Starbucks Case Study: Situation Analysis and Recommendations

This case study provides a comprehensive analysis of Starbucks Corporation, examining its strengths, weaknesses, opportunities, and threats (SWOT), as well as its political, economic, social, technological, legal, and environmental factors (PESTLE). The analysis delves into the company's competitive landscape, service blueprint, and the design and delivery of its services. It highlights key insights, identifies critical issues and potential opportunities for Starbucks, and offers strategic recommendations based on a combination of qualitative and quantitative evaluations. The study references several academic sources to support the analysis. The study is designed to provide a deep understanding of Starbucks's business strategy and performance within its industry. The assignment is available on Desklib, a platform that offers valuable resources for students, including past papers and solved assignments to aid in their studies.

Running head: CASE ANALYSIS: STARBUCKS 1
Case Analysis: Starbucks
Name
Institution

CASE ANALYSIS: STARBUCKS 2
Case Analysis: Starbucks
Starbucks Corporation’s SWOT Analysis
From the information given in the case study, it has been found out that Starbucks
Corporation has many strengths, weaknesses, opportunities and threats that have been shaping its
development.
Strengths
The case study reveals that the adoption of technology is one of the major strengths of the
company. It has embraced the use of automatic espressos which has, of course enabled it to
automate its service-delivery process. The other strength is that Starbucks has a strong supply
chain and a good brand in the market (Vanharanta, Kantola & Seikola, 2015). The kind of
collaboration that the company has established with its partners has made it to extend its
operations to different locations in different countries including the USA, Canada, just to
mention, but a few (Lemus, von Feigenblatt, Orta & Rivero, 2015).
Weaknesses
However, despite all these strengths, there are some weaknesses that the case scenario
reveals about this great coffee multinational. In the first place, Starbucks does not have a strong
marketing strategy. Its poor marketing initiatives have made it to damage its brand image. It has
failed to engage in useful activities such as product differentiation (Glowik, 2017). This has
hindered effective selling of the products.
Opportunities

CASE ANALYSIS: STARBUCKS 3
The case scenario revealed that Starbucks has some opportunities that it needs to explore
if at all it is concerned about its prosperity. First and foremost, the corporation has to take
advantage of the emerging markets and exploit them further. In addition, the corporation still has
opportunities in production (Mason, Cole & Goza, 2017). It can further diversify its products to
ensure that it meets the needs of different segments of the market. It should capture the youthful
generations by producing a special kind of product that can appeal to them. Lastly, the
corporation still has opportunities to embrace the application of modern technologies in its
production process.
Threats
Nonetheless, the corporation has some threats. These include stiff competition in the
market. The competition has been coming from other companies such as Dunkin Donuts, Peet’s
Coffee & Tea, and Caribou Coffee. These companies pose a stiff competition because they are
established brands which manufacture substitute products. They have been in operation for quite
some time, have certain attributes and strengths that make them to enjoy a competitive advantage
and claim a substantial share of the market.
For Starbucks to strategically-position itself and enjoy a competitive advantage over its
rivals in the market, it have a suitable service blue print. Although there is a stiff competition in
the market, the company should capitalize on all its strengths. At the same time, it should
overcome all its weaknesses and address the threats that make it challenging for it to penetrate te
market and accomplish its goals.
Starbucks Corporation’s PESTLE Analysis

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PESTLE analysis is an abbreviation for the analysis that is used to study an
organization’s political, technological, environmental, economic, social, and legal external
environment in which it operates.
Political Forces
Politics either positively or negatively influences the organization depending on how it is.
Whereas favorable political climate favor progress, unfavorable one hinders businesses. For
example, in the USA and Canada, the company can only smoothly operate if the political climate
is favorable. However, if, for instance, the company operates in a war-torn nation like Syria or
Yemen, it might not operate well because of constant interruptions.
Economic Forces
Economic factors also play a significant role in shaping the performance of Starbucks.
The income levels and purchasing power of the clients determine the selling capacity,
performance, and profitability of the company (Lakshminarayanan, Maggio & Best, 2017). If the
clients have high income levels, they might purchase more and enable the company to make
more profit. However, if the clients have low income their purchasing power might be low.
Social Forces
Social factors also contribute because issues like culture, superstitions, beliefs, and values
determine the responses of the clients and dictate whether they consume Starbucks’ coffee or
not. Culture can dictate clients and influence them either to buy or not to buy coffee products
sold by the company. For example, if people believe in certain cultural traditions that condemn
coffee and regard it as useless or harmful, they might not buy it.

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Technological Forces
Technology also counts because it determines the quality of productivity and the response
of the company’s clients. Use of modern innovations such as automated espressos has not only
enabled the corporation to automate its service-delivery, but also to improve quality and sales.
Legal Forces
Legal forces also count because all the corporation’s activities are directly influenced by
the legislations, policies, and laws given by the government (Chandler, 2017). For the Starbucks
Company to succeed in any jurisdiction, it must abide by all the business laws given by the local,
state, and national governments where the company operates. Each country has unique laws that
must be followed no matter how stringent they might be.
Environmental Forces
Environmental factors must also be considered because, for Starbucks to operate
smoothly, the company must abide by all the environmental protection standards at all times
(Lemus, von Feigenblatt, Orta & Rivero, 2015). It should never engage in harmful acts such as
release of smokes, untreated sewerage, land, water, and noise pollution.

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References
Chandler, E. (2017). Reflections on Cripping the Arts in Canada. Art Journal, 76(3-4), 56-59.
Glowik, M. (2017). 4.7 Case study: Starbucks. Global Strategy in the Service Industries:
Dynamics, Analysis, Growth, 156.
Lakshminarayanan, S., Maggio, E., & Best, S. (2017). Kofi or Coffee-Starbucks Enters the
Indian Market. Journal of Case Studies, 35(2), 44-55.
Lemus, E., von Feigenblatt, O. F., Orta, M., & Rivero, O. (2015). Starbucks Corporation:
Leading Innovation in the 21st Century. Journal of Alternative Perspectives in the Social
Sciences, 7(1), 23-38.
Mason, A., Cole, T., & Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE
MANAGEMENT IN THE COFFEE INDUSTRY. Journal of International Management
Studies, 17(1).
Vanharanta, H., Kantola, J., & Seikola, S. (2015). Customers’ conscious experience in a coffee
shop. Procedia Manufacturing, 3, 618-625.