Business Strategy Report: Starbucks, Macro & Internal Analysis

This report provides a comprehensive analysis of Starbucks' business strategy, delving into its macro and internal environments. The report begins with an introduction to business strategy and its importance, followed by an application of the PESTLE framework to assess the impact of political, economic, social, technological, legal, and environmental factors on Starbucks. It then utilizes stakeholder analysis to identify key stakeholders and their influence. The internal environment is analyzed using SWOT and VRIO frameworks, evaluating Starbucks' strengths, weaknesses, opportunities, and threats, as well as its resources' value, rarity, imitability, and organization. Furthermore, Porter's Five Forces model is applied to evaluate the competitive forces within the market sector. The report concludes with a discussion of strategic planning and recommendations for Starbucks, drawing upon various theories, models, and concepts to address the challenges and opportunities identified throughout the analysis.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Apply different framework to analyse the impact and influence of macro environment of
Starbucks along with strategies..............................................................................................3
TASK 2............................................................................................................................................5
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................5
TASK 3............................................................................................................................................7
Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation..................................................................................................................7
TASK 4 ...........................................................................................................................................8
Applying range of theories , models and concepts and strategic planning for a given
organisation............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy refers to integral; part of the business in which there are different type
of plan and strategy are there which can help the business in the better growth and development.
This is the one which is able to help the business to get better plan and strategy which can be
implemented for the better business and have the high productivity with better sales. In this
report there is introduction about the hurdling situation along with their interpretation. In this
report there is study about the Starbucks which is a leading firm for the beverages and there are
different difficulties which are there facing by the organisation. In this, there is also discussion
about the internal and macro environment analysis along with the porter's five model and their
interpretation. It also includes the management strategic plan which is essential to combat the
situation (Khan, 2020).
TASK 1
Apply different framework to analyse the impact and influence of macro environment of
Starbucks along with strategies
There is high need to analyse the macro environment of the business in relation to
analyse better about the existing business. For this, there is use of PESTLE analysis which is
there able to analyse different factors which are there able to impact on the business and their
strategies. Factors are like political, social, economic, technological, legal and environmental.
PESTLE ANALYSIS
this is the analysis which is used to understand the external environment of the business
in relation to use those analysis to create the best strategy which can help the business to grow
better.
Political- This is the first factor which includes the taxation, trade laws, subsidiaries
which are there able to influence the business which is there concerned with the government.
Starbucks is one of the big brand which is having their business in all over the world. Due to
change in the politician effect there is need to change and modification in the laws and policy for
that country. This is highly effective due to need to have the present information regarding the
new policy and international laws and legislation (De Sousa Jabbour, 2019).
Economical- This is the one which is highly effective and have the potential to highly
impact the Starbucks business. In this, when there is better economy of country effect the

business which is able to direct impact the business. Better economy of the country allows
people to better purchasing power and vice-versa. This is the one which have direct impact on
the Starbucks business.
Social- This factor includes the public and its customer which are there as the customer
of business. There is need to satisfy their customer which is there having the chain. Starbucks
need to focus on the social engagement which is there can help the business to create awareness
and should have better impact on the business.
Technological- This factor includes the new technology which can be used to get the
better business and have the high impact on the business of the Starbucks. Starbucks is the one
which is able to use the latest technology which is there due to having high revenue. Due to
having power to user the latest technology which can help to get business and able to earn more
profit (Khedmati, 2019).
Legal- As Starbucks is the big brand and due to this they are having different branches in
different country. There are many of the legal laws and legislation is there which is able to
impact the business of Starbucks. There are different lays which are there chance can creates
large difference in the conducting the business and may impact either positive and negative
impact on the Starbucks business.
Environmental- This is the factor which is there able to impact the business which is
there can have different impact on the Starbucks business. Each and every government and
public of different country are there who like to support the environment and in relation to this,
there are many of the measure which have taken by the Starbucks in relation to conduct different
step to keep the environment safe.
Stakeholder analysis
This is the analysis which is able to analyse the detailed information of the people ro
stakeholders who are there involve in the organisation should be valued as an important
stakeholders which are there impact on the Starbucks business (Kokubu, 2019).
High power, high interest- employees of the Starbucks are important and having high
value which are there able to play an important role as the stakeholder. They are having high
value with high power which is over the operation and high profit. Customers are also the top
most stakeholder of the Starbucks which is there able to give high quality of interest which is

there to maintain the loyalty. Due to having the interest in the profit which is there able to
influence and attracts large consumer base.
High power, Low interest- There are the supplier who are having high power over the
business which is because they are able to provide raw materials which are used for the
production of the final product which is Coffee. This is also able to reflect the rates and relative
profits of organisation of bad quality or there may be high rates which is there to lead as the
regular practices.
Low Power, High interest- Employee are the people who are having the high interest in
the profit of the Starbucks business and due to not having part in the operation management for
the production which is there having less power of decision making. Moreover they are having
high interest which is there dependent on the specific store profitability.
Low Power, Low Interest- There is least power and interest which is there in the field of
health there is no any type of decision making power or any type of authority. There is also no
any interest in the profitability which is there in the Starbucks business. It is also concerned with
the factor which is there related with production and operation where different activities of the
firm which are not appropriate in matter (Anwar, 2018).
TASK 2
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
SWOT
This is useful and effective model for the organisation performance analysis along with
the identification of the aria of change and improvement . With in the aid of this tool Starbucks
Inc. can effectively analyse their internal environment and capability. This include the four major
factors to analyse and evaluate the organisation, explain below.
Strengths- This is primary part of the model which involves the analysis organisation
strength in order to evaluate their internal capabilities. Starbucks is the world popular coffee
brand and its strength is their brand value, they are having the loyal customers throughout the
world by the influence of their quality and taste. They are having long chain market and stores
internationally. Starbucks is consider as the positive socio-cultural organisation due to their
huge support and benefits offers for employees and customers.

Weaknesses- Starbucks is facing problems and criticism due to their higher price rate
and minimum variates of the product's. Lass modification and updating of the operational
function is can be reason for developing more competitor (Han, 2020).
Opportunities- Organisation is having opportunities of further more growth due to the
higher brand value, market share and trust of the customers, so they can growth this brand with
in the offer of new more product's with in innovative ingredient and test, they can use their
strong finical condition to develop more product's line.
Threats- For Starbucks there are the various factors which can work as the threat such as
development of new substitutes and small cafe houses with innovative product's and services,
so computational and loss of the investor's is can be a biggest Threats for organisation.
Starbucks can use their use their market value and stability to introduce new product's in
the market. They can offer the more effective and quality product's into the market in order to
increase brand size and growth.
VRIO
Resources VALUE RARE IMITATE ORGANIZED
Employee
Compensation
Yes No No Yes
Free WI-FI Yes No No Yes
Employees
benefits
Yes No No Yes
Customers
experience
Yes No No Yes
In context to the selected organization VRIO analytical tool is used in order to study the
capabilities of the organisation. With in the aid of this outcomes result of the company
capabilities are place into the accurate area of improvement and computational advantages.
VRIO is known as the Value which tells the aspects of different criteria of business value. Rare
is the factor which highlight the features of the organisation and imitate represent the aspects of
competitor imitate. Organized is representing the factors which are very organize in the
organisation (Bonsu, 2019).

From the above study and evaluation it has been observed that the from the functions and
service of the organisation customers experience are valuable and organized, along with
employees satisfaction is valuable and organized with best offer and benefits, employees
Compensations along with the free WI-FI system is well organized and valuable.
TASK 3
Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for
an organisation.
Porter`s Five Forces Model
This is the most important tool of the organisation management which helps to analyse
the different market and environmental forces in context to the organisation. It helps to analyse
the competition, helps to understand the intercity of competitors and objectives of the
profitability. This model involve the analysis of internal factor such as bargaining power of the
customers and organisation capabilities, along with the evaluation of new entrance, substitutes
and suppliers bargaining power (Ziliani, 2019).
Competitive Rivalry:
Starbucks one of the best beverage producer with in the unique taste of coffee but that is
having the huge rivalry due to the development of new technologies and easy access of the
business into the new market. Such as they have the huge competition from the different existing
coffee stores, small and large coffee stores along with the mobile cafe.
New Entrants:
Organisation have right to keep their data confidential,they can hide the their ingredients
and production formula from other. But due to the new techniques and innovation, new start-up
business enter into the market. But they can not impact the Starbucks due to the valuable image
of the company and loyal customers.
Bargaining power of the customers
Customers are sensitive to product price rate and they can move from one brand to
another due to the cost differentiation and offer of the lower price product's. This is the common
factor which impact almost every business organisation. So in context to this organisation have
to manage their price rate effectively, because bargaining rate of the customers is high and that
can be influence by the compositors (Eastmure, 2020).

Bargaining power of the supplier
Supplier bargaining power is depending on the type of organisation relationship with
them and on the basis of agreement they are having. Starbucks is having multiple suppliers for
their product's and raw material. So in context the organisation suppliers bargaining rate is lower
then the company. Strong relationship helps to manage the bargaining rate lower stage. So this
environmental force is beneficial for organisation.
Threats of Substitution
Market is growing with new innovative strategies and development ideas and due to this
there is the high level of business substitute threat. Various other coffee stores and cafe are
developing the new substitutes of the marketing strategies and product's with in the aid of new
techniques and innovative ideas, so this can be a biggest competitive force for the organisation.
Starbucks is facing huge loss of he customers and tension due to the different alternatives of
product's in market (Chase, 2018).
TASK 4
Applying range of theories , models and concepts and strategic planning for a given organisation.
Porters generic model
The term porter generic is known as cost leadership. The generic model demonstrate the
profits of the firm and longevity of an external environment. This model mostly highlights the
differentiation and the low cost and its two aspects in order to stand within the dense competition
which already a firm has. There are many discussion held which was often made by the cost
leadership, and in addition focused on the strategies which lead to the profits in the market.
However choices were given but even though decision were depend upon the industry type and
the current scenario. The broad differentiation has been utilised by the firm because they have
essential and effective policy which expands the business as well as enhancing a good image in
the market. The main aim of firm is to provide the range of products which are barely similar to
other and perhaps target the number of customers according to their demands and uniqueness.
The firm they already has high costs as compared to the competitive brands therefore there is
need of using models of cost focus in addition to target market area and along with this to
introduce beverages with the cost further which could be reasonable for the group of people in
the market.

Strategic management plan
Executive summary– The strategy have been designed in order to accomplish the goals
by comply the procedures and plans and they are well shaped according to the situation. This
process includes each and every areas additionally the relative advancements too.
Vision– The firm always shares its extensive vision and ethical vision so that they can
provide their customers same as their family and further quality would be excel.
Mission– The term Starbucks they always have their specific and clear mission, which is
always rotated among the customers. The main aim of company is to provide comfort zone and
broad experience to the number of customers.
Objective– The firm , they usually have multiple objective which provides excellent
quality and additionally provides finest exposure to the customers wherever their store has been
established. They also makes plan thus to win the brand loyalty of the customers.
Strategy– Always Starbucks makes plans so that they could lead the market by putting
various markets and further they can create a strong base of customers along with the excellence
and brand name.
Tactics- There are many brands which have been utilising many market tactics therefore
to established their place, furthermore which including quality based on the differentiation, in
order to provide products with best quality and varieties, and methods such as free WIFI and
having interaction to drag the attention of the customers as well as attracting the customers. They
also have been using exclusive experience for the customer orientation (Shcherbakova, 2020).
CONCLUSION
As per discussed above , the report shows different types of methodologies which needs
to be discussed and researched while making strategy for an organization. The complete version
of several methods is commonly applied on the Starbucks. The conclusion explains that firm has
been doing a good job by providing the finest quality and exclusivity.

REFERENCES
Books and Journals
Khan, 2020. Microfoundations of dynamic capabilities: Insights from circular economy business
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De Sousa Jabbour, 2019. Going in circles: new business models for efficiency and value. Journal
of Business Strategy.
Khedmati, 2019. Business strategy and the cost of equity capital: An evaluation of pure versus
hybrid business strategies. Journal of Management Accounting Research, 31(2), pp.111-
141.
Kokubu, 2019. Sustainability Management and Business Strategy in Asia (Vol. 16). World
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Anwar, 2018. Business model innovation and SMEs performance—does competitive advantage
mediate?. International Journal of Innovation Management, 22(07), p.1850057.
Han, 2020. Theory of green purchase behavior (TGPB): A new theory for sustainable
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Environment, 29(6), pp.2815-2828.
Bonsu, 2019. Strategic Management: The Concept of Competing With Self. Journal of
Marketing and Management, 10(2), pp.20-44.
Ziliani, 2019. GETTING LOYALTY RIGHT: BARILLA AND STARBUCKS. Loyalty
Management: From Loyalty Programs to Omnichannel Customer Experiences, p.18.
Eastmure, 2020. Non-market strategy as a framework for exploring commercial involvement in
health policy: A primer. Social Science & Medicine, 262, p.113257.
Chase, 2018. Operations and Supply Chain Management, 15e (SIE). McGraw-Hill Education.
Shcherbakova, 2020. Importance of Diversified Marketing Strategies for Fast Food Restaurant
Chains. Available at SSRN 3738461.