Starbucks Strategic Analysis

Topics: Coffee, Starbucks, Coffeehouse Pages: 12 (3436 words) Published: September 19, 2012
Student Name:| Bethlehem H. Yerdaw|
Student ID number: | 000709239|
Course Code:| * BBUSI 1546 |
Title of Course:| Foundations of Scholarship|
Title of Assessment:| The Role of Culture in Business |
Type of Assessment| Essay *Reflective Report Group work report Other (Please specify __________________)| Tutor’s Name:| Taye Regassa|
Date Assessment Due:Turnitin report| ___ %|

Part One Introduction3
Part Two External Analysis4
2.1 Brief overview of the company4
2.2 Starbucks a global corporation5
2.3 Environmental opportunities and constraints on the company5
2.3 PESTEL Macro level analysis5
Political factors5
Economic factors6
Social factors6
2.4 Micro level analysis7
2.4.1 Industry life cycle analysis7
2.4.2 Porters five force analysis7
Treat from rival firms8
Treat of new Entrants8
Treat of Substitute products9
Bargaining power of Suppliers9
Bargaining power of Buyers10
Fig2.1 Competitive pressures of Starbucks industry10
3.1Internal analysis12
3.1 Starbucks Strategy12
3.2 The Ansoff matrix12
Physical recourses13
Core competence13
3.3 critical success factors (CSF’s)13
3.4 Corporate social responsibility strategy14
Fig. 3.1 Corporate social responsibility15
3.5 SWOT Analysis15
Product Portfolio:16
Part Three Conclusion and recommendation16

Part One Introduction
Based on ancient Ethiopian beliefs the history of coffee dates back to the thirteenth century when an Ethiopian Goatherd named Kaldi saw his goats being energized after chewing the berries from the coffee tree. Wikipedia reports that coffee spread from Ethiopia to Yemen, Egypt and by the 16th century it spread to Persia, Turkey, and the Middle East; later on it reached Italy and the rest of the world. Today, coffee is a vital beverage of the world with a daily consumption of more than 2.25 billion coffee cups mostly in the industrialized nations according to Wikipedia. The industry also accounts for a significant percent of employment in the world. Coffee is mainly cultivated by developing economies. The 21st century can be identified by increasing public romance with coffee and coffee shops.

This appraisal will begin with a brief company overview of Starbucks and the company’s status on the global economy will be identified. PESTEL analysis will be carried out to set the macro level industry features and industry life cycle and porters five force analysis will be undertaken for micro level industry factors and opportunities and treats will be identified. Secondly internal analysis of the company will be assessed using Ansoff expansion matrices, core competence will be identified and the company’s strength and weakness will be discussed. Finally conclusions will be drawn out and appropriate recommendations will be forwarded.

Part Two External Analysis

2.1 Brief overview of the company

The first Starbucks store opened in 1971 in Seattle USA, the store layout, the product offerings, the mission, and the objectives of the company were very different from the Starbucks we know today. Starbucks, then, a company established by three coffee aficionado partners offered Coffee, Tea, and Spice but did not offer coffee by the cup. Moreover according to Thomson and Shah in their Starbucks case study the company’s differentiating factor was high quality roasted whole bean coffee and build customer loyalty cup by cup through word of mouth as an advertisement strategy(Shah, A. Thompson, A., 2010).

In the spring of 1982 Howard Schultz, with a dream and vision of expanding the Starbucks store across the United States and Canada, joined the company with a job of heading marketing and overseeing the retail store. A year later when he went to Milan, Italy to attend...
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