating the level
of competition at the competitive marketplace and maintain sustainability at the marketplace
(Mota and et. al, 2020).
Economic: Due to recession in US, business operations of Starbucks affect in a negative
manner which reduces the performance of the company. As a result, business organisation will
not be able expand their functions at new marketplace. Therefore, economic factor is considered
as an uncontrollable factor which highly influence the overall performance of the company in a
negative manner.
Social factors: Individual living within US have high standard which impact the overall
sales of Starbucks in a negative manner. It has also been analysed that people are highly attracted
towards high quality coffee which raises the profit margin of the company in a positive manner.
As people in today’s world are more health conscious, company decides to launch herbal coffee
which grab the attention of customers. With the help of this segment, business organization can
expand their functions in an appropriate manner.
Technological: With the help of technological development, management team of
Starbucks can operate its business functions across the world. It has been identified that digital
technology help in creating awareness and attracting customers towards the company which as a
result leads towards the enhancement of profitability. Furthermore, if talking about technology
management team of Starbucks provide free Wi-Fi to their customers which assist them in
accessing internet easily while enjoying their coffee (Cardoni, Kiseleva and Lombardi, 2020).
Legal : A legal team is going to be hired by the top management authorities of Starbucks
so that all the activities related with legal policies and procedures can be handled by them. This
will help Starbucks in order to conduct their functions in an ethical and legal manner which