Situational Analysis of Starbucks

Topics: Coffee, Starbucks, Dunkin' Donuts Pages: 48 (13213 words) Published: October 19, 2012
Strategic Analysis of Starbucks

Leo Dela Rosa

Strategic Management 4340

Dr. Uche Nwabueze

0. Executive Summary

The entirety of the executive summary encompasses all of what is discussed on the Strategic Analysis of Starbucks. It is discussed and dissected into two distinct parts, the external and internal analysis.

At first we discover the history of Starbucks and how influence grew into a huge success.

Then, upon the external analysis, we discover more on the coffee industry as a whole. We explore on how the roles of the General environment are dissected as the competing grounds for the coffee industry. Then, we delve into the driving forces and decipher what moves the rivals into competition. Upon the industry analysis, we move into the intricate details of market growth, market size and various industry trends. The next topic to be discussed is the Five Forces analysis and how this affects the industry. Finally we close with competition analysis, industry competitors; rivals anticipated strategic moves, and the key success factors.

The next part of the analysis is the internal analysis. Here we delve more into the realm of the company Starbucks. We start off with the organizational analysis’s corporate mission, products and services, leadership Organizational Culture, and Strategy. Next we analyze the firms resources by means of tangible & intangible resources, capabilities and core competencies. Then we move into the financials analysis which divides into subcategories such as valuation, growth, profitability, financial strength and management efficiency. The final aspect of the internal analysis is the SWOT analysis which clarifies Starbuck’s Strengths, Weaknesses, Opportunities and Threats.

The final closure of the Strategic Analysis is the recommendations for both internal and external analysis along with a conclusion.


The history of Starbucks starts in Seattle in 1971. (George, 2010) Three friends; Jerry Baldwin, Zev Sigel, and Gordon Bowker, who all had a passion for fresh coffee, opened a small shop and began selling fresh-roasted, gourmet, coffee beans and brewing and roasting accessories. (George, 2010) The company did well, but things began to change in the 80’s. (George, 2010)

In 1982 Baldwin hired Howard Schultz as the new head of marketing and shortly thereafter sent him to Milan to attend an international housewares show in Italy. (George, 2010) When he arrived, Schultz found himself infatuated wit the exciting coffee culture of Italy. (George, 2010) Schultz went to Verona and had his first caffe latte. But he observed something more important than the coffee. (George, 2010) The café patrons were chatig and otherwise enjoying themselves. (George, 2010) While sipping their coffees in the elegant surroundings. (George, 2010)

In 1983, Schultz describes that moment as an epiphany, as a gathering places like the great coffee house of Italy in the United States? (George, 2010) Could the Old World meet the New World? If it succeeded, it would be marketing genius. (George, 2010)

The owners of Starbucks Coffee Company decided to sell their coffee business, along with the name, to a group of local investors for $3.7 million. (George, 2010) Schultz raised the money by convincing investors of his vision that they could open 125 outlets in the next five years. (George, 2010)


As the progression of sales exceeds the coffee industry standards, Starbucks proves its momentum in growth. It was only as of 2008 where the company had to take some measures in bringing back Howard Schultz as the CEO from retirement. It was his decision to make some minor adjustments in making the company in shutting down at least 500 stores due to over saturation. However, this led to the gradual success that Starbucks...
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