Strategic Fit Analysis of Starbucks Coffee Company

4151 Words Apr 14th, 2013 17 Pages

This report deals with a Strategic Fit Analysis of Starbucks Coffee Company with focus on the United States Segment. Genus (1998) highlighted that strategic fit is the concept whereby strategy is a means for achieving a match between the external environment of an organisation and its internal capabilities, as part of a quest for establishing competitive advantage over rival competitors.

The researcher will evaluate the market environment that Starbucks occupies as well as the internal environment of the company. The researcher will also highlight strengths/weaknesses and opportunities/threats of the current Strategic Fit of Starbucks.

The Starbucks Coffee Company evolved from a single store in Seattle’s
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Therefore, the imposition of tariffs by the governments of any of the engaged countries would affect the company’s price for their product. * Government Stability: the stability of the government, not only in the US but in all of the countries which the company imports from, is an important factor in Starbucks’ performance. The recent US Election may have an impact on Starbucks if the elected administration enforces new taxation and legislation. * International Stability: incidents that compromise international stability, such as the 9/11 terrorist attack on the US, can have a negative effect on the performance of the coffee company. * Employment law: the profitability of the company could be influenced by US governmental concerns regarding minimum wage that companies are required to pay their staff. In addition, reduction in licensing and permit costs in countries producing coffee beans for Starbucks would lower the production cost for farmers resulting in savings that would be passed on to the consumer.

B. ECONOMICAL SEGMENT * Interest rates – An increase in interest rates in the USA would result in plans for investment and expansion being deterred by the Starbucks resulting in decreased productivity of the company. Furthermore, increased expenses for the consumers such as rising mortgage repayments would result in decreased availability of income to spend on luxurious products such as coffee. Low interest rates should have the
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