Agile Business Strategies and Starbucks' External Pressure Handling

This essay explores the concept of agile business and its importance in today's dynamic marketplace, highlighting how organizations can adapt to change and seize opportunities. It then examines Starbucks as a case study, analyzing its operational strategies, including inventory management, quality control, and location decisions, which contribute to its success as a leading coffee chain. Furthermore, the essay discusses how Starbucks manages external pressures using PESTEL analysis, addressing factors such as economic challenges, technological advancements, environmental concerns, and legal considerations. The analysis demonstrates how Starbucks navigates these external forces to maintain its market position and customer loyalty, emphasizing the significance of proactive adaptation and strategic decision-making in a competitive business environment. Desklib provides access to similar solved assignments and resources for students.

Part A:
Nowadays, agile business is one of the most famous types of business, because ingenuity and
agility are the most basic things that every organization needs. So what is agile business ?
Agility is a company's ability to quickly adapt to changes in the marketplace. This capability
can allow a company to take advantage of opportunities presented by a constantly changing
environment. To remain effective, organizations have to improve and adapt to the changes
brought about by the fast-paced world of commerce.
Organizational agility is critical for seizing opportunities and rising to the top of competitive
challenges. To succeed in an ever-changing business climate, companies must improve and
adapt quickly. Organizations developed a dexterous approach in order to remain effective.
This strategy should focus on empowering workers, understanding disruption, and
experimenting with how work is completed. Dexterous organizations' ultimate goal is to do
everything they can to help supervisors and employees put forth their best efforts. They use
dexterous techniques to bolster, move forward, and drive overall trade performance, one
representation and one extension at a time. Agile businesses are more capable because they
have developed the ability to detect trade opportunities and risks early and to implement
change quickly. Victory via organizational agility is based less on what has been wiped out in
the past and more on what should happen tomorrow.
The agile firm also makes sure that their employees are up to date on the latest technology,
information, and training on a regular basis. Agility will be the biggest advantage of the
organization in knowing the requirements of the target customers and providing them with
the best product. Organizations will face many risks, become obsolete and unable to respond
to the situation without agility and initiative. In the long run, they will lag behind their
competitors and be left out of the market
306 words
Part B:
1, Starbucks was established by Jerry Baldwin, Gordon Bowker, and Zev Siegl in 1971. After
50 years, Starbucks nowadays has become the largest American coffee company and
coffeehouse chain in the world with more than 32,000 stores located in 80 different countries.
They aim to serve their customers a wide range of premium products including hot and cold
drinks, lattes, whole coffee beans and even snacks such as cakes, yogurts,etc to meet the
customer’s expectation and demand. In addition, employees in Starbucks were trained to
provide excellent customer service to help the customers have a strong impression and feel
wanted to come back again when they receive a complete experience. For that reason,
Starbucks is now the world’s leading coffee chain. So why are they so successful? What are
their key ingredients and strategies in operating firms and producing such high-quality
goods? The reason for their success is that Starbucks is excellent in increasing its productivity
by improving the skills of employees and always introducing new technologies to help
employees work under the best conditions. It results that worker’s motivation have increased,
helping them work more efficiently to raise the profit for the company. In addition, Starbucks
also follows their own Coffee and Farming Equity(CAFE) program to allow the farmers to
produce the best quality of coffee beans. Next, we talk about inventory management which is
one of the most important operations
in any business. The reason is that inventories affect both the product process and response
of customers' demand. It can also benefit the business through economies of scale when large
firms buy a great amount of resources. To manage inventories well, Starbucks needs to have
a large amount of capital knowledge and skills to hold inventories. It also adds to the cost of

the firm from warehousing, handling, insurance costs,etc. On the other hand, they need to
consider how to manage and use it on time to avoid increasing risks of obsolescence. In
reality, using lean production methods are also one the ways to help the firms making
abnormal profit in a short-time. They minimize the waste of products during the process
resulting in reducing the costs of the firms and increasing competitiveness. In the meantime,
their goods will be produced more efficiently so they can issue the products into the market
faster than their competitors. Next thing is about the quality of production. They always care
and focus about the quality because it can develop a strong brand image, keep the customers
in touch to gain loyalty. It also helps businesses achieve the charge of premium price,
customers prepared to pay higher in expecting more quality of goods. Final main key point is
all about their location decision, they need to consider the cost of the site, transport cost in
order to minimize the cost and find the suitable place. They often locate stores in places that
have high market potential which is usually high-density housing or in a cousine place to
advertise their brand and raise profit.
508 words
2, Regarding the most successful coffee chain house business as Starbucks, we can see clearly
that Starbucks is an expert in managing and controlling their firms out of external pressures.
Controlling the external factors or uncontrollable factors is one of the most difficult parts in
business because they can easily influence the organization’ performance while we can not
predict it. Those factors are opposite to the internal factors such as staff, finances, capitals,
shareholders,etc which the company can handle easily by good manager skills and an
effective leadership, but external ones require firms more than that. Because of the
unpredictable and uncontrollable characteristics, successful businesses like Starbucks must
have to use the effective way to deal with those problems is PESTEL analysis which is one of
the most popular methods to perform an environmental scan. “So what is PESTEL?” It is a
model that represents the external factor evaluation matrix that focuses on six main factors:
Political, Economic, Technology, Environment and Legal. Starbucks has applied it
successfully on their coffee chain in recent years when all the businesses in the world have to
face and undergo a lot of problems such as economic growth, total revenues, lack of customer
base by Covid-19 pandemic. Firstly, Starbucks has faced a lot of economic problems since
the Covid-19 pandemic started. The recession of the economy all around the world affected
Starbucks strongly. It made total revenues of the firm decrease fast because they lost a large
amount of customer base when people could not spend time in Starbucks for work or chilling
like before. To deal with it, the company has another solution: reducing the price of products
in order to convince customers, but it will also reduce the quality of goods too. It became a
barrier to Starbucks in expansion and kept the firm still dominant in their market with
competitors who provide lower prices. This leads the business to separate the customer into
different categories and depend on it to set the suitable price. Secondly, Starbucks has tried to
make a technology evolution which transfers almost all the activities on the internet. It means
that customers who can not come to the store now can buy products on their website to make
it convenient and easy to buy. They also operate a lot of promotion activities which focus on
new products such as bottles, cups and drinks depending on each event. Environment is also
one of the difficult parts for a secondary and tertiary business like Starbucks. The reason for
that is because the manufacturing of coffee beans is bringing a tremendous negative impact to
the environment. It is important because they need to deal with it fastly to keep the loyalty
and trust of the customer to buy their product. If not, people will criticize the firm for not
following the legal rules for manufacture. Seeing that as a threat, Starbucks has to worry and

be careful about environmental factors such as the rules of extracting coffee beans, minimum
pollution when manufacturing products and the increasing heat of earth. That is how Starbuck
facing with external pressures and problems.
519 words
Words count: 1336
References:
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