Starbucks

Starbucks



Macro Analysis of Starbucks

Introduction

Strategic management, to begin with a simple definition, is defined as a set pattern of rules, regulations and processes that would help and align all the core components of business operations, in the midst of producing or delivering quality goods or services. Strategic management must be inculcated into the organization for the sole purpose of managing all courses of action that prevail in cost-effective and timely execution of strategies and smoothly running a business (Alvarado, et.al, 2007).

The first Starbucks opened in 1971, was not the company that has become the iconic coffee symbol of America now. Starbucks' popularity exploded alongside a changing generation of young Americans who were on the move and connected to the world-wide-web, while yearning for bigger and better, no matter the cost. This generation quickly became known as the “Starbucks Generation” and now, a decade later; it is spilling over into a thriving China. Starbucks entered China in 1999 and has now made it their number one target for growth (Chandler 2002, p. 89).

The strategy of strategic management is a vision of the role of strategies depending on the direction or general impulsion for the decision plan. This vision must be integrated with business strategy and often, but not always, reflected in a formal plan. The strategic management should result in a consistent pattern of decision making in the competitive advantage for the company.

External and Internal Analysis of the Company

External Environment Threats

The biggest threat facing Starbuck is the possibility of increased competition or over expansion by Starbucks itself. Starbucks need to maintain consistency throughout it stores around the world. This issue is more important now, as Starbucks is looking to expand geographically. It is also important to maintain effective supply chain management in order to curb operational risk. It is also necessary to make sure that cost of expansion does not make coffee too expensive (Kim, 2008, pp. 41-49).

External Environment Opportunities

Global expansion is the best opportunity for Starbucks. Starbucks should move into emerging markets such as India, as these markets not only provide new market but also provides low cost of labour (Backer 2008, p. 63).

Internal Environment Strengths

The employee orientation of Starbucks is the internal strength of the firm. The consistency of operations also provides cost savings to Starbucks. The company has successfully articulated a positive culture within the organization, which has resulted in motivated workforce (Boxall & Purcell, 2011, Pp. 110-121). According to the CEO of Starbuck, “We built the Starbucks Brand with our employees first, not with consumers. Because we believe the best way to meet and exceed the expectations of our customers was to hire and train great people, therefore, we invested in employees”.

Internal Environment Weakness

The inappropriateness of expansion locations results in two Starbucks store too close to each other.

Starbucks Coffee: A Brief History

The success story of this young brand has its origins in 1971 in Seattle, Washington. The three students Gerald Baldwin, Gordon Bowker and Zev Siegl founded Starbucks Coffee, Tea and Spice Company with the ...