See our Privacy Policy page to find out more about cookies or to switch them off. Imitability of products, especially beverages. Please share the article link on social media to help us continue with this free academic research. The business operations of Starbucks will also be affected by local and federal laws and regulations. In this company analysis case, the following are the main threats relevant to Starbucks Coffee Company: Starbucks Corporation competes against a variety of firms in the international market. You may also like reading SWOT analysis of Starbucks. The SWOT Analysis model is a strategic management tool for assessing the strengths, weaknesses, opportunities, and threats (SWOT) relevant to the business and its internal and external environments. Shaoul, J. The company should consider partnering with other firms in foreign markets so that it can ride on the success of the local company. Quezada, L. E., Reinao, E. A., Palominos, P. I., & Oddershede, A. M. (2019). These are the people who will consume the end products or use the services of the company They, therefore, decide whether a business succeeds or not, even though they are not concerned with its day-to-day running. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. The company has also had to adjust its product offerings in order to meet the growing demands of the rising number of educated and health conscious consumers. https://ivypanda.com/essays/starbucks-5/, IvyPanda. This group involves owners, investors, customers, competitors, employees and suppliers. It also includes the impact of regulations and media organizations on your performance. Starbucks prioritizes employees in its corporate social responsibility efforts. Starbucks seeks to sell experience, and not just coffee. However, as competition becomes stiffer, Starbucks has had to embrace various promotional strategies. Conduct Initial Stakeholder Outreach. ). 4 August. The three major stakeholders for Starbucks are their suppliers, employees, and customers. The main external stakeholders of McDonald's include the customers, suppliers, governments, and local communities. Activists have protested outside its stores for various reasons, including human rights, union issues, and animal cruelty. Diversification is currently a minor growth strategy as shown in Starbucks Corporations generic competitive strategy and intensive growth strategies. Strong coffee and coffeehouse brand image. Starbucks Company's External and Internal Analysis Case Study Exclusively available on IvyPanda Updated: Aug 4th, 2021 Abstract Starbucks was started in 1971 and since then, the company has expanded very fast. external stakeholders are from outside of the company but Free Employment Stakeholder 803 Words 4 Pages - Starbucks Coffee We going to look. In 1992, Starbucks became a publicly-listed company. The recession resulted in an increase in the operational costs of the company (Bureau of Labor Statistics, 2011). For example, further diversification can reduce the coffee companys dependence on a single market, market segment, or industry, thereby reducing risks and improving revenue growth opportunities. Starbucks seeks to sell experience, and not just coffee. Internal OD consultants can communicate progress on their own and with organization key stakeholders, who they already have connections to. The empire filters back: consumption, production, and the politics of Starbucks Coffee. However, the management recently modified the logo in which the words Starbucks Coffee were removed. Internal stakeholders may include top management, project team members, your manager, peers, resource manager, and internal customers External stakeholders may include external customers, government, contractors and subcontractors, and suppliers. The branding symbols should be easily recognised. The purpose of the report is to examine the external and internal analysis of Starbucks. Mason, A., Cole, T., & Goza, N. (2017). External stakeholders are individuals or groups outside an organization who are vested interest in a company's success. Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. Who are Starbucks internal stakeholders? Internally, Starbucks stakeholders include the employees, the shareholders, subsidiaries and the management. Starbucks has a long-standing commitment to sustainability , and as part of our ongoing aspiration to reduce waste and become a resource positive company, we are continuously looking for ways to better manage our waste in stores and in communities; and developing more eco-friendly operations, from stores to supply chain. Weaknesses are internal factors that reduce or limit the capabilities of the coffeehouse company. As part of the Starbucks mission we are committed to maintaining our uncompromising principles while we grow. The McDonald's stakeholders are customers, suppliers, employees, managers, government, local communities and pressure groups. Consumers across the world are increasingly demanding fair practices, and this has seen many firms change their operating practices in order to accommodate these demands (Northey, 2007), and Starbucks is no exception. Dieting: Sugar is the New Fat. For example, the company competes against major restaurant chains that offer lower-cost coffee products, such as McDonalds and Dunkin. They can directly impact decisions or successes of an organization through: Taking a position or making a decision that goes against a company's goals and strategy. The coffeehouse chain business faces issues such as competition, imitation, and social trends that oppose international players in local markets. This detailed piece of work identifies some of the internal and external stakeholders of Starbucks. The industry environment also presents the opportunity to strengthen the companys market position through additional partnerships or alliances with other firms. On the other hand, external stakeholders include customers, clients, business partners, suppliers and shareholders. Our responsibility starts with being accountable to Starbucks stakeholdersour partners, customers, shareholders, suppliers, community members and othersand communicating openly about our business practices and performance. The main internal stakeholders of McDonald's include the leadership team, employees, and shareholders. Starbucks has indeed the highest share of the coffee shop market in the USA in terms of number of stores; however, it is well behind the market leader Costa Coffee in the UK (Lock, 2022). However, when the company decided to implements KPTs, it lost sight of the very things that made it successful. (2008). A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______. August 4, 2021. https://ivypanda.com/essays/starbucks-5/. The employees impacts Starbucks by producing one of the company's most important outputs, what the company terms the Starbucks Experience. Investors have interests in high financial performance of the company. And there are two types of stakeholders, including the primary and seconday stakeholders ( Clarkson, 1995). Sustainability Inititives. Supports region/market specific efforts - unique product . By contrast, external stakeholders include suppliers, governments, customers, trade unions, and creditors. This is a positioning strategy that will allow the company to trade in other products besides coffee, including music, alcohol, and ice cream. CONSUMERS / Blending coffee and frugality / A once-piping-hot trend cools off as java lovers try to economize. This significant figure shows that Starbucks is effective in addressing its corporate social responsibility to this stakeholder group, although there is room for improvement. This includes your impact on the environment and the quality of life of communities. In this partnership, Starbucks pays for 56% of tuition fees for employees junior and senior years at the University. External stakeholders comprise of the customers, competitors, suppliers, creditors, public and the government. Global Economic Prospects: Fiscal Headwinds and Recovery. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. CIB Assignment - Starbucks Case 1. We can define internal stakeholders as those directly involved in running an organization or a given project and who have a legitimate interest. For example, it is one of the first companies to offer full healthcare to full-time and part-time employees. However, Sainato (2021) reports that some employees are very unhappy with understaffing at some stores, heavy workloads, relatively low pay, and confrontational customers. When Starbucks opens a new store, it is important to consider the impact on the local communities. At present, much of this system remains, with Starbucks paying unexpectedly low taxes in the U.K. The external stakeholders of Starbucks are the suppliers and customers, while employees are internal stakeholders. These are standard stakeholders of almost every business that operates in the United States or overseas. ICO. Furthermore, a suitable recommendation in this case is to implement creative marketing and branding strategies that build Starbuckss corporate image as a contributor to community development. The industry environment of Starbucks involves diverse challenges, especially because of the companys moderate diversification. In the context of corporate social responsibility, Starbucks needs to account for the demands or interests of stakeholders, because the company is viewed not just as an organization for profit, but also as a citizen of society. Also, this SWOT analysis considers generalized standards a weakness that limits the flexibility of the coffeehouse chain business organization. Imitation of Starbucks concept by such competitors as McCafe and Gloria Jeans also played a role in the failure of Starbucks as customers could no longer identify Starbucks unique selling proposition relative to its competitors (Cateora et al., 2011). Starbucks Coffee Companys stakeholder management approaches are based on different programs for corporate social responsibility (CSR). Internal stakeholders often hold a percentage of shares, capital or other "stake" in the company, but external stakeholders play a different role in the company. As in any business, Starbucks must address investors as stakeholders. External stakeholders are entities that don't belong to your organization but are impacted by or impact your performance. Internal and external stakeholder analysis helps you understand where the business is, which stakeholders are important . Its Starbucks. It is also recommended that Starbucks Corporation consider pricing strategies that attract more customers. Research reveals the most important stakeholder group of organizations are employees who come ahead of customers, suppliers, community groups, and especially far ahead of shareholders. It is worth noting that it serves millions of customers every week which attests to an excellent customer retention (Starbucks, 2023). In addition, the firm can improve youth rates/wages to ensure satisfaction of youth workers in some markets like New Zealand. 3 pages, 1441 words. Another lesson that firms can learn from the failure of Starbucks in the Australian market is that it is always important to keep sight of the principles that made you successful in the first place. Strategic planning involves the design of options from which the company . Starbucks can also improve its CSR performance in addressing governments around the world by improving its tax compliance. The division contributed 13 percent of PepsiCos net revenues in 2015. Product differentiation is the core of Starbucks strategy to gain a sustained competitive advantage. For instance, they rejected an executive compensation plan for the CEO in a non-binding vote in 2021 (Sainato, 2021). An analysis of Starbucks ( SBUX) can help to further illustrate and understand the value chain concept. With being the leader in a multinational industry, Starbucks understands that it has to manage and maintain its relationships with all its stakeholders in order to continue its reign on coffee. Business weaknesses are identified in this component of the SWOT analysis. The target audience of Starbucks is middle to upper-class men and women Its the percentage of the general public who can afford their higher priced cups of coffee on a regular or daily basis. Starbucks. of caffeine, over four times the amount of caffeine Starbucks has since won the hearts of the Filipinos. A companys shareholders are the people and organisations who invest in it and share in the benefits or losses of ownership. This might be a member of an organization, volunteer, staff, management, board member, founder or a contracting body, client, community of interests such as locality or grouping of people who might benefit. Stakeholders are parties that take interest in a specific company, often for financial investment. A systematic review. This is because by the time the company ventured into the Australian market, smaller boutique-style coffee shops in the country had already gained popularity with coffee drinkers since they offered personalized and services. From there it . Starbucks has implemented different strategies to keep its customers coming back. The company contributes to different non-profit organizations in a bid to enhance brand awareness and image among local communities. The companys stores are normally located conveniently on busy streets and in major malls that command heavy traffic. Stakeholders, Mission, and Vision. 2010). If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. The 4 include 1. In general, Starbucks complies with rules and regulations. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. Puyt, R., Lie, F. B., De Graaf, F. J., & Wilderom, C. P. (2020). Web. Wall Street Journal. The management was convinced that a memorable and distinct brand would result in customer loyalty and repeat business. Need a custom Case Study sample written from scratch by In this regard, our Board of Directors has adopted governance principles, committee charters and policies to lead Starbucks governance practices. Ontario, Canada: A & I. Patterson, P. G., Scott, J., & Uncles, M. D. (2010). For instance, small local competitors can develop beverages similar to the companys products. These four words represent the major constructs firms need to consider to make the most of their internal set up and the external marketplace characteristics. However, it experienced supply shortages in the USA in the past, making many thirsty, and coffee-crazed customers unhappy. New York: Palgrave. The company is always introducing novel products in the market to suit the changing demands, tastes and preferences of its growing customer base. One of the Starbucks guiding principles is "to contribute positively to communities and environment.". Use a Multi-Channel Promotional Strategy Starbucks predominantly uses its website, social media channels and in-store displays to promote the brand and the products. The companys coffee stores are also located in different large chains. It is recognized worldwide for its high-quality coffee and espresso drinks, as well as its commitment to social responsibility and environmental sustainability. Starbucks is one such organisation. Stakeholder analysis refers to the range of techniques or tools used to identify and understand the needs and expectations of major interests inside and outside the organization environment. Such a move would impact positively on Starbucks business model. Some companies listed short strategic priorities like "invest in infrastructure" or "international expansion" without elaborating on the meaning of these objectives. IvyPanda. at Starbucks coffee as an example of a company that has both internal and external customers, and we should be able to apply some of the terminology that we introduced above. Starbucks was unable to replicate the experience offered by the boutique-style coffee shops is Australia. Starbucks failed in its maiden venture in the Australian market because by the time it was setting up shop in the country, Australians were already used to a coffee drinking culture that had been started by boutique-like coffee shops. Copyright 2017 2025. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Opening a new store can have a negative impact on the community because the local coffee shops may have to close down or be forced to change what they offer to compete with Starbucks. Although after that recession, revenue growth remained well. For example, Starbucks Corporations marketing mix or 4P indicates product mix expansion to include tea, food, and merchandise, in addition to coffee. Starbucks Key Resources Human resources, high-quality coffee farmer centers, product developers, and stores. The statement is concise and inspiring, bringing the core idea of the business - be part of the community and grow together with internal and external stakeholder. Internal stakeholders are people who are on the inside of the business that already serve the organisation these include staff managers board members etc. Internal stakeholders are, as the name suggests, stakeholders that exist inside a business. They can affect how successful Starbucks is by doing their job and providing inputs into decisions that go into creating products and services that customers want. This case study on Starbucks Companys External and Internal Analysis was written and submitted by your fellow As the worlds most popular specialty coffeehouse chain, Starbucks effectively addresses this interest. The company enjoys a superb distribution channel. The internal strategic factors identified in this part of the SWOT analysis of Starbucks Corporation show that the business has strengths that promote resilience through diversification and a global supply chain. In order to stay competitive, Starbucks redefined its strategy and changed its risk appetite. New York: McGraw-Hill Irwin. Web. Stake: Product/service quality and value, #2 Employees. The main interest of this stakeholder group is compensation and a growing demand from Starbucks. These threats are external factors that reduce or limit business performance. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). Strategic Operations Management a value chain approach. The company satisfies most of the concerns of stakeholder groups like customers, employees, suppliers, the environment, and investors. External stakeholders are those who have an interest in the success of a business but do not have a direct affiliation with the projects at an organization. While scouring some old marine books, something stood out. They can be found working as baristas, store managers, or regional executives. The history of Starbucks dates as far back as 1971 when Starbucks opened its first coffee store in Seattles Pike Place market (Patterson et al. One of the fundamental requirements for successful promotion is to facilitate friendly and smooth interactions among the companys representatives and the market without compromising the efficiency manner in which a company is able to offer its services to the target market. Savvy Shoppers in a Brave New World. Starbucks offers such differentiation through an excellent customer experience and quality coffee The Starbucks Experience is achieved through its well-designed stores with good ambiance and well-trained staff. This study discusses the internal and external business ethics practiced at Starbucks Corporation. A good example is the companys VIA ready brew (Starbucks, 2011) and internet surfing srevices using Wi-Fi internet connectivity (Oliviera, 2011). Such an image can help reduce sociocultural opposition against the companys expansion. Based on the foregoing arguments, the following recommendations are made to enable Starbucks enhance its business philosophy in the face of increasing competition and challenging business environment: Starbucks sells experience, and not just coffee. currently have, or could potentially have, a material effect on the firm. The variety of these industries has increased over time, as the company develops more products to complement its core coffeehouse business. However, the company has been criticized for tax evasion in Europe. Governments. The coffee culture in Australia is both mature and sophisticated. In the SWOT analysis model, effective capabilities for managing a global supply chain strengthen Starbucks by supporting operations that connect production (e.g., Arabica coffee beans in plantations) to consumption (e.g., caffeinated drinks in coffeehouses). In addition, the industry environment is subject to independent coffeehouse movements. IvyPanda. In addition, the report shall also explore Starbucks failure in Australia, and the reasons behind this failure. (2021, August 4). What is stakeholder and its types? Mars is the world's leading manufacturer of chocolate, chewing gum, mints and fruit confectionery. (2011). Celebrating its 50th year in business, it boasts 400,000 . More than $10 million in Foundation grants supported local and global COVID-19 initiatives. Are You A 30% Or Greater Disabled Veteran Who Wish To Be Considered Non Competitively, How Do You Take Your Coffee In The Morning, #1 Customers. Regional and state unemployment 2010 Annual averages. Years of coffee drinking has seen many Australians develop a more sophisticated palate and as such, they are able to enjoy a stronger and straighter coffee with no need for flavours and syrup shots to disguise the taste (Patterson et al., 2010). This SWOT analysis of Starbucks Coffee considers the strengths and weaknesses (internal strategic factors) inherent in coffee, coffeehouse, and related businesses. Moreno, J. In addition, the brand image should also have appealing attributes. One of the lessons learnt is that it is always important to recognize and appreciate the importance of local culture. 2021. While analyzing Starbucks ' finances during 2007-2014, in the seventh period, the ratio and growth decreased (2008/09). Within the SWOT analysis framework, this business condition creates a challenging environment where the company needs to use different sets of strategies and competencies that match various industries. What to do when stakeholders matter: stakeholder identification and analysis techniques. Starbucks is also affected by the government of a country in which it operates. How Much Caffeine Is In A Starbucks Mocha K-cup? Buckstein, J. The coffee industry is demand- driven and when economic conditions are harsh, consumers treat coffee as a luxury and this affects sales (World Bank, 2010). . We hope the article Stakeholders of Starbucks (Stakeholder analysis of Starbucks) has been helpful. Once you own the shares, you can hold or sell them its up to you. At the moment, Starbucks is ranked as the leading global coffee chain operator. Starbucks has a duty to maximize shareholder value by increasing profits and dividends, while also managing risks and complying with relevant laws and regulations. Thus, the companys comprehensive corporate social responsibility efforts can be improved to address this stakeholder group. Starbucks Case Study, SWOT, Internal and External Analysis 1. These are people and organizations that are outside of the business. The external customer is the person who purchases the goods or services, while the internal customer is anyone within an organization who at any time is dependent on anyone else within the organization. It is also important for Starbucks to keep in touch with activist groups that include unions and environmentalists when considering sustainability matters. We use cookies for website functionality and to combat advertising fraud. Stake: Revenues and safety, #5 Communities. The internal customers will be the people that work within the business of Starb. That's why they implemented a mobile employee app to reach their biggest asset: their customer-facing workforce. Starbucks Coffee Company (Starbucks) was established in 1971 as a fine coffee retailer by three academics in . Your privacy is extremely important to us. On the other hand, external stakeholders are parties that do not have a direct relationship with the company but may be affected by the actions of that company. It now has over 15,000 stores in over 44 countries. For example an external OD consultant may take a lot of time to understand the organization where internal OD consultants have a stronger understand being an insider of the organization. Dicarlo, L. (2004). For example, the companys generalized standards for crafted beverages reduce these products cultural alignment with local target markets and consumer preferences. Stakeholders can affect the firm's actions. Starbucks Ethics & Compliance supports our mission and values and helps protect our culture and our reputation by fostering a culture that is committed to ethical leadership and conducting business with integrity by providing resources that help partners make ethical decisions at work. Starbucks continues to improve its corporate social responsibility practices to address the concerns of different stakeholder groups. Business Analysis, Decision Making: Starbucks Transformational Experience, Howard Schultz View of the Possibilities for the Fledgling Specialty Coffee Market, A Advertising Campaign for Boutique Gelato, Starbucks Company's Pay Model Implementation, An Analysis of a Manufacturing Company Hesketh & Brown, Circa' External Environment and Industry Analysis, 2401 Utah Avenue South, On the other hand, external stakeholders include customers, clients, business partners, suppliers and shareholders. Web. Starbucks operates in various industries that have different challenges to business growth. In August 1987, Schultz bought Starbucks for $3.8 million He served as CEO from 1987 to 2000, stepped down briefly and then returned to take the helm in 2008. . The internal factors in this part of the SWOT analysis of Starbucks Coffee Company show that the business must develop strengths to reduce the adverse effects of imitation and high price points on the companys market share in the global industry.
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