Starbucks Corporation is North America’s leading roaster and specialty coffee retailer. The corporation target to build Starbucks into the most popular coffee brand in the world. To attain that goal, the corporation will continue to enlarge its retail trade, its mail order and professional sales businesses rapidly. Employees are one of Starbucks’ most important resources. Employees must be treated well if the company is to prosper. All employees are entitled to all of Starbucks’ benefits and minimum wage. Starbucks’ unwavering commitment to the environment is guided by an environmental committee. Furthermore, they have made significant contributions to local charities concerned with child environmental homelessness and AIDS support.
Starbucks Corporation is a multinational coffee shop chain in United States and it was founded in Seattle,Washington in year 1971. Nowadays, the company operates over 28,000 around the world. ,Starbucks also has a wide range of new flavors and foods, such as La Boulange pastries, fresh juices, frappuccino beverages and snacks, including chips and cookies.
2.0 Application Of PEST/LE
The PESTLE analysis framework will impact Starbucks Corporation. While Starbucks must continue to control its remote or macro environment. The PESTLE analysis model can satisfy this need. Despite the negative impact on its business,Starbucks Corporation can continue to be successful in the macro environment.
2.1 Political Factors Affecting Starbucks Corporation
The political factors is the major reason that affect the Starbucks’ business. In this factors, the sources of raw materials will attract more attention from the other countries and politicians. Moreover, Starbucks corporation need to abide to the local laws and rule when buying the raw material.
2.2 Economic Factors Important to Starbucks Coffee’s Business
The depression of ongoing global is a main external economic is impetus for Starbucks’ company. This factor will dent the Starbucks’ profit. Nowadays,the commodity prices are also very high, and this reason will let many customer shift to other alternatives that more cheaper.
2.3 Social/Sociocultural Factors Influencing Starbucks Coffee’s External Environment
Starbucks can offer their product more cheaper to the customers, but it may have to sacrifice the quality of products. When start-up a business, the company will faces the challenge of the sociocultural.
2.4 Technological Factors in Starbucks Coffee’s Business
As the technological factors, Starbucks have a good mobile apps but the apps need to use in WI-FI zone. Furthermore, the customers can get the voucher, discount from the apps.Furthermore, the mobile apps also can let the customer done their payment in a easy and convenient way.
2.5 Legal Factors
As the legal factors, Starbucks Corporation need to confirm that they will abide the legal of the domestic market while buying the raw materials.
2.6 Ecological/Environmental Factors
As the ecological and environment external factors, the practices of Starbucks’ business are linked to a variety of activists and international advocacy organizations, and even consumers have expressed their views
3.0 Porter’s Five Forces Analysis
The Porter’s Five Forces analysis model supply information for strategic management to face five forces, such as competitive rivalry, the bargaining power of customers or buyers, the bargaining power of suppliers, the threat of substitution, and the threat of new entrants.
3.1 Competitive Rivalry Or Competition With Starbucks Corporation
Starbucks faces intense competition in the food service and coffeehouse industry. This force is related to the impact of challenger on each other and the business. Moreover, Starbucks has many competitors of different sizes in terms of professionalism and strategy, and the number of competitors varies. In an analysis of five forces at Starbucks, this modest diversity further enlarge the level of competition in the business.
3.2 Bargaining Power Of Starbucks’s Customers / Buyers
The Starbucks coffee company experiences the power or bargaining power of a buyer or customer. This power is depend on the impact of particular customers and customer groups on the international business environment. Among the force analysis model, the bargaining power of buyers is one of the most important factors that influencing companies. Customers will shift from Starbucks to other brands easily because of low-cost switching. Furthermore, the availability of high alternatives will let customers keep away from Starbucks , as there are many alternatives, such as instant drinks in vending machines.
3.3 Bargaining Power of Starbucks Coffee’s Suppliers
The Starbucks Corporation will affected by bargaining power of suppliers. This force will impact the suppliers on the corporation and its industry environment. The external component that contribute to the weak bargaining power of Starbucks’ suppliers is moderate size of particular suppliers. However, the various suppliers have impair their bargaining power. The bargaining power of suppliers has further weakened because the huge overall supply. This external consideration restraint the force of individual suppliers. In these five force analyses, the overall impact of external factors is the weak or bargaining power of the company’s suppliers.
3.4 Threat of Substitution or Substitutes to Starbucks Products
In the five force analysis model, this force is related to the impact of alternative products or services for employment and external environments. As the strong threat of substitution against Starbucks Corporation is the components of this five-force analysis suggest that alternatives have a lot of potential to negatively impact the business of Starbucks Corporation. The large validity of alternatives let consumers easier to buy these alternatives alternately of Starbucks products.
3.5 Threat of New Entrants or New Entry
Starbucks Corporation faces the moderate force or threat of new entry. This refers to the influence of new participants or new entrant in the industry. The external factors contribute to the moderate threat of new consumers against Starbucks is the modest cost of doing business is relevant the changeability of the actual cost of building and maintaining operations in the coffeehouse industry. These external factors enable small companies to do business and compete with Starbucks Corporation. Moreover, the costly brand development will reduces the threat of alternatives.
4.0 Application of SWOT Analysis
As the SWOT analysis of Starbucks Corporation considers the advantages and weaknesses of coffee shops and related businesses. The analysis also considers opportunities and threats related to the competitive landscape, which is partly depend to some extend on the powerful forces of competition.
4.1 Strengths Of Starbucks Corporation
As SWOT analysis model involves internal factors that companies can use to address weaknesses and protect against competition. Furthermore, Starbucks Corporation has the most strongest and popular brand image in the world. The company has an increasing number of loyal customers, which adds stability to the business of a cafe.
4.2 Weaknesses Of Starbucks Corporation
As SWOT analysis, the weaknesses are major factors that reducing or limiting business capacity. Starbucks has high prices, maximizes profits, but reduces the affordability of its products. The weak internal strategic factor causes the limitation of the company’s market share, especially in areas where disposable income is relatively low. Moreover, the SWOT analysis suggests that broad standards are also a weakness that limiting the business flexibility of coffee and coffee chains.
4.3 Opportunities For Starbucks Corporation
As the SWOT analysis model, external factors that provide opportunities for business growth and development will impact the business. Furthermore, the major opportunities available to Starbucks Corporation are the increasing revenues through extension in progressing markets. In addition, the significance of the SWOT analysis lies in business variety, which can improve the long-term stability of Starbucks Corporation.
4.4 Threats Facing Starbucks Corporation
As the SWOT analyses, threats are external factors that reduce or limit business performance. Furthermore, the major threats that related to Starbucks Corporation are it competes with a wide variety of companies in the global marketing. Competitors can reduce their market share by competing on low prices in this external strategic factor that threatens by Starbucks. Moreover, this social and cultural trend influences consumers’ cognition and buying behavior. Successful marketing campaigns and brand strategies are must to offset these trends.
5.0 Identification And Explanation On Area Of Commendation
At first, Starbucks has become a different kind of corporation a person who is committed to inspiring and nurturing the human spirit committed to providing the best coffee, creating excellent customer experiences, and becoming a good place to work. Humanity and love is one of the commendation of Starbucks. Starbucks Corporation gives opportunities for values to be translated into action. Starbucks has a series of initiatives to offer partners a way to express their humanitarian instincts with emphasize the connection between people.
In addition, Starbucks partners offer a structured career path. Expectations are set from the start so that partners can build their own path and manage their success. Partners also have opportunities for career development while emphasizing internal promotions.
5.1 Discuss And Explanation On Area Of Weakness
Starbucks’ operating structure is hampering its decision-making process because top executives are decision makers. This leads to inefficiency in situations where business departments need to make quick decisions. Before decision makers make daunting decisions, the situation could worsen further, leading to a loss of business opportunities and customers. Finally, it results in a loss of business entities.
Furthermore, the another weakness is the internal strategic factor of Starbucks high price and profit maximization, while reducing the affordability of products.The limit of the corporation’s market share is causes the weakness of internal strategic component.
6.0 FIVE Recommendation For Improvement
– 24 Hours Stores
If Starbucks has 24 hours operating, it can let several hospitals’ medical workers, police on duty, medical vans’ workers and other civic workers that working through the night can have some supper or drink some coffee to let themselves have a better spirit to work on.
– Starbucks Passport
Starbucks have over 24,000 stores in 70 countries, a Starbucks passport can let every Starbucks lover enjoy the Starbucks food, drink or discount while travelling. The Starbucks passport can make such like a stamp book to be used in different branches of Starbucks around the world.
– Branded T-Shirt
Starbucks can send out their t-shirt on their anniversary every year. The t-shirt can print out the history of Starbucks to let more people know the story behind them. The t-shirt also can let Starbucks lover have a good collection.
– Private Lounges
Starbucks is also about business deals or personal dates, so having some individual comfort space is also a good complement to Starbucks.
– App to Find Open Seats
The apps can lets users know area of Starbucks has the most free seats. The users can use the apps to check which Starbucks is closer and which is the least crowded at that time if looking for a place to discuss with friends or colleagues.
Starbucks’ success has been achieved through a unique marketing strategy.Starbucks has encountered fierce competition in all areas of its business activities. The market characteristics of each of their business units are the fierce competition among large companies with long permanent positions and a large number of new companies and fast-growing companies. In any case, Starbucks has good financial ability and good strategy. It can beat all the competition and become a top coffee supplier.