Strategic Management Analysis of Starbucks Coffee Company Assignment Sample

Strategic Management Assignment Sample

Introduction of Strategic Management Analysis of Starbucks Coffee Company

The object of this assessment is to identify the strategies and their management within the Starbucks. The journey of the Starbucks form a small coffee shop to a leading coffee retailer in world is quiet interesting and the reason behind this achievement is related to its strategic management(Hill,Jones and Schilling,2014). This report includes a brief presentation of the Starbucks, its products and services, Vision and mission etc. The various theories and approaches are applied to analyse the company's business environment within which it operates its business operations. Furthermore, the report will provide the strategic implication of the analysis.

TASK 1 : Presentation of the Starbucks.

1. Introduction of the Starbucks, their products, services and market.

The Starbucks coffee was started in the year 1971, its headquarter is situated in the Seattle, Washington. The company was started with only one small coffee shop and is currently the top most coffee brand and retail company across the world. The Starbuck's objective and goal is to be the leading retailer and brand to sell the best coffee and relevant goods in a global market. The company focuses on the global market, which includes almost all countries in the world. It has a wide market share all over the globe. The Organisation has around 15000 stores in 50 different states within the UK. It also operates more than 1000 stores in 45 different countries all over the world. It also supplies the products to various channels like supermarkets etc(Peppard and Ward,2016).

The Starbucks serves a huge variety of products, which includes different food items, beverages and non food products as well. The products of the Starbucks are Sandwiches, Brewed coffee, Mugs, pastries, coffee-makers etc. The company focuses on providing quality products to their customers with the best services in the market. The Starbucks has unique quality products which creates a niche market. The brewed coffee has no substitutes within the market. The company purchases the coffee bean and process it to make quality food items and beverages.

2. The mission, vision, strategic goals and objectives of the Starbucks.

Few years back the Starbucks had a mission statement, “To become the most respected and popular brand in the world and establish itself as a national company with guiding principles and values that the employees could be proud of” This statement was not much effective and reliable. Becoming the most respected and recognised brand is not an achievable objective, but the statement also state to become an organisation with values which can be trusted. Therefore, the company decided to modify and change its vision and mission statement, “To inspire and raise the human spirit – One person, one cup and one neighbourhood at a time”. The new statement of the company reflects the focus on its customers. The statement has two parts one is the human spirit and the second is the oneness, The drawback of this statement is that it do not include the markets or employees. Despite of the mission statements the Starbucks has clear targets and objectives to become the leading brand of coffee and its retailing in the world or global market. The objectives determine that the company wants to stand at the first or top most position in the market.

The organisation's mission depends upon the quality of services and products it provides. The Starbucks coffee company ensure that the quality of their products stay unique and unbeatable, which is helping them to lead the competition within the market. The company focuses on the quality and services to attract the customers so that it can hold the position it has in the market(Aguinis and Edwards and Bradley,2016).

P3 Consistency towards the purpose and vision.

The Starbucks vision and purpose is to be at the top position in the coffee retailing and brand and it has successfully achieved this target since years. The consistency of leading the industry is obtained by the promising quality and services to the customers. The Starbucks is always improving their products and services which helped them to build a trust among the customers. This helped the company to sustain the vision and purpose since years.

P4 Importance of leadership and stakeholders in strategy formulation and implementation.

The leadership and the stakeholders has an important role in the development and implication of the organisational strategies. They are the medium which connects the business vision with the strategic management. The leadership and stakeholders provides the roles, values and vision to the organisation according to which the management formulate the plans and strategies and further implement them within the organisation. The Leaders and stakeholders provides a thinking and ideas to the employees or organisation which determine and identifies what are the objectives and goals of the business and its operations. The strategic management analyse these targets and makes appropriate strategies to obtain the goals. Therefore, the leadership and shareholders are the important element for the formulation and implementation of the organisational strategies and plans.

P5 The significance of ethics in the Starbucks coffee company for the formulation of strategic plan.

“Being good is a good business”, it is important for any business or organisation to focus on the social and corporate responsibilities. The organisation should adopt good and healthy business practices by following the business ethics, moral values and good organisational behaviour. The Starbucks is a company which has build a positive brand image in the global market and among the customers, it helped them to build trust and loyalty. The ethics of the company is to ensure the quality of the products and services provided to the customers are the best as well as satisfying, it can promote the business by attracting more and more customers. The good behaviour and the business ethics can help the organisation to hire talented employees and increase the productivity. The Starbucks also focus on the social and cooperative responsibilities which helps them to attract new partners and sponsors within the market. The polite and effective services of the company enable their customers to spend quality time with friends and family in a positive environment. Even the employees of the Starbucks are treated with respect and dignity.

TASK 2 : Internal and External environmental analysis.

P6 PESTLE analysis on the Starbucks

There are various internals as well as external factors which affect an organisation and its operations. The PESTLE analysis refers to Political, economical, socio- cultural, technological, legal and environmental factors affecting an organisation and its operations.

• Political – The Starbucks organisation faces major issues and problems in sourcing of the resources or raw materials. The organisation needs to follow various laws and regulations while sourcing the resources, The government has fluctuating policies and laws for the business organisations that each and every company needs to follow strictly(Gans and Ryall,2017).
• Economic – The major factor which is affecting the Starbucks if the economic changes in the market, the inflation and deflation within the economy has a lot of impact on the business operations and the cash flow. Economical factors also enforces changes in the prices of the products.
• Socio- cultural – Starbucks also faces various socio-cultural issues within the business organisation. The company needs to take care of various cultural factors while performing the business operation. They need to take care of the social elements without degrading the quality of the products and services.
• Technological – The Starbucks adapt the technological changes in the environment very effectively, they recently launched up a discount based app with the Apple. There are major developments and changes in the technology in today's world. There are various techniques which are introduced in the market such as mobile banking or mobile payments, online trading etc. The Starbucks is trying to adapt these changes effectively to improve and develop their business according to the current needs in the market.
• Legal – Starbucks needs to make sure that it does not break any law or regulation imposed by the government. The business operations must be performed considering the laws and regulations for the smooth flow of the organisation(Hahn,2013).
• Environmental – There are various environmental changes which can affect the business operations within the Starbucks. The natural factors such as climatic changes, natural hazards etc can become a barrier in the organisation's performance. The environmental changes can be internal as well as external that needs to be considered in order to serve the customers in the best possible way.

P7 Porter's five forces framework within the Starbucks coffee company.

The Starbucks company get influenced by the five different forces according to the Porter's theory or model. The company is getting affected by the five forces in various levels of intensity or strength. The five forces affecting the Starbucks are as follows -

• Competitive rivalry – The Starbucks often faces a powerful force of competition. This force describes the impact of various competitors or rivals on each other. In context to the Starbucks coffee there are many external elements which are leading to the strong force of the competition such as -

1. Low switching cost
2. Variety of organisations
3. Huge number of businesses

• Bargaining power – The bargaining power of the customers or buyers has a huge impact on the Starbucks coffee company. There are many substitutes or alternatives of the company within the market such as Mc Donald, restaurants etc. People can shift to the other brand or product instantly, due to this the Starbucks needs to be very effective in holding their customers to choose their products and services.
• Bargaining power of the Suppliers – Although this force does not have a strong impact on the Starbucks coffee company as they have variety of suppliers and supply chains. The suppliers can increase or decrease the cost of the raw materials which can have an impact on an organisation if it does not have any other alternative.
• Threats of substitution – This force describes the effect of the alternative or substitute products within the market. For example the Starbucks coffee has many substitutes like Dunkin Donuts which can create a tough competition in the industry. The Starbucks needs to maintain effective prices and quality of their products to avoid this force.
• Threat from the new comers – The Starbucks have a major threat from the new entrants in the market. The business firms entering the market can bring an innovative and creative tool in-order to attract customers. Therefore, it is a strong force that can have a major impact on the Starbucks business and customers.

P8 The VRINE model in context to the Starbucks and ways to achieve competitive advantage and improved performance

The VRINE model describes nature of the resources within an organisation. The Starbucks has a variety of resources which they use in-order to produce quality products for their customers(Wheelen and Hunger,2017). The resources are analysed by the VRINE model to determine the various benefits and the nature they have in the respect to the Starbucks. These resources also asist the company to obtain competitive advantages within the market or business environment . The VRINE model can be described as below -

• Valuable – This element determine if the resources within the Starbucks are valuable or not. Do they have ability to help the organisation in meeting the demand in the market. If the resources within the Starbucks are valuable, the company can effectively compete with the rivals in the market. The Valuable resources help an organisation to improve the performance and achieve the objectives.
• Rarity – The other element or nature of the resources is the rarity. The resources within the Starbucks needs to be rare or unique so that can bring something new and innovative in the market. This can help the organisation to stand out and monopolistic business in the market.
• Non-substitutable – The Starbucks should ensure that they have those types of resources which are no substitutable or which can not be imitated. The company can have the benefits of these resources as they are unique and the competitors can not copy or imitate these resources to produce a same product.
• Exploitable – The resources of the organisation needs to ensure that they can utilise a resource through which they can generate some profit.

TASK 3

P9 Strategic implication analysis

The Starbucks coffee company needs to make sure that their maintaining a competitive advantage with their unique services and products in the market. The generic strategies can be implemented to sustain a differentiation within the market(Rothaermel,2015). The various strategies like innovation,, new product launching, price modification etc. These strategies can help the organisation to sustain in the market with the leading position. The analysis identifies various factors which are affecting the Starbucks, these factors should be considered in the development of strategies within the market. The organisation should take care of the political, cultural, economical and other factors while performing the business organisation. New products and effective pricing can be the best ways to avoid the substitution or alternatives of their products and services.

P10 Future strategies for the Starbucks for achieving the leading position.

The Starbucks needs to focus on introducing some new products in the market, or they can make some changes or innovation within the existing products. The Starbucks must provide more options to their customers. The varieties of products with different prices can encourage an individual to choose a particular bran or product. Currently, people assumes that the Starbucks is a premium bran and is above their budget. This assumption should be removed from the mind of people. The competition is growing day by day as new entrants are trying to compete, at this stage the organisation needs to make some serious changes in the products and their price to keep a hold on their customers. The various elements they need to focus on are follows -

• Products
• Price
• Quality
• Services

CONCLUSION

The Starbucks needs to focus on the various factors which are affecting their business operations. The organisation needs to introduce some new kinds of products and with a effective price in-order to sustain in the competitive market. The growing competition in the market is a threat for the Starbucks, there are many substitutes which are entering into the market. The report concluded that the strategic management is very essential for every organisation to identify the elements that affect the business and the way they can be avoided or turned into something positive. The report includes various model and theories like PESTLE and VRINE analysis which determines the factors affecting the operations within the Starbucks.

References

Books and Journals

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014.  Strategic management: theory: an integrated approach. Cengage Learning.

Peppard, J. and Ward, J., 2016.  The strategic management of information systems: Building a digital strategy. John Wiley & Sons.

Wheelen, T.L. and Hunger, J.D., 2017.  Strategic management and business policy. pearson.

Rothaermel, F.T., 2015.  Strategic management. McGraw-Hill Education.

Gans, J. and Ryall, M.D., 2017. Value capture theory: A strategic management review.  Strategic Management Journal,  38(1), pp.17-41.

Aguinis, H., Edwards, J.R. and Bradley, K.J., 2016. Improving our understanding of moderation and mediation in strategic management research.  Organizational Research Methods, p.1094428115627498.

Hahn, R., 2013. ISO 26000 and the standardization of strategic management processes for sustainability and corporate social responsibility.  Business Strategy and the Environment,  22(7), pp.442-455.