Starbucks Case Study - ORGANIZATIONAL STRATEGY

4978 Words Apr 28th, 2014 20 Pages
Introduction
In order to be successful in the globally competitive market, it is crucial that companies are aware of the important role organizational strategy plays in a businesses’ operations. Starbucks achieved worldwide success by implementing organizational strategies that are aligned with their organizational goals and mission.
This report evaluates all the components required in organizational strategy. The Five Forces Industry and SWOT Analysis discovers Starbucks’ competitive position in the coffee industry. Starbucks’ competitive advantage will be determined after completing a competitive analysis of their top competitors. With an in-depth look at Starbucks’ mission, we can see whether they are embodying it and if they
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Although, customers are not able to influence product prices, they do obtain some power. If Starbucks drastically raise their prices, customers will substitute their products for a cheaper one.
Based on the Five Industry Forces, Starbucks’ industry has a high attractiveness due to the low threats of character rivalry, new entrants, and bargaining power of buyers. Starbucks is able to determine the strengths and weaknesses in their position in the industry. With this knowledge, they are able to implement strategies that minimize their weaknesses. Starbucks handled their high threat of substitutes by expanding their product range which gave customers more variety to choose from. Starbucks’ international program with benefits served as an incentive for their suppliers to continue providing them with high quality coffee beans.

SWOT Analysis
Strengths
Weaknesses
1. Established brand equity throughout the world
2. Valued and motivated employees, good work environment
3. Most recognized brand in the specialty coffee business
4. Provides customers with a café experience unlike no other coffee retailers
5. Loyal customer base willing to pay premium prices for Starbucks products
6. Sustained market share in the coffee industry
1. Products are more expensive than competitors’ products
2. 76.5% of Starbucks’ revenue comes from the US
3. Coffee beans price is the major influence over firm’s profits

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