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
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As explained via the financial analysis excel chart, we see that the natural progression of Starbucks is also in the current ratio. This defines the overall financial progressive movement of Starbucks. Current Ratio is defined by the success that is generated from the sales department.
The current ratio defines from $0.79 (10/06) to $1.55 (10/10) and 1.74 (1/11) that cash situation is very strong. Simply put, it states that for every dollar that is owed, went from $0.79 out of efficient funds (Oct 06) to now at $1.74 (Jan. 11). This proves that Starbucks has a very strong financial growth that is fuelled by the sales growth for the "sales 5 yr growth" financial snapshot. In comparison to the coffee industry today, Starbucks proves that their Current Ratio exceeds the industry standards.
This is only a minor snapshot of how Starbucks has progressed in terms financially.
2.2.0 Purpose of this Study
The purpose of this study is to convey and compare the information of the external analysis, and the internal analysis of the coffee industry. Once both sets of analysis (internal & external) has been successfully analyzed, we then reach conclusions by means of internal and external recommendations.
0. External Analysis
The study of the external analysis in the coffee industry, is the study of its macroenvironment. This includes the
External Environmental Analysis of Starbucks and the Coffee Industry Harold Brown Strategic Management March 3, 2011
Costa Rica now provided raw material for Starbucks which accounted for about 15 percent of the total coffee beans Starbucks needed every year. Costa Rica as one of the raw material suppliers plays an important role in global value chain. Coffee has played a pivotal role in the development of Costa Rica. It has shaped social, cultural and political institutions and is still one of country’s major agricultural exports. (Anywhere, 2016) The global value chain in this coffee industry can be described that Starbucks, the centre in this coffee global value chain, purchasing raw materials (coffee beans) from coffee farms in Costa Rica, reprocessing and reproducing in retail shops, selling the finished products (various kinds of coffee) to customers in the world.
In this technique, internal strengths and weaknesses of a company and external opportunities and threats faced by it are closely examined to chart a marketing strategy for the future (Forsyth, 2010, pp. 102-106). Major strengths, weaknesses, opportunities and threats of Starbucks are analyzed below.
Using these numbers show a ratio of 1.549; this is a fairly low number for a company considering anything under “1” is reason for concern. Starbucks reported their current assets as $2,035.8M and $1,581.0M in 2009. Using these numbers show a ratio of 1.287; this number is also considerably low but does show improvement from 2009 to 2010. Starbucks acknowledges the need for liquidity but comply with federally limits and believes the credit risk to be very minimal (Starbucks Corporation, 2010).
As Starbucks' strategic vision evolved over the years, so did its strategy. Starbucks current strategy in comparison to its original competitive strategy are: to continue the focus on growth; to establish a leadership with company owned stores in key markets such as USA, Japan, Australia, and UK; to pre-emptively enter and aggressively grow in all targeted markets; to leverage the brand into new product categories and channels; to continue operations improvement; to growth through innovation; to develop and maintain leadership talent; and to maintain their values, culture, and guiding principles. The key elements of Starbucks current strategy is to expand Starbucks globally, and to further develop its internet business. The strategy has changed over time as the business has grown exceptionally well in North America, and now they want to take that success over sea.
Liquidity ratios measure how well a company is able to meet its short term obligations without relying on selling inventory (David, Fred). Starbucks three main components in these current categories are cash, inventory and accrued liabilities. The current ratio indicates that if Starbucks needed to liquidate they would be able to cover their current liabilities. They would be unable to meet their outside obligations without selling off inventory to
2) Garthwiate, Craig; Busse, Meghan; Brown, Jennifer; Merkley, Greg “Starbucks: A Story of Growth” Harvard Business Publishing, July 2012.
The coffee industry has proven there is a never-ending shift of global power through the global economy. Thus, through the history of coffee, it is apparent that factors involving the globalization process such as absolute advantage and comparative advantage have had an impact
nalyze the specialty coffee café industry using Porter’s Five Forces and Macroenvironmental Analysis. What are the key success factors in this industry?
In this paper, I will talk about Starbucks Company. I will define the influence of the vision, and mission of the company and primary stakeholders along with their overall success. An examination will be conducted to categorize five forces of struggle and their effect on the corporation. I will carry out a SWOT analysis to determine the opportunities, threats, strengths, and weaknesses. Founded on the SWOT analysis, a technique of opportunities and advantages will be exploited while threats and weaknesses will be diminished. Several types and levels of techniques will be talked over to operate the profitability and competitiveness. I will outline a plan of communication to make approaches known to all investors. Two corporate authorities will be designated to assess the efficiency of the regulating managers. I will also assess the effectiveness of management within the Company and come up with sanctions for upgrading.
business model may seem, there is plenty of hard work invested and financial risks taken to grow
In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.
Starbucks dates back from 1971 and is based in Seattle, Washington. The company was founded by Gordon Bowker, Jerry Baldwin and Zev Siegl and it
Starbucks needs to evaluate the best in it is production and services. It also needs to look at it is assets compared to the competitors and if they are worthy their capability.
The purpose of this report was to analyze the internal and external environment of Di Bella Coffee in order to identify the brand´s strengths, weaknesses, opportunities and threats as well as evaluating the market situation and the brand´s strategic positioning.