Business Finance
Johnson & Wales University Starbucks Business Strategy Analysis Report

Johnson & Wales University

Question Description

I don’t understand this Management question and need help to study.

Content

Abstract.........................................................................................

  • Introduction............................................................................

1.1 Starbucks Corporation...................................................

1.2 Coffee Industry..............................................................

2. External Environment Analysis.................................................................

3. Porter five forces analysis.........................................................................

Core competences, competitive advantage..................................................

Organizational Mission, Vision and Values...........................................

Value chain analysis.................................................................................

International stragegy..............................................................................

Competitor analysis.................................................................................

Financial analysis..................................................................................

Corporate governance............................................................................

Role of technology..................................................................................

Strategy going forward..............................................................................

Conclusions..........................................................................................

Recommendations.....................................................................................

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Final Answer

Attached.

Running Head: STARBUCKS

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STARBUCKS
Student’s Name
Institution
Date

STARBUCKS

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Table of Content
Contents
Abstract........................................................................................................................... 5
1. Introduction ................................................................................................................. 6
1.1 Starbucks Corporation ............................................................................................ 6
1.2 Coffee Industry ....................................................................................................... 7
The external environment ................................................................................................. 8
2.1 Political................................................................................................................... 8
2.2 Economic ................................................................................................................ 9
2.3 Social...................................................................................................................... 9
2.4 Technological .......................................................................................................... 9
2.5 Legal..................................................................................................................... 10
2.6 Environmental ...................................................................................................... 10
2.7 Current global health crisis .................................................................................... 10
Internal environmental analysis ...................................................................................... 11
Great brand image...................................................................................................... 11
Strong financial performance ...................................................................................... 11
Extensive international supply chain............................................................................ 11
Acquisitions................................................................................................................ 11
Moderate diversification ............................................................................................. 12
Quality, Taste and Standardization .............................................................................. 12
3. Strategic Planning, Efficiency, and Reinvestment Strategy............................................ 12
Employee treatment .................................................................................................... 12
SWOT Analysis .............................................................................................................. 12
(I) Strengths ............................................................................................................... 13
(ii) Weaknesses ............................................................................................................ 14
(iii) Opportunities......................................................................................................... 15
(iv) Threats.................................................................................................................. 16

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Porter's five forces ........................................................................................................... 17
The threat of Substitutes: Moderate to high...................................................................... 18
Bargaining power of buyers: Moderate to low .................................................................. 19
Suppliers bargaining power: low to moderate................................................................... 20
Competitive rivalry: Moderate to high............................................................................. 20
Core competences ............................................................................................................ 21
Competitive advantage ..................................................................................................... 22
Brand Equity: .............................................................................................................. 23
Pricing strategy: ........................................................................................................... 24
Large product range:..................................................................................................... 24
Customer service:......................................................................................................... 25
HR Management: ......................................................................................................... 25
Supply chain management: ............................................................................................ 25
Global Network: .......................................................................................................... 26
Organizational Mission, Vision and Values ...................................................................... 27
Mission Statement ........................................................................................................ 27
Vision Statement .......................................................................................................... 28
Values ......................................................................................................................... 29
Value Chain Analysis ....................................................................................................... 31
A. Primary Activities ...................................................................................................... 32
1. Inbound logistics ...................................................................................................... 32
2. Operations: .............................................................................................................. 33
3. Outbound logistics .................................................................................................... 33
4. Marketing and Sales: ................................................................................................. 33
5. Services:.................................................................................................................. 33
A. Support Activities ........................................................................................................ 34
Infrastructure: .............................................................................................................. 34
Human Resource Management: ...................................................................................... 34
Technological advancement: .......................................................................................... 34

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Procurement: ............................................................................................................... 35
International Strategy ....................................................................................................... 35
Multi-domestic:............................................................................................................ 35
Global:........................................................................................................................ 36
Transnational: .............................................................................................................. 36
Competitor analysis.......................................................................................................... 37
Financial analysis ........................................................................................................... 37
Table 4.1- Starbucks NOPAT ............................................................................................. 37
Table 4.2- Starbucks Return on Sales and Return on Investment ......................................... 38
Equity Valuation .............................................................................................................. 39
Financial Analysis with financial ratios on Starbucks:........................................................... 43
Financial Analysis of Starbucks ......................................................................................... 43
Company Overview: ..................................................................................................... 43
Financial Analysis ........................................................................................................ 43
Corporate Governance .................................................................................................. 44
The role of technology: ................................................................................................. 44
Conclusions .................................................................................................................... 45
TOWS ........................................................................................................................ 45
Recommendations............................................................................................................ 46
Reference....................................................................................................................... 47

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Abstract
In Seattle, which it’s located in Washington, America, a coffee chain company
called Starbucks started to operate. Currently, the company is the best known
international organization for the best coffee production within the country as well as
the whole world. Within forty-nine states, the company has the number of stores
totaling 16,120. Due to this, it makes to be the most significant world company. They
not only supply of coffee, but the company also distributes snacks together with soft
drinks.
Moreover, espresso-based hot drinks not left in their services. The supply of
coffee mugs as well as supplied to the customers, and they had a Starbucks logo. Also,
in the later times with the brand name Hear Music, Starbucks came into the music
sector. On the other hand, it started to sell little books and movies showing the
location of their stores. The books also contained information about the products from
the company, which was seasonal. In different countries, you find that many various
grocery stores get their supply of ice-creams from Starbucks. The supplied ice-creams
have the brand name. Currently, the company termed as the leading company in the
amount of coffee all over the world. It's known for its ability to produce Italian coffee
style, espresso beverages, teas, and pastries.
In our discussion report, we are first focusing on the mission statement made for
the Starbucks Company. Also, looking upon competing analysis and PESTLE
analysis, we will then take a review of the business structure. At the end of our study,

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we will take the SWOT analysis. We will also discuss the five forces of the model of
Porter. Finally, we will route to exploring and analyzing some primary competencies
found in the Starbuck Company. We will look at the competitive advantages and the
potential ways of the company. The use of two strategic models will help us in
discussing some recommendations for the business to run. In conclusion, we will have
to consider many identical recommendations and competitive strategies. By doing so,
we will get able to discuss the growth of the entire company (Cox et al 1994).
1. Introduction
1.1 Starbucks Corporation
In the year 1971, the Starbucks Company was founded by three businessmen who
were locally aiming to sell high-quality whole coffee beams. Howard Schultz, on his
arrival at Starbucks, in the year 1981, decided to make the company secure. He also
wanted to improve the high-quality coffee business using the name Starbucks. The
main goal of the company is to supply customers with high-quality coffee. Also,
attain product innovation, expand the retail services, and develop long term services
that are quality.
In their operations, they opened the first store in Seattle, Washington. In this city,
the company opened its headquarters and constructed a new plant. Still, in the 1990s,
the company located and opened about sixty local shops in UK. At the beginning of
2019, the company had 30,000 plants all over the world. In the shops, you will find
products such as backed and human made high-quality coffee, tea, different types of

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freshly cooked foods, and drinks. Due to their operating sequences, their coffee
industry is overgrowing all over the world (D’Urso, 2018). Through the board of the
national coffee association, about 49% of the adults living in America drink cof fee
beverages every day. The company also aims at the habits of customers and shares
their coffees' knowledge with them.
During the 20th century, the company ran under changes that helped in making
the business continue succeeding. The first change over the past twenty to thirty years
was the economic policy change in the whole world. They had targeted to reach
young adults since they were not loyal to the coffee industries. The company's
methods include locating its stores at places with a high population. The sites incl...

NicholasI (30336)
University of Virginia

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