External Environmental Analysis of Starbucks and the Coffee Industry Harold Brown Strategic Management March 3, 2011
* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco
Starbucks, the leader of the Beverage Industry is known by its franchises around the world. Therefore it has known as a global company in Beverage Industry. This part of essay will indicate company’s external environment via PESTEL analysis. To understand how political, economical, social, technological, environmental and legal issues can affect company’s external environment.
For more than three decades since Starbucks started its operations, the company was considered as a leading coffee chain operator. However, in 2008, the company faced a significant financial downturn that almost cost it its position in the marketplace. Through strategic planning and adopting a differentiation strategy, Starbucks, under the CEO Howard Shultz, recovered from the financial decline to regain a competitive advantage over other big companies like McDonald's and Panera Bread. This paper will discuss the business strategy and management for Starbucks Company and emphasize the importance of business strategy. It will cover the strategic basics of Starbucks, its financial downfall, an analysis of its profitability and a comparison with its key competitors as well as its technological threats and opportunities.
Starbucks is a strong competitor in the service sector and a leader in the gourmet coffee industry. With a continued growth rate in store openings and maintaining successful profitability of its operations, Starbucks has demonstrated its ability to sustain a reliable and steady growth. Starbucks’ ability to contend with the vulnerability to current financial threats such as economic recession, higher interest rates, and global competition, is constantly proven by its incomparable brand image, its continual product innovations, and its exceptional customer service. This
External Analysis of Starbucks 4 1.0.0. Executive Summary The Starbucks Corporation is the largest coffee chain in the United States and internationally. To better understand the coffee industry, the purpose of the paper will provide a detailed external analysis on Starbucks’ global operations. Included in the study will be an explanation on Starbucks’ initial founding history followed by its background as well as the purpose of the study. In addition, the paper gives a detailed assessment of the external analysis which consists of six portions. The first portion is the general environment analysis of the coffee industry’s operations and the way it factors in the demographic segment, the economic segment, the political/legal segment, the socio-cultural segment, the technological segment, and the global segment. The second
Starbucks gave the customers what they wanted. They ensured that there were ample locations and endless amounts of stores (Ferrell & Hartline, 2014). Furthermore, they provided drive-through services at several locations to further cater to parents with children or those with other needs. Likewise, Starbucks implemented order confirmation screens to help manage accuracy of orders. In addition, Starbucks found it essential to find ways in which to connect with its customers through its products by providing an atmosphere infused with music, books, and movies. Moreover, Starbucks wants to continue to foster entertainment that further supports the foundation of the coffee experience that the many customers have come to expect and enjoy.
Starbucks doesn’t only takes great care in their partners (employees) but also in their stockholders. Starbucks has paid out dividends to their stockholders every quarter over the last 4 years (Dividend History, n.d.). Currently the dividend rate is $0.32 per share quarterly (Dividend History, n.d.). This is pretty impressive considering not all companies chose to pay out dividends quarterly or yearly and Starbucks have provided payouts quarterly for the past 4 years straight.
Society today is deeply sensitive. As time moves on, people find more and more avenues in which to be offended. People today are offended by what others wear, the use of the word “man” in the Bible, and nearly anything else where an excuse may be formulated. It appears the only way to avoid offending someone or stirring up controversy is for one to simply to sit quietly at a table and drink their morning coffee. However, it turns out there is a chance of offending someone quite deeply by even doing this. Starbucks unveiled their 2015 holiday cups on the first of November. The simple, blank red cups have created a large amount of controversy regarding whether or not they should have used the words “Merry Christmas.” A Christian blogger named Joshua Feuerstein posted a video on Facebook four days later, where he declares that Starbucks “hates Jesus.” Starbucks responds that they are simply attempting to create an open environment, and are enabling others to draw their own stories and experiences on their cups (Whitten 1). However, as is becoming increasingly common with the current generation, they are ignoring an obvious fact: it is just a cup of coffee. As this battle rages on, there is little if any good that will come as a result. Overall, society needs to realize that some issues are insignificant, and taking them as seriously and as personally as many people do causes more harm than good.
Starbucks started its journey back in 1971, and has since grown to serve millions of sociable coffee-goers from around the world. With more than 16,800 locations across the globe as of 2009, Starbucks is still the dominant player in the ï¬eld of upscale coffee houses for mainstream customers. You ask: “How can they be ‘upscale’ but cater to mainstream customers at the same time?” To make a comparison to the fashion industry, upscale brands does not mean that mainstream customers cannot afford it, it means the pricing is within reach, and the urge to purchase a Starbucks coffee over a Tim Horton’s cup of coffee is in the branding. Would a woman rather carry a Guess handbag over a Gucci one? Would men prefer a Toyota Corolla over a Maserati
Starbucks was founded in 1971 as a fine coffee retailer by Jerry Baldwin, Gordon Bowker and Zev Siegal. Howard Schutz, CEO, acquired Starbucks in 1987. It has established itself as a neighborhood coffee house and a social gathering place for the community. Starbucks’ mission statement is “to inspire and nurture the human spirit one person, one cup and one neighborhood at a time (Jurevucius, 2013)
* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco Corporation