MGMT1101: Starbucks Corporation Research and Analysis Report

This report provides a detailed analysis of Starbucks Corporation, examining its organizational structure, mission, core values, and strategic planning. The report explores Starbucks' customer base, including high-income individuals, technology adopters, and socially conscious consumers. It delves into corporate and business-level strategies, emphasizing differentiation and market penetration. A comprehensive SWOT analysis is conducted, identifying the company's strengths, such as its strong brand image and global supply chain, and weaknesses, like expensive products and imitable products. The analysis also highlights opportunities for expansion in developing markets and threats like competition and imitation. The report concludes with an overview of Starbucks' operational strategies and market position. It serves as a thorough overview of Starbucks' business model and its position within the coffee industry.

Running head: STARBUCKS RESEARCH AND ANALYSIS
STARBUCKS RESEARCH AND ANALYSIS
Name of the Student
Name of the University
Author Note

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Table of Contents
Summary of the organisation.....................................................................................................2
Customer base............................................................................................................................2
High income and high spenders.............................................................................................3
Technology adopters..............................................................................................................3
Socially aware and conscious people.....................................................................................3
Mission and core values.............................................................................................................3
Vision.........................................................................................................................................4
Corporate Level Strategies.........................................................................................................4
Business Level Strategy.............................................................................................................5
SWOT Analysis.........................................................................................................................6
Strengths.................................................................................................................................6
Weakness................................................................................................................................6
Opportunities..........................................................................................................................7
Threat.....................................................................................................................................7

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Summary of the organisation
Starbucks Corporation is an American coffeehouse chain and a coffee company. The
company was founded in the year, 1971 in Seattle Washington by Jerry Baldwin, Zev Siegl
and Gordon Bowker. The founders of the company had two things common among
themselves which was they all belonged from academic and all of them loved tea and coffee
which made them consider opening a company like Starbucks. They first opened their store
in Seattle and named the company after the first friend in the classic novel, Moby Dick by
Herman Melville (Starbucks Coffee Company., 2020). Since their inception, the company has
expanded their business massively and currently operates in more than 30,000 locations all
over the world. Starbucks has become a name in the retail coffee and snack store industry.
The company has changed the coffee industry as it does not only provide amazing and
different flavored coffee but also provides a sense of luxury to their customers. The
popularity and the high demand of the company has led the company generate revenue of
26.51 billion dollars (Statista., 2019). The company has not only garnered appreciation
among people because of their excellent products and services but also because of their
organizational culture which is high inclusive and diverse. This paper is going to shed a light
on the company, Starbuck Corporation and analyze their values, mission and goals, strategies
and also internal analysis of the company.
Customer base
Starbucks Corporation has successfully managed to revolutionize the concept of
coffee in order to influence the people to spend a significant amount of money so that they
can experience the luxurious setting and products. Though, Starbucks has expanded to

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various countries however, they have focused on a specific target of people and they are the
following:
High income and high spenders
They manly focus on affluent people who have a high income group and do not think
twice before making expenditure and thus majority of their coffee shops are established near
posh areas where the neighborhood is surrounded by people with middle to high income.
Technology adopters
The main target audience of the company is aged between 20 and 60. According to
scholars, majority of the people who like visiting Starbucks are teenagers and young adults
(Nan & Li, 2017). These people are technologically friendly and do most of their work online
and the company offers free Wi-Fi to their customers which attracts them to come and work
there while having a sip of coffee.
Socially aware and conscious people
The company commits to protect the earth and make a significant difference and thus
they highly comply with the green standards since the year, 1995. Farida & Ardyan, (2015)
states Starbucks believes in sustainable growing of coffee, they have opened support centers
for farmers, reduced the footprint of the company, used recycled cups and have also provided
opportunities to the employees in terms of their education which has helped the company in
making a positive change. Thus, the company is seen to have targeted people who are
concerned about the environment along with making a positive difference.

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Mission and core values
Starbucks is a company which does not celebrate coffee but also connection. The
company highlights their mission to nurture and inspire human spirit, one neighborhood, one
cup and one person at a time (Starbucks.com., 2020).
Starbucks have a set of core values which mainly puts emphasis on their coffee and
their customers. The company highly believes in building a culture of belonging and warmth
where there is no discrimination. Starbucks also believes in being highly ethical practices
where they strive to achieve the very best in what they do and believe in being accountable
for any consequences or results. The company also believes in growing in new ways along
with one another and focuses on high performance. They also believe in the connecting with
people with respect, transparency and dignity and treating their employees with humanity
(Starbucks.com., 2020).
The company highly believes in establishing a positive organizational culture and
operating in an ethical manner which help the company in creating a positive work culture
and also paves way for happy and motivated employees which results in the high quality
performance of the staff and the company.
Vision
The vision of Starbucks is to treat every individual like their family and be loyal
towards them and give the most of their capacity. The company highly believes in operating
in an ethical manner and creating a positive work culture by incorporating diversity and
inclusiveness in the workforce. Their vision is to become a coffee company cherished by
everyone and to become the top coffee companies all across the world in an ethical manner

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and satisfy their customers and also their employees to operate successfully. Thus, their
vision is to become a successful company in every term.
Corporate Level Strategies
The corporate level strategy of a business is basically the decision that usually affects
the entire organisation. According to scholars, the corporate level strategy of Starbucks is to
establish themselves as one of the leading sources of the best and finest coffee all across the
globe in an ethical manner and maintaining their values and principles while they grow. The
primary goal of the company is to provide the customers with high standard and quality
coffee while maintaining efficiency, a positive working environment, customer satisfaction as
well as diversity.
The working environment of the company is not only positive but is provided with
benefits. One of the biggest factor which has helped the company in gaining immense
appreciation and has helped in generating great revenues is their decisions made in the
company in terms of their policies, the CSR practices and implementation of ethics in their
operations which has helped in developing a cohesive and positive working environment
which helps in motivating the employees which paves way for employees delivering fruitful
performances and successful operations of the company.
Business Level Strategy
Business level strategy is basically the actions that are taken so that one can give
value to the customers and also gain a competitive advantage in the market by exploring
various core competencies. It has been seen that Starbucks highly focuses on their growth and
mainly incorporates several growth strategies. Starbucks uses a differentiation strategy as one
of their main goals is to be different and gain a competitive advantage in the market. Thus,

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they always try to come up with high quality products and services so that they can be
different from other companies and have leverage.
Starbucks uses market penetration as their growth strategy as they believe in
expanding their business in different countries so that they can maximize the revenue of their
business in comparison to other markets. Geereddy, (2013) state the company has presence in
about 65 countries all across the globe.
Starbucks also uses product development as their growth strategy so that they can
generate more profits in the business. Starbucks is seen to innovate new products which are
unique and different from other coffee companies not only in terms of their taste but also
presentation. These corporate level strategies have helped the company in gaining a
competitive advantage in their market as well as become one of the most successful
companies in the business.
SWOT Analysis
The SWOT analysis of Starbucks is the following:
Strengths
Starbucks has made a name for themselves and has become very popular because of
their strengths which is a strong and positive brand image, global supply chain and their
diversification through the subsidiaries. The company has many loyal customers because of
the impeccable service it provides to their customers and thus they always choose Starbucks
over any other coffee companies. According to scholars, one of the major factors that has
helped the company to generate huge amounts of profit is their expansion strategy (Chuang,
2019). The presence of the company in about 65 countries is one of the biggest strengths not
only in terms of revenue but also in terms of awareness of the brand. The company slowly

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diversifies their business in various ways like through the development of their subsidiaries
like Teavana or Ethos Water and through acquisition which helps in minimizing the industry
risks.
Weakness
Starbucks somehow has some weaknesses which often has a huge impact on the
companies and reduces the capabilities of the business. One of the major weaknesses of the
company is their expensive products which maximized the margins in terms of profit
however reduces the affordability. Thus, many people restrict themselves from choosing
Starbucks. According to scholars, when products can be imitable then it automatically loses
its value which is detrimental to the business of a company (Dimitrova, Smith & Andras,
2017). The products of Starbucks are imitable and there are many competitors who are trying
to come up with the same products at a lower rate which is a huge weakness for the company.
Thus, Starbucks should come up with products that are unique to gain a competitive
advantage over the market.
Opportunities
Starbucks has various opportunities which can help the company grow in the market.
One of the opportunities the company has is to expand their business in the developing
markets. The company has presence in countries all across the world however, should focus
on the first world countries who have the capacity to afford expensive coffees and like
luxurious lifestyles. The other opportunity of the business is that they can develop their
diversity strategies which can help in improving the long term stability of Starbucks in the
long run. The higher diversification will help Starbucks to reduce their dependence on the
current industries and help in the overall growth opportunities especially in terms of revenue.

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Threat
Starbucks can face threats in the business which can have a huge impact on the
business of the company which is huge amount of competition and imitation of their
products. There are many coffee joints that are launching and providing coffee at a more
reasonable price which is attracting many customers. The imitation of Starbucks coffee is
another issue which is a huge threat for the company as this makes the company lose their
value which can have detrimental effects on the business and make people choose other
coffee joints.
Reference
Chuang, H. J. (2019). Starbucks in the World. HOLISTICA–Journal of Business and Public
Administration, 10(3), 99-110.
Dimitrova, B., Smith, B., & Andras, T. (2017). Brand value co-creation via the platform
enterprise.
Farida, N., & Ardyan, E. (2015). Repeat purchase intention of Starbucks consumers in
Indonesia: A green brand approach. Market-Tržište, 27(2), 189-202.
Geereddy, N. (2013). Strategic analysis of Starbucks corporation. Harward [Електронний
ресурс].–Режим доступу: http://scholar. harvard.
edu/files/nithingeereddy/files/starbucks_ case_analysis. pdf.
Nan, Y., & Li, X. (2017, April). Analysis of the Importance of Enterprise Culture on
Consumer Behavior-------An Example of Starbucks. In 7th International Conference
on Education, Management, Information and Mechanical Engineering (EMIM 2017).
Atlantis Press.
Starbucks Coffee Company. (2020). Company Information. Retrieved 28 February 2020,
from https://www.starbucks.com/about-us/company-information

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Starbucks.com. (2020). Culture and Values: Starbucks Coffee Company. Retrieved 28
February 2020, from https://www.starbucks.com/careers/working-at-starbucks/culture-and-
values
Statista. (2019). Starbucks: revenue 2018 | Statista. Retrieved 28 February 2020, from
https://www.statista.com/statistics/266466/net-revenue-of-the-starbucks-corporation-
worldwide/

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