Strategic Management Report: Starbucks Company Analysis

This report presents a strategic analysis of Starbucks, a leading coffeehouse company. It begins by examining Starbucks' strategic direction and the evolution of its strategic thinking over a five-year period, including its strategic planning and technology strategies such as online delivery applications and technology implementation. The report then delves into a detailed analysis of the coffee industry, employing PESTEL, SWOT, and Porter's Five Forces analyses to understand the external and internal factors influencing Starbucks' business. Further, the report explores Starbucks' mission and vision statements, assessing their alignment with market demands and analyzing the company's strategic capabilities, including its strengths and weaknesses. The report concludes with a discussion of strategies Starbucks could employ to define its core business and recommendations for continued success.

Strategic Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Strategic direction of the company and development of strategic thinking within 5 years......3
TASK 2............................................................................................................................................5
A detailed analysis of the industry in which company is operating their business. ................5
TASK 3............................................................................................................................................7
Mission and vision statement .....................................................................................................7
The companies strategic capabilities...........................................................................................8
TASK 4............................................................................................................................................9
Discussion on the strategies which company should follow to define their core business......9
REFERENCESS............................................................................................................................11

INTRODUCTION
Strategic management is the ongoing planning, monitoring, analysis and assessment of all
that is necessary for an organization to meet its goals and objectives. Changes in the business
environment require organizations to constantly assess their strategies for success.
This report will take case study of Starbucks company which is American
multinational all chain of the coffeehouse and rostery reserves and this companies headquarter
is in seattle, Washington. This is the largest coffeehouse in the world and it is seen to be the
main representation of the United states' second wave of the coffee culture. This report will
discuss the strategic direction which has been followed by the company and their strategic
thin\king development within 5 years, it will be explained through the models such as Servo
Model, strategic planning of the company and companies technology strategies. Task 2 will be
about the analysis of the industry where Starbucks company is operating their business. It will
include SWOT, Pastel and 5 forces Analysis. In the task 3 report will discus about the mission
vision and objectives of the company in detail and what are their strategies to achieve their
objectives. This report will also discuss the strategies which company could follow to defect
their core business and In the end of this report will discuss all the task and analyze the
resources implemented by the company at their workplace and it will also provide the
recommendations which Starbucks company has to address to get success in their business.
TASK 1
Strategic direction of the company and development of strategic thinking within 5 years
` Starbucks is one of the top coffeehouse company who are providing premium class
coffee to the people and it is an mixture of the American culture. Str4atgic management of the
this company has their perspective that is outwardly focused , forward thinking and the
performance based (Ahmadi, Maleki and Ahmadi., 2019). The strategic thinking of the
company has change within the 4- 5 years and they have implemented many new technologies
and strategies to make their business more better. Their firs priority is to provide quality
product to their customers which can satisfy their needs and their demand.
Strategic planning of the Starbucks
Starbucks is most successful company in today's date and this company has grown
between within the 5 years. From the tasty beverages top proprietary whole bean fee blens to
the relationship in the strategic , small business have many things which they can learn from

this company and use the strategies in their own business. Starbucks company has their own
strategic planning and they follow some of the following concepts which makes them
successful
Think Big - This company is started from the small shop but even early on it always has the
big ambitions. They believe to think big which is the key of the success and this company had
grown up very fast within a 5 years of period.
Think outside the box- Starbucks’ strength lies in its ability to spot opportunities, even if that
means debunking accepted retail trends. Starbucks’ ability to think outside the box is a common
trait that propelled other small businesses to the big league. Starbucks has well demonstrated this
behavior in their approach to real estate, which in itself is legendary (Bell and Rochford., 2016).
Contrary to established tenets of retailing, the company does not choose a location based solely
on demographics, traffic patterns, location of competitors, and even spacing of its own stores.
Employee motivation – company believe to motivate their employees and things shows their
strategic thinking. They provide the training to their employees, so they can learn new skills,
and they also get keep motivated. They are also having reward polices for their employees
which is the best way to motivate their employees.
Technology strategy
Online delivery application
Starbucks have taken huge advantages of the technology to make their organizational
strategies better and smooth. Last 2-3 years they are spending their most of the finical resources
on the technology and one of them is their online delivery application. They have develop their
own app which can be used by the people for the coffee delivery from the Starbucks at their
home. This is time saving and helping them to provide good experience without going to the
physical store of the Starbucks company.
Implementing Lot to deliver the smooth coffee experience
Each and every store of this company has dozen pieces of the equipment , from the
coffee machines to grinders and lenders, that must be operational around 16 hours every
day. This makes their company more better and smooth and they can provide fast delivery to
their customers To reduce the disruption to the experience and securely connected their
device in the cloud , Starbucks is partner with the top software company Microsoft to deploy

Azure Sphare designed to secure the coming wave of the connected internet of things (LOT)
devices across their stores equipment.
TASK 2
A detailed analysis of the industry in which company is operating their business.
Company is operating their business in all around the world, and they are having huge
reputation in the markets. There are some factors which affect the companies polices,
operation etc (Bryson., 2018.). Not online Single company but it also affect the whole beverage
industry. Here are some farm-work which can help to understand the internal and external
factors which affect the profitability of the company.
PESTEL analysis
Political factors
The main political factor is about sourcing the raw materials. This has gathered a lot of
the attention from politicians in the West and from the source countries. For this reason, the
company wants to adhere to social and environmental norms.
Economical factor
Economical factors such as currency of the another country can create problem for the
company. Starbucks is American company and their main currency is dollar which is strong
currency but they are operating their business in another country and if the value of the
particular countries currency fall down then it creates problem I the exchange of the currency
and company can face loses (Cassidy., 2016).
Social
The “green” and “ethical chic” consumers are also concerning. They fret about social and
environmental costs of the brands. Starbucks has to be aware of this trend.
Technological
It has huge huge advantages to the company because technology is making their
operations smoother and they are able to provide good experience to their customers.
Environmental
It important for the Starbucks company to give their support toward the environment
which can be beneficial for the company, and they can create good image among the people and
take competitive advantages.
Legal

Starbucks is following all the legal rules of the company, and they used to provide their
employees their rights according to the particular country. They are having license to work
internationally and sell beverages in the other countries.
SWOT analysis
Strength
 Starbucks is most popular company among whole beverage industry and this
company has their brand value which is around 11.7 billion dollars
 financial resources of the company is strong and they are using their financial resources
to expand their business.
Weakness
 Prices f their product s high sop it is not possible for the every person to spend high
amount just for an coffee.
 Over the years this company has recalls a lot of in- demand products. This is an
negative impact on their market image and they case lose customers loyalty (Nickols.,
2016).
Opportunities
 Development in the online application can create opportunities for the Starbucks
company, and they can take competitive advantages.
 Company is popular in every country and their product run on the basis of their brand
names. Company can gain success if they launch some other product.
Threats
 Increase in competition in the beverage market is creating threat for the Starbucks.
Other companies are taking offering less prices products which can create problem for
the Starbucks
 Products can be imitated by the both new and the old rivals.
Porter's five forces
Threat of new entrants
This is an strong force for the new entrants because In the beverage industry needs
high financial reprocess which makes threat for the new entrants. They need to spend
company on the equipment, resources, row material, etc.
Competitive rivalry

Competitive rivalry or competition is very high in the industry where Starbucks s
operating their business (Öz., 2019). New business can face strong competition in this industry.
Big brands like Starbucks has already strong hold in the industry so it will be difficult for the
new brands to take competitive advantages.
Bargaining power of buyers
Bargain power of the customers is low Starbucks company is strong premium pricing
strategy which means company's costumers are rich people who can easily but the high price
products from them.
Bargaining power of supplier
The moderate size of individual suppliers is an external factor that imposes a moderate
force on Starbucks. However, the high variety of suppliers weakens their bargaining power.
Threat of substitute products
Starbucks Corporation experiences the strong force or threat of substitution. In the Five
Forces analysis model, this force pertains to the impact of substitute goods or services on the
business and its external environment.
TASK 3
Mission and vision statement
Mission
“to inspire and nurture the human spirit – one person, one cup and one neighborhood at a
time.
Vision
to “treat people like family, and they will be loyal and give their all.”
The mission and vision statement of the Starbucks Corporation is aligned with the
demand of the market with their quality and uniqueness in the product which provide the
satisfaction to their customers and fulfill the demand of their customers (Huikkola and
Kohtamäki., 2017). Simply meaning of their mission is that they want to establish their
company as a premier purveyor of the finest coffee in all around the globe by maintain their
quality, and they are one of the best and most famous Coffee company in the resigns they are
operating their business which makes them better as compare to the other. They are also
fulfilling their vision by providing the welcome to the customers at their shop. Their staff treat

the customers very well, and they are very humble with the people which create good value
among the people, and they are able to satiety their needs and their demands. According to the
Starbucks Corporation company their first priority is their customers, and they give their best
to provide the best possible services to them ti satisfy their demand and need. This shows that
their missions and mission are aligned with the demand at the market place.
The companies strategic capabilities
Starbucks Corporation is successful in their business, and they are top coffee sellers in
all around the world which show their strategies capabilities, but they are having some
weakness and the sources which provide them the competitive advantages
Weakness of the company
the weakness in the companies strategic capability is their process because of the
premium price strategies people who belong to the middle class and lower class family cannot
afford . Company should also launch the products which can also cover the people if the
middle and lower class people, and they can also enjoy the coffee in the Starbucks shop
(Karakaya, Yilmaz and Demiral., 2016). They should set the prices which can be affordable for
the those people.
Source of competitive advantages
The source of the competitive advantage of the company is their taste and popularity
among the people which attracts the people to but the Coffee from the Starbucks Corporation.
They do not need any promotion because people do their promotion themselves because of
the companies brand value and their taste make them talk about the Coffee.
Ashridge model
Goals
The goals of the company to provide the best coffee to their customers and they want to
extend the American coffee culture
Value
the create the value among the customers through the best possible services which
helps to satisfy the needs and demand of the customer
Behavioral norms
To provide the rights of the employees within the organization company has make the
polices which provide the benefits to the employees who are working in the company.

Strategy
Company is using the premium pricing strategies to achieve their goals and their target.
People are ready to take their coffee in the higher prices because of the quality and their test
which makes its special for the customers (Schawel and Billing., 2018).
TASK 4
Discussion on the strategies which company should follow to define their core business
There are two tools which can helps the Starbucks company to define their core business
are the Ans-off Matrix and Mintzberg
ANSOFF Matrix of Starbucks
Market penetration
Starbucks company is growing their sales of existing products in same market where
they are operating their business. For instance, This company is writing the name of their
customer on the coffee which is an unique idea. The intention of this is to increase sales as a
result of greater customer satisfaction.
Product development
companies development team is looking to introduce the new product to their customers,
so they can take the competitive advantages in the market where they are operating their
business (Serrat., 2018). They have developed the new coffee and the exclusive beans which
was an demand of their customers.
Market development
Company will launch their existing product in the new market, so they can gain the
competitive advantages in the market and they can expand their business in all over the world
and their target is to capture whole world. Starbucks company is growing sales by launching
existing products into new markets. Starbucks are a great example of this by having coffee
shops all over the world.
Diversification
Starbucks is launching new products into a new market, potentially increasing sales by a
significant amount. However, this is the most risky strategy. Starbucks the latest plans to launch
a new food range is a diversification strategy because the firm is using a new product to tap into
a new market for meals.
Mintzberg organizational model

Ideology
Ideology section covers the shared value, vision and culture of the Starbucks company.
To maintain the culture of the company they run the group activities to engage the employees.
Strategies Apex
` top management of the Starbucks company take the every decision of the company, and
they create the vision and mission of the company. They manage all the activities at the
workplace of the company (Yin., 2016).
Middle line
Supervisors of the company control the employees and day to day activities at the
Starbucks store and they helps to ensure the communication flow within the company train the
other employees provide customers satisfaction.
Techno-structure
Marketing and production team of the company run the main activities of the company .
Marketing team find the buyers and promote the company and the production team develop
the companies product.
Support staff
Finance department and the HRM department of the Starbucks company work as the
support staff for the company.
Operating core
provide the production and the operation. Employees are responsible to produce the
outcomes for the Starbucks company.
TASK 5

REFERENCESS
Books and journal
Ahmadi, M. R., Maleki, D. and Ahmadi, A., 2019. SMC-SPMV: A new strategic management
model for cloud computing based on SWOT/PESTEL multi view. African Journal of
Engineering Research.7(1). pp.17-32.
Bell, G. G. and Rochford, L., 2016. Rediscovering SWOT’s integrative nature: A new
understanding of an old framework. The International Journal of Management
Education.14(3). pp.310-326.
Bryson, J. M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.
Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic
thinking. Management Journal.1(1). pp.4-7.
Öz, Ö., 2019. The Competitive Advantage of Nations: the case of Turkey: assessing Porter's
framework for national advantage. Routledge.
Huikkola, T. and Kohtamäki, M., 2017. Solution providers’ strategic capabilities. Journal of
Business & Industrial Marketing.
Karakaya, A., Yilmaz, K. and Demiral, G., 2016. Strategic capabilities of retail market
managers: A field research in Karabuk. Procedia-Social and Behavioral Sciences.235.
pp.93-100.
Schawel, C. and Billing, F., 2018. Ansoff-Matrix. In Top 100 Management Tools (pp. 31-33).
Springer Gabler, Wiesbaden.
Serrat, O., 2018. Mintzberg's model of managing: Random thoughts from an
observation. Unpublished manuscript. The Chicago School of Professional Psychology.
Yin, N., 2016. Application of AHP-Ansoff matrix analysis in business diversification: The case
of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP Sciences.