Strategic Management Report: Starbucks in the Australian Market

This report examines Starbucks Corporation's strategic management approach to re-entering the Australian market after a previous unsuccessful attempt. It delves into the strategic management process, including goal setting, analysis, strategy formation, implementation, and monitoring. The report conducts a comprehensive competitive environment analysis using Porter's Five Forces model, assesses business ethics and corporate governance, and employs SWOT and PESTLE analyses to evaluate the company's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, legal, and environmental factors influencing its potential success in Australia. The analysis aims to provide insights for developing an innovative and creative strategic business plan tailored to the Australian market, considering the strong competition from local coffee shops and the specific preferences of Australian consumers. The report concludes by justifying the need for creative and innovative thinking to overcome past failures and achieve market acceptance.

RUNNING HEAD: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student:
Name of the University:
Author’s Note:

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Executive summary:
After being failed to get the acceptance of the Australian consumers, Starbucks Corporation
is interested to re-enter in the Australian market. To do that, this leading coffee chain needs
and innovative and creative strategic business plan. A detailed analysis of the company and
its business operation can be beneficial for the management team of Starbucks Corporation to
prepare the most innovative and creative business plan which will help the company to
achieve the business goal. In this report, the analysis of Starbucks Corporation will be done to
develop the most effective strategic business plan.

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Table of Contents
Introduction:...............................................................................................................................3
Strategic management procedure:..............................................................................................3
Goal setting:...........................................................................................................................3
Analysis:.................................................................................................................................4
Strategy formation:.................................................................................................................4
Strategy implementation:.......................................................................................................4
Tracking and monitoring of the strategy:...............................................................................5
Competitive environment analysis of Starbucks Corporation:..................................................5
Porter’s five forces model:.....................................................................................................5
Business ethics:......................................................................................................................6
Corporate governance:...........................................................................................................6
SWOT analysis:.........................................................................................................................7
PESTLE analysis:.......................................................................................................................8
Justification for creative and innovative thinking:...................................................................10
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

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Introduction:
Starbucks Corporation, an American coffee company, and coffeehouse chain were
established in 1971 in Seattle, Washington. At present, this coffee chain operates more than
30,000 coffee shops throughout the world (Starbucks Coffee Company 2020). The authority
of Starbucks decided to expand its business in Australia. The reason for this expansion was,
the authority of Starbucks was interested to serve espresso coffee to the consumers of
Australia. However, this expansion was not successful, as this coffee chain failed to get
acceptance in the Australian Market. The aim of this report is to analyses different stages of
strategic management, competitive environment, business ethics, and corporate governance
of Starbucks Corporation. In this report porter’s five forces analysis, SWOT analysis,
PESTLE analysis will be done to get an idea about this corporation. It can be said that
through innovation and creativity, this coffee chain can change its failure and become one of
the largest coffee chains in Australia.
Strategic management procedure:
In this part, the strategic management procedure of Starbucks will be analyzed. The
procedure of strategic management contains five stages which are goal fixing, analysis,
strategy formation, strategy implementation, and tracking and monitoring of the strategy. The
authority of Starbucks Corporation is interested to manage the failure of business expansion
in Australia. Through innovation and creativity, the management team of Starbucks
Corporation can modify the strategic plan.
Goal setting:
Starbucks Corporation had to shut down its sixty-one stores as this coffee chain failed
to get acceptance from Australian citizens (Starbucks Coffee Company 2020). Throughout
the world, this organization is successful to get acceptance from the local consumers. The aim

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of this organization is to attract Australian customers as they are fond of espresso coffee. To
do that this organization has to focus on innovative strategic plans, this coffee chain can
achieve this goal.
Analysis:
To develop an innovative and creative strategic plan for the Australian customers, the
management team of Starbucks Corporation has to conduct analysis. Those data, which will
be received from analyzing activities, will be helpful for the management team of this
organization to prepare the most effective strategic plan to get acceptance from the Australian
people. Porter’s five forces analysis, SWOT analysis, and PESTLE analysis will be done to
analyze Starbucks Corporation.
Strategy formation:
The data and information, derived from analyzing part, will be used to develop an
innovative and effective strategic plan for Starbucks Corporation. The strategic plan will
identify the most effective ways to use the resources (Ungson and Wong 2014). To achieve
the goal, the management team of Starbucks Corporation has to make an innovative and
effective strategy.
Strategy implementation:
Strategy implementation is the most significant part of the strategic management
process. The management team of this international coffee chain has to implement the
strategy to achieve the goal. The team of this organization, who is working in Australia must
have a clear idea of the plan. Employees working for this organization in Australia should
have a clear idea about their role in this plan.

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Tracking and monitoring of the strategy:
In this part, the management team of Starbucks Corporation has to evaluate the
success of the new and effective strategy. The management team has to ensure that the newly
developed strategic plan aligns with the end target (Hitt, Ireland and Hoskisson 2016). This
part will help the management team to manage any kind of unexpected shifts.
Competitive environment analysis of Starbucks Corporation:
Porter’s five forces model:
To evaluate the competitive strength and position of Starbucks Corporation, Porter’s
five forces competitive analysis must be done. The newly developed innovative strategic plan
of Starbucks Corporation has to manage these five forces.
Bargaining power of customers:
Australian customers have strong bargaining power. Most of the Australian customers
of coffee and fact food are young. So it can be beneficial for Starbucks Corporation.
Bargaining power of suppliers:
Being a leading coffee chain, Starbucks Corporation has the ability to utilize its strong
supply chain (Ivanov, Tsipoulanidis and Schönberger 2017). So it can be said that the
bargaining power of suppliers can be a strength of this organization.
Threats from new entrants:
In the business of the coffee chain, new entrants can easily enter. However, it will be
difficult for the new entrants to compete with Starbucks Corporation as this coffee chain is a
leading global business organization in this world (Campbell, Edgar and Stonehouse 2011).
Threats from the competition:

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Starbucks Corporation had to face intense competition in Australia. There are more
than six thousand coffee shops exist in Australia. Not only the leading fast-food chain like
McDonald and Gloria Jeans but also local brands own these coffee shops. So it can be said
that the newly developed strategic plane has to manage this threat.
Threats from substitutes:
Threats from substitutes factor for Starbucks Corporation is high because in Australia
there are several other business organizations that are delivering the same quality of coffee
and food items to the customer. The need of the customer is fulfilled by other substitutes. So
it can be said that this factor can be threatening for Starbucks Corporation.
Business ethics:
By maintaining the ethical aspect, the management team of this leading coffee chain
conducts its business. To achieve the business goal, Starbucks Corporation follows the most
ethical plan. This organization is interested to protect the reputation and culture of Starbucks
by providing several resources. By using these resources, partners of this organization take
ethical decisions for the company. The mission of this organization is to maintain ethical
aspects while doing business (Starbucks Coffee Company 2020).
Corporate governance:
The governance principals, policies and committee charter of Starbucks are controlled
by the board of directors of this coffee chain. At present thirteen directors are part of the
board of directors of Starbucks (Starbucks Coffee Company 2020). As a leading coffee chain
of this world, Starbucks Corporation is committed to fulfilling its corporate social
responsibilities. Several community development programs are controlled by this
organization. The improvement of the people from the host community is ensured by this

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organization. To secure beans, the production procedure of Starbucks is managed by the
authority.
SWOT analysis:
To analyze the business operation and identify strength, opportunity, threat, and
weakness, this analysis will be used. In this part, the SWOT analysis of Starbucks
Corporation will be done. To develop an innovative and effective strategic plan for Australia,
SWOT analysis of the organization is necessary.
Strengths:
Starbucks Corporation is one of the largest and successful coffee chains in this world.
To implement an innovative strategy, this organization can take quick steps. In case of any
modification is needed, this company has the capability to do it (Geereddy 2013). The
positive goodwill of this company is the strength of Starbucks Corporation. The economic
condition of this organization very well sound.
Weaknesses:
The previous expansion in Australia was not successful. Though the success rate of
Starbucks Corporation’s expansion is very high yet this coffee chain failed to get the
acceptance of the Australian citizens. To achieve the goal for Australia the management team
of this organization has to manage all the obstacles through the strategic plan.
Opportunities:
The government of Australia is very much supportive of the fast-food industry and
coffee chain. It can be a strength for Starbucks Corporation. Australian youths are not only
fond of coffee but also the largest spenders of fast food. Australian youth are the largest
coffee consumers in this world. Being a leading coffee chain, Starbucks Corporation can

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afford and adopt various different modes of entry to capture the Australian market (Lemus et
al. 2015). An innovative and creative strategic plan can be helpful for this company to attract
Australian youth.
Threats:
In the Australian market, Starbucks Corporation has to manage an intense
competition. Local coffee shops are properly developed and mature enough to fulfill the
demand of the local Australian consumers. This coffee chain has to compete with more than
six-thousand coffee shops, which are already well established in the Australian market (Roby
2011). The coffee culture of Australia is very high and these local coffee shops are
successfully fulfilling the demand and taste of Australian customers.
PESTLE analysis:
PESTLE analysis, a strategic planning tool, is used by a business organization to
detect the political, economic, social, technological, legal and environmental factors. This
analysis will help Starbucks Corporation to develop an innovative strategic plan for Australia.
Political:
The fast-food industry and coffee chain are important for the Australian government.
The economy of this country is benefitted by these industries. Being a leading coffee chain of
this world, Starbucks has the ability to influence the Federal government of Australia.
Though this leading coffee chain failed to get the acceptance of the Australian citizen yet it
can be said that the Federal government will receive positive support from the government.
Australia is a politically stable country. If this coffee chain will get the acceptance of the
Australian citizen then Starbucks Corporation will be successful in Australia.
Economic:

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The economy of Australia is getting benefit from the fast-food industry and coffee
chain. The government of this country is very much supportive of this industry as it is one of
the major industries that contributed most to the Australian economy. The growth of the fast-
food industry can be helpful for Starbucks Corporation to get the acceptance of the Australian
citizen.
Social:
The character of the Australian citizen is cosmopolitan largely. Local culture and
traditions of this country are prioritized by ethical and racial groups of Australia. Due to
immigration and variation of environment, differences in lifestyle are present in Australia.
Citizens of this country are fond of espresso coffee. So it can be said that this organization
has to impress the coffee lover of this country.
Technological:
Regional organizations of Australia have been investing in Australia for the technical
development of Australia. Australia is a well-connected country. Technological development
changes the preference of an Australian citizen. Customers of this country are interested to
get the fast-food and services through online platforms. So it can be said Starbucks
Corporation has to develop a technologically advanced system to fulfill customer demand.
Legal:
Starbucks Corporation imports coffee beans. This organization has to follow the
import laws of Australia. To achieve positive support from the Australian government, this
organization has to ensure that every law and regulations, implemented by the Australian
government, must be followed.
Environmental:

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This coffee chain has to follow environmental rules and regulations to maintain its
brand reputation. To fulfill its CSR, this organization has to manage global warming and
other environment-related issues. This organization has to ensure an environmentally friendly
business operation for Australia. Starbucks Corporation has the ability to use advanced
technologies to manage environment-related issues.
Justification for creative and innovative thinking:
In its previous attempt to expand business Australia, Starbucks Corporation was not
successful to get the acceptance of the Australian citizen. That is the reason, this leading
coffee chain has to implement an innovative, creative and effective strategic plan for
Australia. Creative and innovative thinking will help the management team of this company
to understand the demand of Australian consumers (Mazzucato 2016). Using creative and
innovative thinking will help this company to achieve the goal by aligning the best employee
practice and enthusiasm of the employee.
Conclusion:
The aim of this report is to analyze an innovative and creative strategic plan for
Starbucks Corporation, which is interested to recapture the Australian market. To develop an
innovative and creative plan, an analysis of the business operation of Starbucks is needed. To
do that SWOT analysis, Porter’s five forces and PESTLE analysis was done. After these
analyses, it can be said that with the support of the Australian government and innovative and
creative strategy, Starbucks Corporation can get the acceptance of Australian citizens. To get
the acceptance of the Australian youth, this coffee chain has to provide the best quality
espresso coffee in Australian. By implementing the new creative and innovative strategy, the
management team of Starbucks Corporation can be successful in Australia.

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References:
Campbell, D., Edgar, D. and Stonehouse, G., 2011. Business strategy: an introduction.
Macmillan International Higher Education.
Geereddy, N., 2013. Strategic analysis of Starbucks Corporation. Harward [Електронний
ресурс].–Режим доступу: http://scholar. harvard. edu/files/nithingeereddy/files/starbucks_
case_analysis. pdf.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Ivanov, D., Tsipoulanidis, A. and Schönberger, J., 2017. Global supply chain and operations
management. A Decision-Oriented Introduction to the Creation of Value.
Lemus, E., von Feigenblatt, O.F., Orta, M. and Rivero, O., 2015. Starbucks Corporation:
Leading Innovation in the 21st Century. Journal of Alternative Perspectives in the Social
Sciences, 7(1), pp.23-38.
Mazzucato, M., 2016. From market fixing to market-creating: a new framework for
innovation policy. Industry and Innovation, 23(2), pp.140-156.
Roby, L.R., 2011. An Analysis of Starbucks as a Company and an International Business.
Starbucks Coffee Company (2020). Business Ethics and Compliance | Starbucks Coffee
Company. [online] Starbucks Coffee Company. Available at: https://www.starbucks.in/about-
us/company-information/business-ethics-and-compliance [Accessed 4 Feb. 2020].
Starbucks Coffee Company (2020). Company Information. [online] Starbucks Coffee
Company. Available at: https://www.starbucks.com/about-us/company-information
[Accessed 4 Feb. 2020].

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Starbucks Coffee Company (2020). Corporate Governance. [online] Starbucks Coffee
Company. Available at:
https://www.starbucks.com/about-us/company-information/corporate-governance [Accessed
4 Feb. 2020].
Ungson, G.R. and Wong, Y.Y., 2014. Global strategic management. Routledge.