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STARBUCKS CASE STUDY HELP

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Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl, opening its first store in 1971 near the historic Pike Place Market in Seattle. By the early 1980s, Starbucks had opened four stores in Seattle that stood out from the competitors with their top-quality fresh-roasted coffees. In 1980 Siegl decided to pursue other interests and left the two remaining partners, with Baldwin assuming the role of company president. This has gradually grown into the company which is multinational. This report provides a case study of Starbucks through internal, external analysis and recommendations made from the analysis. Our experts also provide case study samples and examples for the better understanding of our customers.

Background

The operations of the company include upwards of 7,300 coffee shops and kiosks in the United States, and nearly 3,000 in 34 other countries, with the largest numbers located in Japan, Canada, the United Kingdom, China, Taiwan, South Korea, the Philippines, Thailand, Malaysia, Mexico, Australia, Germany, and New Zealand. The mission statement of the company is “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” Our starbucks case study writers have been working in this industry for over seven years. The following six statements are the guiding principles of the company:

  • Provide a great work environment and treat each other with respect and dignity.
  • Embrace diversity as an essential component in the way we do business.
  • Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
  • Develop enthusiastically satisfied customers all of the time.
  • Contribute positively to our communities and our environment.
  • Recognize that profitability is essential to our future success.

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PESTLE analysis of starbucks

For the external analysis of Starbucks, the PESTLE analysis has been conducted. We have over 3000 expert academic writers at tophomeworkhelper.com to offer you optimum assistance at an economical price.

Political

The political factors affecting the company are:

  1. The main political factor is about sourcing the raw materials. This has gathered a lot of the attention from politicians in the West and from the source countries. For this reason, the company wants to adhere to social and environmental norms. It is willing to follow the sourcing strategies. It gives importance to fair trade practices.
  2. Another impact is the need to follow the laws and regulationsin the countries from where Starbucks buys the raw materials. Activism and increased political awareness in developing countries have made his essential.
  3. The regulatory pressures within the home market in the US are also a factor. Multinationals based in the US are now subject to greater scrutiny of the business processes. The company must monitor political stability within the country as well.
  4. The tax policies set up by governments, changes in governments, political instability are important factors affecting the company.
  5. The employment laws of the country in which it operates has great relevance to the company and its performance.

Economic

  1. The ongoing global economic recession is the prime external economic driver for Starbucks. This factor dented the profitability of Starbucks. This has convinced buyers to shift to cheaper alternatives. As they did not quit buying coffee, Starbucks should seek an opportunity here.
  2. The company has to deal with rising labor and operational costs. The inflationary environment and falling profitability are causing a lot of stress.
  3. Local currency exchange rates affect the revenue of a company. As Starbucks is a multinational company, these affect them greatly.
  4. Local economic environment in different markets affects the company as it determines the buying capacity of the people.
  5. Taxation level of the individual countries are important factors to be considered by the company.

Social

  1. As already stated, Starbucks can offer cheaper products but it might have to sacrifice the quality. This is the main socio-cultural challenge that the start-up faces. It will expand consumer base to include the buyers from the lower and the middle-income tiers.
  2. The “green” and “ethical chic” consumers are also concerning. They fret about social and environmental costs of the brands. Starbucks has to be aware of this trend.
  3. The baby boomer generation is retiring. This means spending by older consumers will decrease. Now, Starbucks will have to tap the Gen X and the Millennials as customers.
  4. Changing family patterns in USA and Europe is a serious concern for the company. As families are becoming more diverse, size and composition of the families are not limited to a limited pattern.
  5. Consumer preferences are essential consideration for the company as they must understand them on a local basis in order to attract the local clients. This is what went wrong in Australia, where the Starbucks competitive and aggressive business policies were disliked by most people and people promptly rejected them.
  6. Changing work patterns of people can also increase their revenue. As people are working in flexible shifts, or from work from home, morning pickups may not be as lucrative as before.
  7. Changes in lifestyles of population affects how demand changes. With changing lifestyle people might start to prefer home brewed coffee, or have more time to brew them at home as they are working from home mostly.
  8. The level of education of the population in local markets affects their income and subsequently their purchase power.
  9. Changing values among population is related to the awareness and image of the brand. People who prefer locally sourced materials for their social responsibility are not likely to prefer companies like Starbucks.

Technological

  1. Starbucks is in a good position to enjoy benefits of the emerging mobile wave. Its partnership with Apple to bring app-based discount coupons is helping it ride the mobile wave easily.
  2. The company introduced Wi-Fi capabilities in its outlets already.  Internet is important to the consumers. They can now surf the web and do work while sipping Starbucks coffee. This is an added value to the brand. It enhances the overall consumer experience.
  3. Starbucks is also enabling mobile payments. They are testing this in pilot locations in the US.
  4. Emergence of innovative technology can bring new changes in the industry and affect the quality of their products.
  5. Biotechnological developments can also affect the quality of their products.
  6. Developments in agriculture can affect the supply of the raw materials thus affecting their business.

Legal

  1. Starbucks must ensure that it does not violate any laws and regulations in the home market and countries from where they buy raw materials.
  2. It should also stay alert about introduction of caffeine production and consumption related policies and regulations by health authorities.
  3. Introduction of stricter customs and trade regulations in different countries can mean more bureaucracy and red tape, leading to increased cost for conducting business thus reduction of revenue.
  4. Licensing regulations related to the industry also differs across the countries and might create severe challenge to manage.

Environmental

  1. Many Starbucks business practices concern activists and international advocacy groups. Even the consumers have expressed issues. So, the company should take these into account to continue holding consumers’ trust.
  2. Environmental rules and regulations of the government might affect the company. They must become aware of these policies in order to remain in business without loss or lawsuits.
  3. Environmental disasters in countries which produce coffee beans may cause severe loss for the company leading to increase in the price of coffee beans, reduction of quality and many disgruntled customers.
  4. Global warming and other environmental issues in a global level affects production of coffee and many other raw materials which affects the company.

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SWOT analysis of Starbucks

Strengths

Weaknesses

  • Strong brand image
  • String financial performance
  • Growth in stores
  • Extensive international supply chain
  • Acquisitions
  • Moderate diversification
  • Quality, taste and standardization
  • Efficiency, strategic planning and reinvestment strategy
  • Employee treatment
  • String loyalty program
  • Gender neutral restrooms
  • High prices
  • Imitability of products
  • Generalized standards for most products
  • European tax avoidance
  • Procurement practices
  • Recall of products

Opportunities

Threats

  • Expansion in the developing markets
  • Business diversification and products specifications
  • Introducing new products
  • Partnerships or alliances with other firms
  • Exploit latest coffee trends and technologies
  • Adopt price differentiation
  • Strengthen online channels
  • Coffee delivery services
  • Coffee subscription
  • Competition with low-cost coffee sellers
  • Competition with big outlets
  • Imitation
  • Third-party delivery suppliers strike
  • Independent coffeehouse movements
  • Controversy on California warning rule
  • Philadelphia arrests
  • Coronavirus or other pandemic threats
  • Global recession
  • Rising prices of raw coffee beans

Recommendations

Based on the above analysis the following recommendations can be given:

  1. Introduce diversification in products and services offerings. This will help strengthen their position.
  2. Bring innovation andtechnological advancements in the company to deal with the rising competition and imitation.
  3. Resolve the issues with the social activists that oppose international market players.
  4. Reduce prices of the products to attract more customers and increase the affordability for all classes of consumers.
  5. Implement creative marketing campaigns, promotional activities, and branding strategies.
  6. Contribute to community development, participate in Corporate Social Responsibility (CSR), and sustainability practices.

Conclusion

From the above discussion, it can be said that despite various setbacks, Starbucks still remains the leading brand in coffeehouse chains and is likely to continue to do so as well. The issues that they have can be easily solved by following the recommendations made above.

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    When you opt for our services you are assured of a supreme quality assignment.

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    All our services are carefully curated to suit your requirements within a limited budget.

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    We always emphasise on the aspect of timeliness so that you’re delivered with your tasks within the specified deadline.

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