The Effects Of External Environment On Starbucks

Within the coffee industry Starbucks Corporations has grown from a small shop to a leading coffee distributor, proving to have financial strength and determination to continue growth. With the weakening economy the continued success of Starbucks

Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.

Starbucks is rated as the number one World’s leading coffee distributor. Customers satisfactions are always be in the center of their business and the company works consistently to maintain it as customer look forward to a unique experience when visiting one of Starbuck stores. With over 12,000 stores worldwide, Starbucks has always aimed at achieving and maintaining competition in the industry.  Starbucks success reside in many factors :  the company is admire and respected worldwide,employees are recognized and respected for what they contribute to the success of the company. Open communication

The internal environment of the Starbucks company is a representation of the general conditions, which affect their aptitude in executing a successful strategy. The internal elements are their growth of strategy (diversified portfolio), brand management, and human resources. The external environment of the Starbucks company are focused on competition, which are within the same business as them, legal and, political changes, opportunities such as environmental concern, and the demographic social issues such as income per household.

Starbucks is no doubt a phenomenon in the United States, but the brand wants to expand globally. Opening chains in various global locations such as Japan, Vienna, England; Starbucks wants to reach out to the coffee loving fans everywhere. Nevertheless opening chains globally is not that simple. There are many uncontrollable factors Starbucks need to focus on to make sure they are making profit as well has abiding by the country’s laws and regulations. Going global takes a lot of market research to make sure that the brand will be successful even with uncontrollable factors. Controllable factors can be tailored to fit the needs of each country. Starbucks has to find the happy medium so they don’t lose their identity overseas.

The purpose of this analysis is to evaluate the Industry’s features and the company’s strategy. The main analysis in this project is external analysis and internal analysis. External analysis is contain of strategy group, five forces, partial SWOT, PESTEL, Industry life cycle and Internal analysis is contain of market segmentation, CSFS, partial SWOT, generic strategy, Resources and Core competency, the Boston matrix, the Ansoff matrix and financial analysis. At last the recommendation part will indicate the company’s future prospects.

  Starbucks Coffee Company (Starbucks) has retained our consulting firm to advise them about current issues affecting their ability to optimize operations in today’s economy or changes needed to enhance operations management. This prospectus will identify those current issues related to operations management that are currently a challenge for Starbucks. For a company to remain competitive in today’s marketplace, a company’s management needs to provide high quality affordable products. Management needs to be able to differentiate among the various products. It is the

Starbucks Corporation is an American company that was founded in 1971 in Seattle, Washington (Starbucks Company Profile, 2014). It operates in 62 countries around the world, serving its specialty coffee products, teas, food items, and other beverages (Starbucks Company Profile, 2014). Additionally, Starbucks Corporation has a multitude of license agreements with other locations where they sell their products, such as grocery stores and national foodservice accounts (Starbucks 2013 10-K Form for FY ended on September 29, 2013). In 2013, Starbucks reported a revenue of over 14 billion dollars (Starbucks 2013 10-K Form for FY ended on September 29, 2013). The success of Starbucks Corporation, however, comes from a carefully planned and well-executed business model. A thorough understanding of the competitive environment for Starbucks Corporation has allowed the company to flourish in an age where the intersection of convenience and quality are of utmost importance. This report will apply the 5-forces model in order to evaluate Starbucks Corporation’s competitive environment and assess its competitiveness in the near term.

"External factors influence a firm 's choice of direction and action and, ultimately, its organizational structure and internal processes. These factors, which constitute the external environment, can be divided into three interrelated subcategories: factors in the remote environment, factors in the industry environment, and factors in the operating environment… In combination, these factors form the basis of the opportunities and threats that a firm faces in its competitive environment," (Pearce & Robinson, 2004, p. 78). To create an experience unlike its competitors, Starbucks must constantly evaluate all areas of their business while capitalizing on economies of scale and eliminating redundancies.

Starbucks is famous for their elevating coffee experience and comfortable ambiance that is designed for socialization. Starbucks’s US operations represent 76% of the company’s total net revenues, while International operations represent 20% of total net revenues, and GCP’s revenues comprise only 4% of total revenues. While revealing continuous growth in revenues, Starbucks’s revenues decreased by 7% to $4.95 billion and its net income decreased by 72% to $89.3 million for the 26 weeks ending March 2009. As a result, Moody’s Investors Service has downgraded Starbucks’ credit ratings. Not discouraged by this, Starbucks has plans to open 20 new stores by the end of 2009.

All around the globe people have either purchased a coffee or have heard of the coffee chain Starbucks. As the #1 coffee house chain in the world, with just over 19,700 stores, Starbucks has managed to stay at the top of their game with reinventing themselves and how they do business. Whether that is due to the change in leadership, structure or cultural change, this chain has surpassed the market place by overpowering the second place Dunkin Donuts by almost 8,000 stores worldwide. Nothing seems to slow down this powerhouse and they have the numbers to prove just that. The company has spent decades growing only the best for their franchise. Starbucks has included “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Jurevivius, “Mission Statement of Starbucks”). How is it that one chain can take the world by storm?

Threats to Starbucks include the entry of new competing gourmet coffee providers, the increasing overhead costs, and the ongoing sluggish economy. The success of Starbucks has garnered many admirers and competitors. Because the barrier to entry is relatively low, many coffee companies are copying and competing with Starbucks, such as Coffee Bean and Tea Leaf, Seattle’s Best Coffee, and even McDonald’s Cafe. In addition, the increasing overhead costs and the sluggish economy further negatively impact Starbucks’

This case study gives an overview about Starbucks International Operations. It will explain how Starbucks expanded outside US and the strategies they adopted to give tough competition to its international rivals.

The purpose of this research is to understand different elements of business in Starbucks the publicly traded company. We have analyzed and compared how social, economic and global environments affect Starbucks from a business perspective. We studied and summarized how marketing, finance, international business, accounting, and management function in Starbucks. We demonstrated an understanding of the vocabulary of business, building an understanding of business skills to succeed in the world of business. Through our research, we explain and show: the company 's mission statement and history of growth, beneficial and poor ethical decisions, and how the company markets and distributes its products internationally. We also gathered information about Starbucks operations how they were effected during the 2008 recession. We researched Starbucks financial statements as one final element of their success and growth as a publicly traded company. Through our analysis of Starbucks, we were able to comprehend the complex science that makes a business successful and what it takes to grow international levels.

Following its success in the United States, Starbucks ventured overseas and quickly became a globalization icon. With its rapid globalization strategy, Starbucks expanded from about 5000 stores to an estimated 15,000 stores in 2000 (Groth, 2011). By mid-2000s, Starbucks’ supply chain faced many issues, resulting with challenges of having to fulfill expansion strategies yet minimizing escalating operation expenses. By 2008, Starbucks’ stocks fell by 42% (Schultz, 2011). The rapid expansion took a toll on the sales growth and stretched the limits of the existing supply chain, which then rippled down to erode the customer-valued ‘Starbucks experience’ (Gibbons, 2011).