StarbucksExecutive Summary We can definitely say that
Starbuck is one of the most popular and famous coffee shops. It was established
in 1971 by Jerry Bladwin, Gordon Bowker, and
ZevSiegl in Seattle.. As rivalry is expanding in the business, Starbucks’
business strategy is at an ever significance stage, in order to keep up and
develop as a company. In today, Starbucks coffee company has grown into the
number on e specialty coffee retailer. It operates many coffee shops across the
globe in more than 62 countries. Starbucks also is a dominant Fortune 500
company who has built a trusting brand name through various competitive
strategies and has stood out among competitive forces. This
case study analysis plans to decide the best strategicoptions for Starbucks’s
future, and it reviews Starbucks’s performance and environment from different
perspectives before strategic recommendation are made on the conclusion
section. This case study analysis plan tries to address all area of the incorporated
through proper analysis, to acquire these strategies.Analysis of Firm Structure A company firm’s structure is very
important for a company. Starbucks has developed to have an organizational structure
that matches current business needs.At this section, Starbucks did a good job
in firm structure. It grows with the business, enabling the company to
optimized processes and the quality of its goods and services. The fourkey
features of Starbucks’s firm structure is functional structure, geographic divisions,
product-based division and teams. The functional structure of Starbucks’s firm
structure is grouping based on business function. Like, it facilitates top-down
monitoring and control, with the president and CEO at the top. Starbucks’s firm
structure involves geographic division. There are many stores over 62
countries. Each geographic division had a senior vice president in charge of
company. Next, Starbucks’s firm structure also focuses on certain product
lines. It helps them effectively develops and innovates its product with
support from its firm structure. Last one feature of Starbucks’s firm structure
is team. Teams are most important at the lowest organizational levels,
especially the Starbucks. This feature of Starbucks firm’s structure enables
the company to provide effective and efficient service to consumers.SWOT
AnalysisSWOT analysis stands for strength, weakness, opportunities and
threats. A SWOT analysis is a tool thatStarbucks has used to choose if a venture is profitable as well as evaluate
whey they stand throughout the life of Starbucks. As a new division ofStarbuck a new SWOT analysis has been conducted to
determine the strengths, weakness, opportunities, threats, and trends, both
external and internal, of this decision in conjunction to the achievement ofStarbucks. This analysis will helpStarbucks have the information that is needed to be
successful in the industry.Strengths The
first strength of Starbucks is
strong brand image. Whenpeople think of coffee, they will immediately think
of Starbucks. It is a huge advantage when it comes to brand recognition and
wanted to visit the retail locations.Second strengthis customer loyalty. Most
customers will come back to Starbuck and buy a coffee because Starbucks has a
highqualityof products and service. So, Starbucks has a strong customer base. Next,
the strength of Starbucks is locations. With 19,767 company-operated and licensed
stores in over 62 countries, the brand outreach is truly incredible. Some of
the prominent markets where Starbucks operate are United States, China, Japan,
United Kingdom, and so on. This makes Starbucks be a international known brand. Last
strength of Starbucks is Starbucks partners. Starbucks calls their employee “partnersâ€
because they feel that the employees are one of the most important keys to
success. Starbucks have employed 182,000 partners worldwide. These Starbucks
partners leads to customersatisfaction. It has the lowest employee turnover and
looks to build from within. Weakness The
first weakness of Starbucks is lower beverage innovation. Starbucks is reliance
on beverage innovation. It is vulnerable
to the possibility that their innovation may falter overtime, and the company
growth is mostly driven by beverage innovation. Second, Starbucks has problems
in some international operations. Like, a number of openings are failing in
Japan. Although they said they are cheaper alternatives in the market, and many
often complain on how expense a single drink can be especially being that it is
a franchise. Even though, Starbucks operates over 62 countries. It focuses on
more than 75% of the company’s store are in USA. It is not good for a global
company like Starbucks. Another weakness would be Starbucks has a negative
image. Opportunities With the expansion into teas and juices, Starbucks can continue to come
out with new products to further diversity themselves from the competition.Another
opportunity is expansion of retail operation.Starbucks has the opportunity to
expand in Chinese market. Technological advances can help the company enhance
their loyalty program. Another opportunity is growth in coffee markets. Which
means being able to get the brand to a point where marketing does itself is
something they continue to strive for. Last opportunity would be brand extension.
It comes a point where Starbucks needs to rebrand their brand in order to
ensure regrowth in the industry. Threats Even Starbucks is a
successful company, it still have lots of threats. As a coffee market, it is
low barrier to entry. Then, it has a high competition with in the industry. With
companies like the coffee bean, Peer’s coffee, and Dunkin Donuts and so on. In
recent years, Starbucks has slowing United States retails sales because markets
are mature in United States.Another threat is changing health choice of
consumers. As we know that, coffee is not health for us body. Some of the
beverage option offered is not particular seen as health by consumers in
Starbucks. In today society, global economical crisis is happened. Then, it may
decrease people who wants buy coffee in daily life. The last threat is that
cost of coffee bean is expected to rise in the future. If it happened, the
price of Starbucks also will go up. Five Forces AnalysisThe
Porter’s Five Forces Model is described as “ model developed by strategy
expert Michael Porter that identifies five competitive forces that influence
planning strategy.â€（Kurtz, David & Boone, Louis 2015）It introduces how
five competition forces impact the competitive landscape in an industry. These
forces are Bargaining Power of Suppliers, Potential New Entrants, Bargaining
Power of Buyers, Threat of Substitute Products, and Rivalry among Competitors
within an industry. It will help establish Apple’s position in the market by
using Porter’ fire forcesConfrontation
Matrix The Confrontation Matrix used to further analyze
each combination of the SWOT analysis. It can help managers identify the most
important strategic issues the organization is facing. In this matrix, the
score 3 is identified as the best option, and the lower score is blank which
means zero. According to the
Confrontation Matrix, this matrix outlines several trend. And the most
important thing of this confrontation matrix is shows us that many of the
opportunities available to Starbucks can be accomplished through the use of
their internal strengths. Also, from this chart, many of the threat that is
made can be taken care of by Starbuck’s internal strengths.Therefore, this matrix
is very helpful for a company.Impact/ Probability MatrixIn Impact/ Probability Matrix, we need to prepare
the strategy to check the risk that has both high potential impact and high
probability. The Impact-Probability framework is key to study the threats that
Starbucks faces. A few threats were created from the SWOTanalysis. These treats
have both a probability and potential, that will decide how likely, and what
the effect will be if these dangers are not oversaw. This matrix permits an
organization, for example, Starbucks to understand that risks and threats are
most important to concentrate on first. As the matrix graph, High market
rivalry is the well on the way to affect Starbucks and destined to happen. The
following conceivable range of concern is lessening in customer loyalty took
after by the decline in coffee supply, financial pattern and diminishing in customer
demand. It is better for Starbucks to be aware of the incensement of coffee
bean pricing although it probability is medium.Positioning Map After company deciding its target markets, it is
important for company to decide what position it wants to occur in their target
market. According to textbook, product’s position is defines by consumers on important
attributes such as price, quality, competitor, products class, application and
so on.It is also business analysis tool as it helps explain how Starbucks is
viewed in relation to direct competition. Starbucks has many competitors like the coffee bean
and Peet’s Coffee. Each brand offers similar products and strategy. Then, the
different between these coffee shops is their “qualityâ€. It will make their
price is different in each of brand. For example, the Coffee Bean has a little
higher cost compare with others. And then, Peet’s Coffee has a lower price than
Starbucks.EFE Matrix EFE Matrix is stands for external factor evaluation
matrix. Which means this matrix analysis the Starbuck’s opportunities and
treats.The factors are rated from 1 till 4, where 1 is the lowest score, and 4
is the highest score. Which also means the highest weight is assigned to the
most important factors or several very important factors. In Starbucks, they are
still many ways can increase the growth of the company. The biggest opportunity
of Starbucks is expanding of retail operation in global. The other area not
highlighted here should be improved. On the other hand, Starbucks is facing
some threats like it is not as effective at responding to the United States
retail sales. IFE Matrix Internal Factor Evaluation Matrix is an analysis
tool to evaluate the major strengths and weakness in the functional area of
business. Also, it can help Starbucks to
determine how they responds to these factors and decide where more emphasis
much be placed. Starbucks has much strength like the brand image, customer
loyalty, location and so on. They created a good work environment and treat
each other with respect. According to the IFE
matrix, it shows that Starbucks is relatively has a strong internal position.
But Starbucks’s weakness is also very high, this means that Starbucks is still
weak in identifying its weakness.IE Matrix According to the textbook, the Internal- External
matrix is based on an analysis of internal and external factors which are
combined into one suggestive model. In this matrix, Internal Factor Evaluation
presents on the x-axis, and External Factor Evaluation presents on the y-axis.SFAS Matrix Strategic Factor Analysis Summary Matrix is an
overall look at the strategic position of a company. From this analysis,
plainly which key factor is imperative for a company, which it comes from
Internal Factor Evaluation and External Factor Evaluation. These were selected based
on the individual level of importance relating to the position of the company.
Also, Starbuck need to know what customer need compare with others competitor. The result of this matrix all in all taking into
account the balanced weights is a score of 3.18. Another essential part of this
test is that it shows the time times of length of effect for every section,
which figures out what zone will be most helpful in the long haul or
short-term, and along these lines how to react. In general this network
presentations to Starbucks that they ought to attempt to keep up its clients,
keep on expanding its business sector particularly developing markets, grow its
item go, while augmenting their brand image and keeping their customer loyalty.Competitive
Profile Matrix Competitive Profile
Matrix is important for a company. It identifies a firm’s major competitors and
its particular strengths and weaknesses in relation to its competitor. There
are two major competitors with Starbucks. These competitors are the Coffee Bean
andMcCafe. In this matrix, rate 1 means a major weakness, and 2 means a minor
weakness to a company.However, this Matrix will show the difference of total
weight score between each coffee shop.This competitive profile matrix is a particularly important one to consider when
addressing competition, and helps to compare Starbucks based on the direct
scores. This analysis concluded with Starbucks at a rating of 3.08, Coffee Bean
at a rating of 2.87, and McCafe at a score of 2.43. These can be broken down
individually to help address each strength and how each factor impacts the
other in the industry.The result of this matrix shows
how the competition between the three coffee shops.BCG Matrix According to textbook, the Boston Consulting Group matrix is enhancing a
multidivisional firm’s efforts to formulate strategies. And also, the BCG
allows a muti-focused firm to manage its portfolio by examine relative market
share position and the industry growth rate each division relative all other
divisions in the organization. In this matrix, Starbucks BCG matrix below show
four divisions which include Cash Cows, Stars, Question Marks, and Dogs. The
result of this matrix shows that Starbucks is in Stars. Star division
identifies best long-run opportunities for growth and profitability. Starbucks
income statement shows steady increase. So, Starbucks were identified long-run opportunities
for profitability is overall good. It is a division for a company. GE/McKinsey Matrix GE/ McKinsey is a strategic tool for portfolio study, it analyses and
compares the different businesses on basis of two variables “competitive
strength†and“market attractivenessâ€. Five important business factors were selected
and use to analyze in the coffee industry. The
result of this matrix shows that the industry attractive ness score is 3.50
while the business unit strength test is 3.10. Also, we can see that Starbucks
in Invest section, it means that their management would like to allocate
recourses to investment. Additionally, Starbucks has high market share, and
they have strong business units. It can help a company to suggest their
particular strategy. It is good that a company has a strong unit. Industry Life Cycle (ILC) Analysis The industry life cycle matrix is aimportant tool to help access
where a company is it with regards to its company growth and
decide their business strategy among the industry. This helps Starbuck to determine strategies
for continuation or decline that allow the best possible options for strategic
business. There are five stages on the industry life cycle matrix.These are
emergence, accelerating growth, decelerating growth, maturity, and decline.
However, Starbucks is nearing the deceleration growth area. Which meansStarbucks
still have opportunity for properly accessed growth plan. They can do expand
the market and it have to be very well planned out in this particular stage in
the industry life cycle. Also, competition is high in this stage, and revenue
growth begins to decelerate. This leads into the area of maturity and decline
where organizations’ most significant choices become possibly the most
important factor. Then again there is certainly stillroom for growth. SPACE
Matrix The SPACE matrix which is also known as the
strategic position and action evaluation. It is atool of determining which
strategies a company should undertake from four dimension frameworks:
aggressive, conservative, defensive, and competitive. This matrix normally has
two axes where one axis represents the two internal dimensions of an
organization- financial and competitive position while the other axis
represents two external dimensions, which is stability and industry position. A
look at Starbucks’ performance shows that the company should be place on the
aggressive quadrant since it is financially stable and competing very strongly in
the various coffee industries that it serves.
Also, since Starbucks qualifies to be on the aggressive quadrant, which
means Starbucks have four option strategies like backward, forward, horizontal
integration, market penetration, diversification and market development
strategies. Grand Strategies Matrix Grand Strategies matrix
is an important tool for creating alternative strategies for a company. This
matrix was applied to develop strategies for Starbucks’ different business
units. There are 4 different quadrants according to their competitive position
and market growth in this matrix. The result of this grand
strategies matrix is shows that Starbucks is in Quadrant I. Which means product
categories with a strong competitive position and rapid market growth. It
suggests that Starbucks had a good opportunity to do market expansion and
product development.QSPM Matrix Quantitative Strategic Planning Matrix is helpful to use in
incorporation with several of the previous graphs in order to find the best
strategy for Starbucks. It consists of three stages that are used in the
strategies formulation process. Also, this matrix incorporate other internal
and external factors to make the best strategic business plan for Starbucks. Another
advantage this matrix holds is that this framework fuses inward and outside
variables, with the outcomes appeared from whatever is left of the grids all in
all, which gives exceptionally exhaustive and full information. Another advantage this network holds is that this framework fuses
inward and outside variables, with the outcomes appeared from whatever is left
of the grids all in all, which gives exceptionally exhaustive and full data.
The consequence of this test is a score of 5.73 on the flat incorporation test,
and a score of 5.63 on the related expansion test. Each of these outcomes are
fundamentally the same, and high also, which recommends that these are
substantial regions of center for Starbucks.OSPP Matrix TheOptimal Strategic Performance Positioning matrix is a very useful evaluative
tool for company’ performance strategic nalysis. This matrix analyzes the
interrelation of four variables. These are strategic posture, strategic
investment, future competitive position and future industry prospects. This
matrix can help Starbucks to determine their position in the industry.As the follow graph, it can tell that there are 4 zones. For Starbucks, the environmental turbulence
level is relatively low. This is good for Starbucks as they are responsive to
change.The result of this matrix, it shows that Starbucks
are in Zone 1. Which means recommended strategies for Starbucks is market
penetration, market development, and product development.

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