BTEC Business Strategy: Strategic Analysis of Starbucks Corporation

This report presents a comprehensive strategic analysis of Starbucks Corporation. It begins with an introduction to Starbucks and its global presence. The analysis then delves into stakeholder management and corporate social responsibility initiatives. A PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors impacting Starbucks. The Structure-Conduct-Performance model and Ansoff Growth Vector Matrix are employed to assess market dynamics and growth strategies. A SWOT analysis and VRIO framework evaluate internal strengths, weaknesses, opportunities, and threats, as well as the value, rarity, imitability, and organization of Starbucks' resources. Value chain analysis and cost-benefit analysis are also conducted. The resource-based view and McKinsey's 7S model are used to understand internal capabilities and strategic alignment. The report concludes by emphasizing Starbucks' competitive advantage and the influence of its internal and external environments on its operations, supported by relevant references.

STRATEGIC ANALYSIS OF
STARBUCKS

INTRODUCTION
Starbucks Corporation is
multinational coffeehouse chain
which has its origins in America. The
organization was founded in Seattle,
Washington in the year 1971. The
company has its operations in more
than 28,000 locations across the
world. Starbucks operates its stores
with different and unique concepts to
deliver the best service to the
customers (Starbucks Coffee
Company. 2018).

STAKEHOLDER ANALYSIS
The stakeholder management based approaches are mainly related to
the different programs that are arranged for fulfilling corporate social
responsibility. The organization has organized many CSR movements
that can increase the sustainability of the business. The company is
able to fulfil the interests and demands of the stakeholders (Ethiraj,
Gambardella and Helfat 2018).

PESTLE ANALYSIS OF
STARBUCKS
Political – The regulations that are formed by the governments affect the prices of
Starbucks.
Economic – The high growth of developing countries and declining rate of
unemployment are opportunities for Starbucks.
Social – The growth in the coffee culture and increase in consciousness and growth in
middle class also acts as an opportunity for the company.
Technological – The technology that is used by the coffee farmers affect the operations
of Starbucks.
Legal – The major legal factors that affect Starbucks are based on the safety regulations
that are used by the product.
Environmental – The sustainability based trend and growth of responsible sourcing is a
major step that is taken by Starbucks (Hill, Jones and Schilling 2014).

STRUCTURE-CONDUCT-
PERFORMANCE MODEL
The supply and demand based activities in the industry are a part of the
structure-conduct-performance model. The increase of the demands of
coffee is related to the supply that is provided by Starbucks (Hitt and
Duane Ireland 2017).

ANSOFF GROWTH VECTOR
MATRIX
Market penetration – The growth of Starbucks is based on the ways by
which the company has started writing names of the customers on
coffee cups.
Product development – The product development based step is related
to the introduction of new products.
Market development – The market development is based on the
increase in the number of stores all over the world.
Diversification – Diversification is based on the introduction of products
in new market areas.

SWOT ANALYSIS

VRIO FRAMEWORK ANALYSIS
Valuable – The brand has a strong image and offers high levels of
customer service. The environment of the stores is also quite
welcoming.
Rare – The brand rare types of flavours and unique environment of
stores.
Imitability – The other organizations face difficulties to imitate the
products and services.
Organized – The company has organized and unique customer
retention strategies.

VALUE CHAIN ANALYSIS

COST BENEFIT ANALYSIS
Cost – The costs are mainly based on the infrastructure of the stores,
staffs and the different raw materials that are required.
Benefits – The increase in market share of the company and number of
customers is based on the ways by which the company operates.

RESOURCE-BASED VIEW
The resource based analysis of Starbucks is mainly based on the ways
by which the business organizations conduct their operations. The
resources that are possessed by the company affect its operations in
the environment (Morschett, Schramm-Klein and Zentes 2015).

INTERNAL ANALYSIS OF
STARBUCKS
The internal analysis of Starbucks has been done with the help of SWOT
framework which has depicted that the company has a strong brand
image and huge network of stores as well. The weaknesses are based
on the dependency of the key inputs that are required like, coffee
beans and other raw materials.

MC KINSEY’S 7S MODEL

BENCHMARKING STRATEGIC
CAPABILITIES
Strategic capabilities are based on the ways by which the company is
able to create a competitive advantage in the market. The resources of
Starbucks have helped in providing the best level of services to the
customers (Wheelen et al. 2017).

CONCLUSION
The analysis of the strategic environment of Starbucks has depicted
that the company has been able to create a competitive advantage in
the market. This has helped the organization to survive in the industry
in a successful manner. The internal and external environment of the
company affects the ways by which Starbucks can operate in the
industry.

REFERENCES
• Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic
management. Strategic Management Journal, 39(6), pp.1529-1529.
• Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
• Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
• Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international
management (pp. 978-3658078836). Springer.
• Starbucks Coffee Company. (2018). Starbucks – The Best Coffee and Espresso Drinks.
[online] Available at: https://www.starbucks.com/ [Accessed 5 Jul. 2018].
• Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy. pearson.