STARBUCKS ANALYSIS

Starbucks Analysis



Starbucks Analysis

Introduction

The first star buck's outlet started in 1971, Seattle, by Zev Siegel, Gordon Bowker and Jerry Baldwin. Now, the current position of Star bucks in the international market is gaining significance day by day, due to their reorganizational business strategy. Start bucks started business with an aim to establish the world leading coffee retailers. “The mission of Starbucks is to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow”. This mission paves a path for employees to make better strategic decisions. On the other hand, it also supports customers by providing them confidence that they will be satisfied all the time. The key reason of success of start bucks is its strategy of providing a place to socialise, apart from office and work.

Discussion

External Analysis

Starbucks global operation was the key to its success, due to recession in 90's, it could no longer depend on American market. However, this operation can only be performed under three modes; wholly owned, joint venture and licensing. Which in later stages became a burden on parent company, as; it requires supervising, management trainings, technological advancements and ability to coordinate global strategies.

Starbucks is facing many threats due to these operations, as well as, expansion of the coffee market in the world.

Economic factor

It is the most significant aspect on which the development of the firm is based. Starbucks faced threats to business, due to global economic recession especially in German, Japan, Switzerland and US where it faced low sales. Furthermore, the recession hit the global market and affected the company's financial situation badly. Due to this, there was a rise in Starbucks coffee and dairy products as compared to other competitors.

Political and Legal

Since past few decades, there is increasing rifts between US and other countries of the world. Right after U.S declared war against Iraq, the situation for the company became worse. Many of the Middle-Eastern and Arab countries boycott the U.S companies including Starbucks. Starbucks import coffee beans, so there are possible threats if there is any change in import laws.

In addition to these threats, Starbucks has action suits pending that are challenging the wages status of manager and assistant managers of California store, under the law of California wage and hour laws. Though Starbucks deny all the liabilities. However, Starbucks agrees to take care of all the claims in order to avoid the protracted litigation (Jargon, et, al. 2006). Also, there are some policies to be implemented in the future. This can be a big threat as it can limit the company to do business with everyone, and can make it loose the good deals. It may lose several good opportunities from companies that do not follow same environmental policies.

Opportunities

Technological advancements

Starbucks incessantly introduces innovation to business for customer's. The introduction of Starbucks card is one of the best examples. It has created an opportunity to enhance customer service and to add convenience. Also, WI-FI on most sites, if not all locations ...