Starbucks Business Strategy: A Comprehensive Analysis

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Business Strategy
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Contents
Introduction......................................................................................................................................3
LO1) Analysing the impact and influence of macro environment in Starbucks.............................3
Applying frameworks for analysing macro environment in Starbucks (P1)...............................5
Analysing the Macro environment and informing the strategic management decision (M1,D1)
.....................................................................................................................................................9
LO2) Assessing internal environment and the capabilities of Starbucks......................................10
Framework for analysing the internal environment and the capabilities (P2)...........................10
Analysing the internal environment with strength and weakness (M2)....................................13
LO3) Applying the outcomes by applying Porter’s five forces model..........................................15
Porter's five forces of Starbucks (P3)........................................................................................15
Appropriate Strategies for improving the market position of the organisation (M3)................16
LO4) Models, theories and concepts for assisting the strategic directions available to an
organisation....................................................................................................................................18
Range of theories and models for interpreting the strategic planning (P4)...............................18
Tangible and tactical strategic priorities of Starbucks (M4).....................................................21
Conclusion.....................................................................................................................................22
References......................................................................................................................................23
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Introduction
The study has introduced different strategy for operation, tactical and strategic role in Starbucks.
Starbucks is one of the famous coffee company and coffeehouse chain which was founded in
1971 and operates over 30,000 location worldwide. In the first section the mission and vision of
the organisation has been well described with strategic management decision and different
theories. Later part has described about the internal environmental capabilities and adoption of
porter's five forces model for understanding the competitive age. In the last, appropriate model
has recommended and used for defining the strategic planning of Starbucks another option of
smart objective which has improved the business.
LO1) Analysing the impact and influence of macro environment in Starbucks.
The headquarters of the Organisation in London, UK which focus on directly on the vision,
mission and objective to meet the target in the challenging market.
Mission: The mission statement of the organisation reflects the company to run the business and
focus on the target consumers. According to the mission statement of the organisation the
strategic management has helped to grow the business by following:
Inspiration and nurture the human spirit.
Neighbourhood, friend and professional time with a cup of coffee (Satalkina, and Shpak, 2018).
Vision: The vision statement of the organisation focus on establishing premier purveyor of the
finest coffee in the world while maintaining the uncompromising principles in the market.
Objectives.
Objectives: The main objectives of the organisation are:
 Expanding the sphere of influence in the market and create loyalty among the customers.
 Make profit as much as the organisation can.
 Improving the brand and customer service.
 Better core of values for creating a better positive corporate culture.
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Figure 1: Logos of Starbucks.
(Source: Kwak, et al. 2019)
Role of strategy and achieving business objectives through strategic intent and different strategic
direction: It is important for Starbucks true focus on the strategy of new business plan of the
organisation so that it can achieve the objective. The company needs to focus on 4 role of
strategy:
Framework for operational planning: It will focus on the operational plan for the development
of the resources and business area in the different geographical region and introduce new product
in the market.
Clarity in direction of activities: The strategic focus on direction of activities needs to be more
clear and specific which will define the profit earning of the organisation by meeting the social
objectives (Gutiérrez-Santillán, et al. 2019).
Increase the effectiveness of organisation: It is important for the organisation to meet
efficiency which will contribute to the objectives of the organisation.
Personal satisfaction: This strategy will contribute the organisation to provide satisfaction with
formal strategic management process and reduce the role of conflict and ambiguity.
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Applying frameworks for analysing macro environment in Starbucks (P1).
The different type of rainwater and analysis of the Macro environment that the organisation has
included are:
Stakeholder analysis: Stakeholder management of Starbucks focus on Stakeholder Matrix and
stakeholder mapping. The current bond of the organisation include different stakeholders
Strategies and success:
Employees: The organisational culture emphasize on the first attitude of the Employees and
improve the CSR performance of the stakeholder based on the partnership.
Customers: The organisation provide high quality services and coffee to the customers at its
cafe. It also focus on warm and friendly relation by interacting with feedback forms (Dalton, and
Thatcher, 2019).
Suppliers: The main interest of the stakeholder group is to grow the demand of starbucks.
Farmers have aimed to increase the coffee by generating more revenues and increasing the Social
Responsibility program.
Environment: It has focus on the environment sound business with CAFE programs which has
led to higher biodiversity.
Investors: The investor self-game the financial performance of the company and has continued
to dominate the coffee house industry to satisfy the needs of the stakeholders.
Government: The organisation focus on rules and regulations adopted by European countries to
exploit tax advantage (Real, and Percell, 2018).
The stakeholder matrix has analyse the project stakeholder of Starbucks to determine the action
required for achieving the goals and objectives. On the other hand the stakeholder mapping has
helped the stakeholders to have a visual representation of the criteria during developing the
projects.
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Figure 2: Stakeholder mapping and matrix.
(Source: Satalkina, and Shpak, 2018)
Environmental analysis: It has focused on Pestel analysis and Porter’s five forces model.
Pestle analysis of Starbucks:
PESTLE Impacts
Political factors It has focused on the politicians in the west
and from the source countries in UK. Another
impact is the laws and regulation of Starbucks
raw materials. Activism has increased
Political awareness in UK which has helped
the organisation to grow in different parts of
UK along with London.
Economic factors The organisation has offered cheaper products
which is the quality. The main social cultural
challenge has expanded the consumer base for
including the buyers from the lower and
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middle income tires (Greer, 2018). The green
and ethical chic improves the Social and
environmental cost.
Social cultural factors It has offered products and expand the
customer base from the lower and the middle
come tiers.
Technological factors Starbucks is in good position for enjoying the
benefits of the discount coupons which is the
mobile application easily among the
customers. It has introduced Wifi capabilities
and biotechnological developments.
Environmental factors It is concerned with the activist and
international advocacy group to solve the
problems in the global level (SÁNCHEZ
SADA, 2015)
Legal factors It has insured laws and regulations set up the
government in UK. The caffeine and
consumption has focused on health
authorities.
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Figure 2: Five Forces analysis model.
(Source: Kwak, et al. 2019)
The organisation has also follows the competitor analysis for future development and complete
in the market.
Figure 3: Competitor analysis in UK.
(Source: Kwak, et al. 2019)
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Analysing the Macro environment and informing the strategic management decision
(M1,D1)
The analysis of macro environment has been conducted by adopting Ansoff growth vector
analysis and data of the benchmarking indicators of the organisation.
Ansoff growth vector analysis:
Starbuck is pursuing long term strategy for diversifying the core offering in the market of UK.
The Ansoff growth vector was utilised to understand the diversification for increasing the sale.
Market penetration: It is a growing sales in the existing market. The organisation has started
writing the names of the customers on coffee cups for greater customer satisfaction (Greer,
2018).
Product development: The organisation is trying to introduce new product and premium coffee
with exclusive beans.
Market development: It is growing the sales by launching the products in the market and
operating services initially.
Diversification: The potential of increasing the sales have risk strategy. The Planning and
development of the new food items requires a lot of diversification to the new market.
Figure 4: Ansoff’s growth vector.
(Source: Bonelli, 2017)
The organisation has also focused on Benchmark indicators.
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Figure 5: Benchmark indicators of Starbucks.
(Source: Gutiérrez-Santillán, et al. 2019)
LO2) Assessing internal environment and the capabilities of Starbucks.
Framework for analysing the internal environment and the capabilities (P2).
The strategic position is considered as one of the important planning process steps in the
organisation. Starbucks have understood the internal size according to the name of the
customers. The organisation has also focus on the internal capability slide Human Resource
Department and financial department for measuring the capacity planning process. Along with
this, it will measure the different organisational goals and objective so that it can improve
planning for new development in the product. By considering the first step, the capacity planning
of the organisation consider different measures according to the size and revenue of the
organisation (Dalton, and Thatcher, 2019). Recently the organisation has also focus on the
operational activities which help makes easily by improving the internal capacity of Starbucks. It
is very important for the organisation to forecast the future development which is related with the
achievement of different organisation and measure the market situation.
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To complete more with new competitions arriving in the market Starbucks can use VRIO model
and Mckinsey 7s model.
VRIO model: Starbucks has already 22500 stores which has achieved a success in the ethical
business and customer service with quality product of coffee and beverages. The organisation
has grabbed the position of number one coffee brands and has been critically excellent my
minimising the weakness. The adoption of VRIO analysis will present a deeper analysis for the
sustainable competitive advantage of the organisation.
Valuable: It has a highest strong image with more than 35% customer satisfaction that has
increased the reputation of the brand. Along with this, the strong feedback from the customer and
store environment has increased the popularity and improved the supply chain management
(Ardito, and Dangelico, 2018).
Rare: The strong band has become challenging for the organisation has the new competitions are
arising with different products. The significant investment of procurement has helped the
organisation to create special flavours.
Inimitable: It has focused on the long-term profitability and also on the loss which has become
difficult because of the prices and procedures. The organisation has also Face problem in the
supply chain management for the long some because of not imitating in investment.
Organised: The organisation is much organised and the main focus is on the marketing and
customer retention strategy. The organisation has adopted 98% the coffee ethically and has
improved the revenue (Sholihah, et al. 2016).
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Figure 6: Vrio analysis of Starbucks.
(Source: Dalton, and Thatcher, 2019)
McKinsey’s 7S model: The model was adopted by by Tom Peters and Robert Waterman in
1960 to give a brief about the seven internet of the organisation. It has focused on the internal
environment of the Starbucks (Wilhelm, 2016).
SEVEN “S” Strength Weakness
Strategy It has concentrated on the It has extreme rivalry with in
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