Unit 32: Business Strategy Report on Starbucks Analysis

This report provides a comprehensive analysis of Starbucks' business strategy, evaluating the impact of the macro environment, including political, economic, social, technological, legal, and environmental factors. It assesses the internal environment using frameworks such as the VRIO model and SWOT analysis to determine strengths, weaknesses, opportunities, and threats. The report also explores strategic planning models, including the Ansoff growth matrix and Porter's generic strategies, to understand how Starbucks aims to achieve a competitive advantage. The analysis covers various aspects, from product and pricing strategies to place and promotion, and concludes with recommendations for strategic development to increase organizational profit, considering factors like Brexit and customer engagement. This report is a valuable resource for understanding Starbucks' strategic approach to the market.

UNIT 32 – BUSINESS
STRATEGY

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO 1.................................................................................................................................................3
Impact and influence of macro environment in an organization.................................................3
LO 2.................................................................................................................................................5
Assess the internal environment..................................................................................................5
LO 3.................................................................................................................................................7
(LO3 has been covered in PPT)...................................................................................................7
LO 4.................................................................................................................................................7
Theories and models for strategic planning.................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy are selected by organizations so that there is going to be effective and
efficient working which is going to be present to be able to achieve the goals and targets which
are present in the market. There is also going to be a better sense of direction making the
company is able to maintain their reputation and standards. Starbucks is a public belonging from
coffee shop industry and has its headquarters in Washington. The report discusses the internal
and external factors as to how they impact the company. To make right decisions there is a lot of
analyses of measures and strategies and well which the company uses and would be discussed
further.
MAIN BODY
LO 1
Impact and influence of macro environment in an organization
It is essential for businesses in the market to analyse the internal and external factors in
order to make the right decisions and also plan accordingly. There is going to be a lot of
influence of the management and a stakeholder who also needs to be considered in the company
so that there is going to be right functioning. The follow report is going to discuss the external
factors of Starbucks which are having a great influence on the decisions making of the
organization (Yucel, 2018).
 Political Factors
There is a stability which is present in the country therefore the company is being able to
operate effectively in the market but not many changes which are required. The company is
having a strong portfolio as well which is going to help the company be able to expand them
effectively and operate effectively (Cardoni, Kiseleva and Lombardi, 2020). Transparency is
provided by the company for the workforce and customers making the company have loyalty of
them and higher market share in the market. The company is not being able to have control on
the corruption level which is a great drawback for the company in the market.

 Economic Factors
The lifestyle of the people is changing therefore they prefer Starbucks with good interiors
and exteriors for the customers. The unemployment rate are decreasing as well as the GDP
improving in the country can make the organization have more economic factor in their favour.
To be able to have the right improvement in the company there is a lot of investment and
planning for the strategies as well which the company will have to decide which is going to make
the company have more customers.
 Social Factors
The company is having high profitability in the market which is a great factor because the
company is being able to satisfy the needs and demands of the customers on time. There is no
discrimination for the employees or customers which is present making the working environment
very healthy for a long run in the market. The trends and expectations of the customers are being
adapted to very quickly in the market which is a great factor for the company. There is a fair
treatment which is present for all the employees so that all feel motivated and accepted in the
company which is going to make the profitability and productivity higher of the company to be
able to compete effectively and efficiently.
 Technological Factors
There are a lot of technological changes which are coming in the company which is going to
make the company adapt to them effectively. This is going to make the quality of the products
and service remains constant which is good for the reputation and standards of the company as
well (Mohelska and Sokolova, 2016). The productivity and operations is going to be higher
matching the expectations and demands of customers. There are going to be lesser errors in the
working and pressure from the employees is going to reduce making the value of the company
also increase.
 Legal Factors
The company has to provide the employees with personal and professional time and balance
in life which is the right of the employees. There are a lot of policies which the government has
taken out for the employees and customers which have to be followed resulting in higher
reputation and standards of the company. There has to be good transparency which needs to be

present and also motivation for the employees which is good wages have to be provided so that
there is going to be higher involvement of them in Starbucks.
 Environmental Factors
The company has taken care of disposal wastage which the company is having which is
going to be good for the portfolio and reputation of the company. The environment has to be
worked upon so that there is going to be good transportation of products and raw material on
time as well (Cagnin, 2018). Zero carbon footprints are also taken by the company so that there
is going to effective functioning as well.
Ansoff growth matrix
The company is going to be using diversification strategy in order to be able to expand
and also make the portfolio of the company be improved. This is going to be risky for the
company but due to a lot of experience in the market the organization will be able to take this
measure and attract more customers.
LO 2
Assess the internal environment
There are a lot of valuable resources which are being used in the company and they have
to use the right framework so that the competitive advantage can be maintained. Making the right
decisions is also going to make the productivity and operations of the organization be improved
which is a great factor for the organization. Starbucks is using this framework from a long which
is going to be discussed in the further report as well so that the company can be understood well.
Resources Valuable Rare Inimitable Organization
Capital  
Intellectual property   
Human Resource  
Technology    

 Valuable
Quality and standards of the products and services of Starbucks is being well maintained in
the company by motivating the workforce and also the technological factors which are coming in
the market. Company focuses on both so that the company will be able to have higher
opportunities in the market. Value for resources is important and resources like technology,
capital, human resources and intellectual property are very important for Starbucks for a long run
in the market.
 Rare
There are a lot of changes and improvement which Starbucks has taken so that there is a
better raw material which is coming in the company so that there is going to be long run and
smooth functioning of the company in the market. There are a lot of flavours which the company
has got in the market making the profitability margins of the company increase (Arieftiara,
Utama and Wardhani, 2017). The employees are trained and developed so that the company can
have the right skills and knowledge of the market which is going to help the company be able to
function effectively.
 Inimitable
The products and services of Starbucks are imitable in nature and they need to have more
patents and copyrights which the company will have to take in order to maintain the standards
and loyalty of the customers in the company. The services and products of the company are high
and the pricing is also done higher than the competitors which is making limitations but loyalty
of the customers is also present.
 Organization
To have a better sense of direction the company is having the right measures and strategies
which are being used in the organization. It is important for Starbucks to be able to achieve all
the objectives and goals so that there is going to be higher profitability. There is a high
competition which is Coffee Café Day has taken the loyal customers and market shares from the
company which is a great loss (Sarjana and Khayati, 2019). The company will have to get in
better ideas and more planning needs to be done by Starbucks to be able to operate effectively in
the market.

SWOT
 Strength
Due to experience the company has been able to make the right decisions and gain
competitive advantage (Mahmood, Chung and Mitchell, 2017). Right decisions and measures are
important for Starbucks in order to be able to function effectively and efficiently due to rise in
competition.
 Weaknesses
The workforce of Starbucks is not well motivated therefore getting in the changes in
Starbucks takes a lot of time.
 Threats
There are a lot of loyal customers which the company has lost due to the competitors in the
market and that is impacting on the profit margins of the company.
 Opportunities
Strong portfolio is going to help the company be able to gain a lot of competitive advantage
and expand themselves in developing countries as well (Weinrich, 2017).
Benchmarking
There is training and development which is going to be provided to the employees but
they have to be monitored and controlled in the company. This is going to help Starbucks to be
able to get in the changes effectively and according to the workforce.
LO 3
(LO3 has been covered in PPT)
LO 4
Theories and models for strategic planning
Organizations have to improvise their working in such a way that they are able to achieve
high competitive edge over other market competition by which it is able to achieve high
competitive edge (Wolf and Floyd, 2017). Porter’s generic strategy model is used to analyze
company strategy and following is the port’s five strategy for Starbucks.

Cost leadership will be beneficial for Starbucks because in this organizational expenditures are
reduces and high profit margins are achieved, this is important because company is having high
geographic reach, therefore by this it will be able to achieve high profit.
Hybrid strategy-
Action plan
Aim- The aim of this strategic development is to increase organizational profit in minimum
expenditures.
Objective- Increase organizational sales by 5% in 2 years
Product-
Starbucks is well established for its products and because of which only company has
managed to enter new market with its existing products due to which high organizational profits
has been achieved (George, Walker and Monster, 2019). But in the present time when
customer’s purchasing is limited then organization must introduce new products as per customer
requirements, through this company will be able to increase customer’s engagement in
organization.
Price-
Company has established high pricing due to which it is able to achieve high
organizational profits but also at the same time it also has stopped it from reaching wide range of
customers and due to which its sales are limited. In the present time, when organizational
customers have lost their jobs due to which company must implement competitive pricing to gain
high sales.
Place
Company is able to provide its products all across the globe but due to the events of
Brexit organization’s reach in various sectors is limited due to which it has to pay taxes in the
areas which were freely available before Brexit. Thus company must increase its engagement in
selling its products through the means of online selling, by this Starbucks will be able to improve
its performance on ground level.
Promotion

Customer are increasing their engagement in social media utilization and due to which
organization must also advertise itself through the means of internet by which it will be able to
increase brand awareness by which high organizational sales can be achieved (Amrollahi and
Rowlands, 2018). This social media marketing is must be implemented by Starbucks because it
is cost efficient and also at the same time must effective than traditional marketing.
CONCLUSION
From the above analysis it can be concluded that organizations like Starbucks are the
group of individuals with their specific and unique skill sets, through which it is able to improve
its working in such a way that it is able to achieve its organizational targets. But still in order to
maintain an efficient coordination among departments, company has to develop organizational
working strategy through which it is able to increase the chances of goal achievement.
Organizational strategies are directly affected by the external organizational environment
because company has to change the working in such a way that it is able to improve its
performance in front of customers by which it will be able to achieve its organizational goals.

REFERENCES
Books and Journals
Amrollahi, A. and Rowlands, B., 2018. OSPM: a design methodology for open strategic
planning. Information & Management. 55(6). pp.667-685.
Arieftiara, D., Utama, S. and Wardhani, R., 2017. Environmental uncertainty as a contingent
factor of business strategy decisions: Introducing an alternative measure of
uncertainty. Australasian Accounting, Business and Finance Journal. 11(4). pp.116-
130.
Cagnin, C., 2018. Developing a transformative business strategy through the combination of
design thinking and futures literacy. Technology Analysis & Strategic
Management. 30(5). pp.524-539.
Cardoni, A., Kiseleva, E. and Lombardi, R., 2020. A sustainable governance model to prevent
corporate corruption: Integrating anticorruption practices, corporate strategy and
business processes. Business Strategy and the Environment. 29(3). pp.1173-1185.
George, B., Walker, R.M. and Monster, J., 2019. Does Strategic Planning Improve
Organizational Performance? A Meta‐Analysis. Public Administration Review. 79(6).
pp.810-819.
Mahmood, I., Chung, C.N. and Mitchell, W., 2017. Political connections and business strategy in
dynamic environments: How types and destinations of political ties affect business
diversification in closed and open political economic contexts. Global Strategy
Journal. 7(4). pp.375-399.
Mohelska, H. and Sokolova, M., 2016. Smart, connected products change a company’s business
strategy orientation. Applied economics. 48(47). pp.4502-4509.
Sarjana, S. and Khayati, N., 2019, September. Effective Business Strategy: Key to Winning
Business Competition in Industrial Estate. In International Conference on Trade 2019
(ICOT 2019). Atlantis Press.
Weinrich, T., 2017. Reviewing organizational design components for digital business
strategy. BLED.
Wolf, C. and Floyd, S.W., 2017. Strategic planning research: Toward a theory-driven
agenda. Journal of Management. 43(6). pp.1754-1788.
Yucel, S., 2018, December. Modeling digital business strategy. In 2018 International Conference
on Computational Science and Computational Intelligence (CSCI) (pp. 209-214). IEEE.