Name: Mohamed Ashraf Mohamed Refaat

ID: 20122330
Prof. Dr.Hanady Ragaii
STARBUCKS STRATEGIC MANAGEMENT

Introduction
Starbucks corporation is an American multinational chain of coffe houses and roastery reserves
headquarted in seattle , Washington . it is the world’s largest coffeehouse chain. As of
November 2021,the company had 33,833 stores in 80 countries ,15,444 of which were located
in the united states .

Mission
to inspire and nurture the human spirit – one person, one cup and one neighborhood at
a time.
Vision
treat people like family, and they will be loyal and give their all.”
External assessment
PESTLE ANALYSIS

POLITICAL

Impacts of Political Factors on Starbucks

The main political factor is about sourcing the raw materials. This has gathered a lot of the attention
from politicians in the West and from the source countries. For this reason, the company wants to
adhere to social and environmental norms. It is willing to follow the sourcing strategies. It gives
importance to fair trade practices.

Another impact is the need to follow the laws and regulations in the countries from where Starbucks
buys the raw materials. Activism and increased political awareness in developing countries have made
his essential

The regulatory pressures within the home market in the US are also a factor. Multinationals based in the
US are now subject to greater scrutiny of the business processes. The company must monitor political
stability within the country as well.

Some other factors to consider are:

 • Tax policy
• Employment laws

ECONOMIC

Impacts of Economic Factors on Starbucks

The ongoing global economic recession is the prime external economic driver for Starbucks. As I already
mentioned, this factor dented the profitability of Starbucks. This has convinced buyers to shift to
cheaper alternatives. As they did not quit buying coffee, Starbucks should seek an opportunity here

The company has to deal with rising labor and operational costs. The inflationary environment and
falling profitability is causing a lot of stress.

Some other economic factors which can affect Starbucks are:

• Local currency exchange rates

• Local economic environment in different markets
• Taxation level

SOCIAL

Impacts of Socio-Cultural Factors on Starbucks

As already stated, Starbucks can offer cheaper products but it might have to sacrifice the quality. This is
the main socio-cultural challenge that the start-up faces. It will expand consumer base to include the
buyers from the lower and the middle-income tiers.

The “green” and “ethical chic” consumers are also concerning. They fret about social and environmental
costs of the brands. Starbucks has to be aware of this trend.

The baby boomer generation is retiring. This means spending by older consumers will decrease. Now,
Starbucks will have to tap the Gen X and the Millennials as customers.

Other socio-cultural factors to focus on are:

 • Changing family patterns in USA and Europe
• Consumer preferences
• Changing work patterns
• Changes in lifestyles of population
• The level of education of the population in local markets
• Changing values among population
•

TECHNOLOGICAL

Impacts of Technological Factors on Starbucks

Starbucks is in a good position to enjoy benefits of the emerging mobile wave. Its partnership with Apple
to bring app-based discount coupons is helping it ride the mobile wave easily.

The company introduced Wi-Fi capabilities in its outlets already. Internet is important to the consumers.
They can now surf the web and do work while sipping Starbucks coffee. This is an added value to the
brand. It enhances the overall consumer experience.

Starbucks is also enabling mobile payments. They are testing this in pilot locations in the US.

Some other technological factors to keep in mind are:

• Emergence of innovative technology

• Biotechnological developments
• Developments in agriculture

ENVIRONMENTAL

Impacts of Environmental Factors on Starbucks

• Many Starbucks business practices concern activists and international advocacy groups. Even
the consumers have expressed issues. So, the company should take these into account to
continue holding consumers’ trust.

Some of the other environmental factors Starbucks should worry about are:

• Environmental rules and regulations

 • Environmental disasters in countries which produce coffee beans
• Global warming and other environmental issues in a global level
•
LEGAL

• Impacts of Legal Factors on Starbucks

• Starbucks must ensure that it does not violate any laws and regulations in the home market and
countries from where they buy raw materials.

It should also stay alert about introduction of caffeine production nd consumption related policies and
regulations by health authorities.

Others factors that might affect the company are:

• Introduction of stricter customs and trade regulations

• Licensing regulations related to the industry.

The PESTLE analysis above proves that Starbucks has a quite stable external environment. The key
reason behind this might be because it operates in the Food and Beverages industry. This means
consumers might reduce consumption partially but will not stop buying completely.

So, as recession is the most important factor, Starbucks has to lower costs and increase the value. This
way it can retain its consumer base and also gain consumer loyalty.

PORTER’S FIVE FORCES

 COMPETITION IN THE INDUSTRY
In the food service and coffeehouse markets, Starbucks is found against an
important force of economic rivalry or competitiveness. This influence is referred to
the result of companies on each other and also the trade climate in the Five Forces
analysis model. The subsequent external conditions face the intense force of rivalry
in the case of Starbucks Coffee Company:
• A Large number of companies (strong force)
• A Moderate variety of companies (moderate force)
• Low changing prices (strong force)
The large number of firms is an external force that heightens competition.
Starbucks Corporation is up against a slew of smaller rivals. In this respect, the
competitor population has a moderately complex pattern in terms of specialization and
technique. In this range, according to this Starbucks Five Forces review, increases the
degree of competitiveness in the sector. Moreover, due to the low conversion costs,
which are the drawbacks that customers face when switching from one service to
another, rivalry is bolstered. Consumers who move from the business to competitive
coffeehouses, for example, face minor drawbacks in this situation. Competition is one
of the company's top-priority obstacles, according to this portion of the Five Powers
review.

BARGAINING POWER OF BUYERS (STRONG FORCE)

 The powerful force or buying power of consumers or clients is detected by
Starbucks Coffee Corporation. This power is focused on the impact of individual
customers and groups of customers on the international market climatein Porter's
Five Forces analysis model. In the case of Starbucks Corporation, the following
external conditions lead to consumers' high bargaining power:
• Low changing prices (strong force)
• High substitute accessibility (strong force)
• Small size of individual customers (weak force)
The bargaining power of customers is one of the most important factors
impacting the corporate in this aspect of the Five Forces analysis model of industry.
Customers can quickly change from Starbucks to other brands due to the low changing
prices. Moreover, the presence of substitutes means that customers can avoid
Starbucks if they so desire, as there are numerous alternatives, such as instant
beverages from current machines. The suggestion that individualpurchases can found
on small scale in contrast to the company's overall profits is overwhelmedby these
affected forces.
Individual sales are in a small scale, implying that individual customers have
little impact on the company. Instead of this susceptibility, the other two external
influences increase consumers' purchasing power. And so, the Five Forces review
explains that consumer bargaining power is a high- priority strategic concern.

BARAGINING POWER OF SUPPLIERS (WEAK FORCE)

Starbucks Coffee opposes the weak force or bargaining power of suppliers.

Porter’s Five Forces analysis model demonstrates this force as the influence that
suppliers have on the company and its industry environment. The following external
factors contribute to the weak bargaining power of suppliers on Starbucks Corporation:
• Moderate number of individual suppliers (moderate force)
• High diversity of suppliers (weak force)
• Large scale supply (weak force)
An external consideration that has a moderate impact on Starbucks isthe
moderate scale of individual suppliers. The huge number of vendors, on theother
hand, restricts their bargaining power. Suppliers, for example, using a variety of tactics
and competencies to compete against one another to increase sales by selling more
products, such as coffee beans, to Starbucks Corporation. Due to the broad total stock,
producers' negotiating power is further reduced. For example, there are varieties of
coffee and tea suppliers all over the world. Individual suppliers' impact is restricted by
this external cause. The weak force or bargaining power of vendors on the business is
the overall impact of external conditions in this aspect of the Five Forces study.
 THREAT OF SUBSTITUTES (STRONG FORCE)

Starbucks has the strong force or threat of substitution. In the Five Forces
analysis model, this force influences to the impact of substitute goods or services on
the business and its external environment. The following external factors contribute to
the strong threat of substitution against Starbucks:
• High substitute persistence (strong force)
• Low changing prices (strong force)
• High capability of affording substitute products prices (strong force)

Substitutes have a high influence on Starbucks Coffee's business, according

to this portion of the Five Forces review. Because of replacements are widely available,
customers can easily purchase them instead of Starbucks goods. Substitutes such as
ready-to-drink foods, instant soda powders and purees, food and other drinks, and
vending machines, supermarkets and grocery stores, and small convenience stores, for
example, are widely delivered from different retailers such as fast food and fine-dining
establishments, vending machines, supermarkets and grocery stores, and small
convenience stores. Moreover, the low changing prices exaggerate the threat of
replacements since it is simple for customers to purchase alternatives to Starbucks
goods. Also, all of these alternatives are cheaper than the company's goods.

THREAT OF NEW ENTRANTS (MODERATE FORCE)

Starbucks has the moderate force or threat of new entry. In Porter’s Five
Forces analysis model, this force assigns to the effect of new players or new entrants
in the industry. In this business case, the following external factors contribute to the
moderate threat of new entrants against Starbucks:

• Moderate cost of starting business (moderate force)

• Moderate logistics cost (moderate force)
• High cost of brand development (weak force)
The uncertainty of the real expense of building and managing activities in the coffee industry is referred
to the moderate cost of doing business. The cost of running a small coffee, for example, is less expensive
than the cost of running a coffee chain. Smaller cafes, on the opposite hand, have fewer production
demands and, as a result, lower supply chain prices. These external factors make it easier for smaller
companies to heave a deal with Starbucks Corporation. Brand growth, on the other hand, is an
expensive effort. This state decreases the danger of substitution in the sense of the Five Forces analysis
model. Small coffee companies, for example, do not have the capital to grow their products. Moreover,
brand creation takes years to reach the power of the Starbucks brand. The corporation is faced with
force or the possibility of alternatives as a result of the convergence of these external influences

EXTERNAL FACTOR EVALUATION MATRIV( EFAS)

Key External Factors Weight Rating (1-4) Weighted Score

Opportunities
Expansion to emerging markets, 0.2 4 0.8
in particular to China, India, and
Brazil
High growth potential of single- 0.1 3 0.3
serve (instant) coffee market
both in the U.S. and abroad
High potential for flavored coffee 0.05 2 0.1
in the US market ($US 377
million)
High potential for courtesy coffee 0.05 2 0.1
products
Threats
High bargaining power of 0.15 4 0.6
suppliers raises prices of coffee
beans
Trademark infringements, 0.1 3 0.3
particularly in emerging markets
Increased competition from local 0.15 1 0.15
coffee companies and
international entrants in
emerging markets
Saturated markets in developed 0.05 2 0.1
economies
Increasing price sensitivity of 0.1 1 0.1
Starbucks customers
Negative publicity because of 0.05 3 0.15
water treatment
Total 1.00 2.7

The EFE Matrix has resulted in a final score of 2.7, which scores slightly above the
average score of 2.5 and means that with its current strategic orientation Starbucks
is only become on the edge with responding to external factors.
INTERNAL ASSESSMENT
1)organizational analysis
The corporate mission of Starbucks, beside its vision statement and business model square measure
crucial in crucial wherever Starbucks desires to travel as a corporation. The Starbucks mission statement
is: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time
(Starbucks, 2011).

To deliver on its mission, Starbucks executes some core principles. Firstly, Starbucks commits to the best
low. Starbucks isn't solely involved with quality for the top shopper, however conjointly ensures low
beans square measure purchased in associate degree moral manner which will improve the lives of the
farmers. Secondly, Starbucks deems their workers as an important resource and plus. Starbucks
guarantees good low to their customers, which may solely be delivered by high engagement of workers
(Starbucks, 2011). Thirdly, the third place expertise provided by Starbucks offers customers a gratifying
atmosphere of human affiliation and a way of happiness (Rice, 2009).

2) strategy analysis
consists of three parts:

i-marketing strategy analysis,

ii- operations strategy analysis

iii-international expansion strategy analysis.

I Marketing strategy

their brand strategy is built around two main pillars: customer experience and quality. Starbucks has
increased the perceived value of its brand by providing a unique, consistent “Starbucks experience.” As a
result, customers are willing to pay a higher price for a cup of Starbucks coffee.

Competitive advantage

To differentiate it from rivals, Starbucks convinces customers that it provides over a cup of occasional
and associates its whole image with a way of community policy. Moreover, Starbucks acts as a social
accountable company to strengthen its differentiation strategy. It promotes moral sourcing,
environmental post, and community involvement. Starbucks additionally prides itself on the innovation
of recent product, that additional differentiates it from its competitors. However, with the client base
changing into additional subtle and differentiation indicators adopted by normal occasional
corporations, Starbucks’ advantage on the differentiation strategy might dissolve.

The third part is about Starbucks’ brand building strategy. Its marketing strategy has focused on “word-
of-mouth” advertising and building the brand cup by cup, letting the high quality of their products and
services speak for themselves (Starbucks, 2010). For years, this unique marketing strategy has played an
important role in making Starbucks Coffee Company a success. In 2010, two-thirds of all coffee was sold
in supermarkets. Starbucks coffee sold in supermarkets featured distinctive, elegant packaging and the
same premium quality as that sold in its own stores. This new change requires Starbucks to create a new
way to build its brand. Therefore, the Starbucks marketing strategy has expanded to create a community
around their brand. On its website, individuals are encouraged to express their experiences with
Starbucks’ history, and the company strives to “personally” join in the discussions.

Ii -Operations management strategy

Starbucks has positioned itself as a supplier of moral premium low merchandise and pleasant, luxurious
meeting places for folks. So, its costs area unit relative high and it competes on a singular price
proposition. Commitment to the most effective quality and high moral standards area unit evident in
each step of the provision chain, from bean procurance to service (Jennings, 2009).

Starbucks’ offer chain starts from bean sourcing. to make sure compliance with its rigorous low
standards, it controls low buying, cookery and packaging, and therefore the international distribution of
low. Starbucks pays over the value for its beans so as to obtain premium beans. Besides getting the very
best quality low, the ethics of paying a good worth for low producers provides AN moral facet to the
worth proposition (Rubin, Deardorff and Brown, 2010). Starbucks additionally has the experience to
secure top-notch low beans to produce the company’s growing wants. All this enables Starbucks to
serve low that's of superior quality compared to competitors.

As a part of its sourcing strategy, Starbucks entered into fixed-price purchase commitments so as to
secure AN adequate offer of quality inexperienced low beans and to limit exposure to unsteady low
costs (Starbucks, 2010). once satisfactory fixed-price commitments weren't obtainable, the corporate
purchased low future contracts to produce worth protection. still, there are occasions in years past once
surprising jumps in low costs place a squeeze on the company’s margins and necessitated a rise within
the costs of its beverages and beans sold at retail worth. However, by this approach, Starbucks will sleek
prices and avoid worth hikes within the stores that might have a devastating result on the company’s
image.

Starbucks deems store operations as a vital a part of strengthening the company’s name and image. the
corporate shaped a bunch to make a store development method to make sure that every store conveys
the acceptable image and character. Then, info the knowledge the data} and software package of
Starbucks permit it to speak information throughout the organization to extend the standard of
selections and potency in value-chain activities (Gamble & Thompson, 2011).

Starbucks additionally tries to develop the company’s whole through its specialty operations with third
parties outside the standard restaurant. This includes commissioned Stores, prepacked Tea and
occasional, Branded merchandise and Foodservices Operations. In 1997, Starbucks began moving into a
restricted range of licensing agreements for store locations in areas wherever it failed to have the power
to find its own shops. for instance, commissioned Stores with Marriott Host International and Aramark
Food and Services place Starbucks stores in flying field locations and on university campuses. Starbucks
received a license tax and a royalty on sales at these locations and equipped the low for merchandising
within the commissioned locations.

International expansion strategy

Starbucks, international enlargement started in 1995 and its international enlargement strategy is to
produce licenses or produce joint ventures with honorable native firms, that square measure equipped
with merchandising ability within the target country (Garza, 2010).. This strategy is constructed upon the
growing name of the Starbucks complete and therefore the ability to spot enticing store locations. The
international enlargement strategy is additionally supported by centralized shopping for, normal
contract development and stuck fees sure enough things, and consolidated work beneath contractors
with smart cost-control practices (Alberto, 2011c). Starbucks’ product provide is additionally a key
within the successful enlargement. As according by the Wall Street Journal (2006), the Starbucks
Corporation is increasing at a really high rate and that specialize in China. This company has sharply
campaigned to become the leading low within the us and when attaining this, it's created additional
steps to considering world leadership.

The enlargement and growth of Starbucks has been accepted, particularly by its wishes to venture in
rising economies. Currently, the Starbucks Corporation is retrenchment within the U.S.A. as a results of
the economic worsening during this country and its increasing world enlargement. In 2008, this
company closed quite 600 low outlets across the U.S.A. Since the necessity for international low has
magnified, Starbucks is gap up one,000 low outlets across the globe particularly in Asia. Starbucks’
enlargement strategy was well thought out: the strategy target was within the Asian Pacific, far-off from
Europe and Latin America wherever low outlets competition is incredibly robust. because the diagram
below shows, the revenue from the U.S.A. market is shrinking and therefore the operational financial
gain of the EMEA market became negative in 2010 and 2011, whereas the market of China and
therefore the Asian pacific shows smart potential. Therefore, China is Starbucks’ largest target, because
it is predicted to be the most important growing market over ensuing 2 years (Starbucks, 2011). when
the worldwide economy recovery, Starbucks is getting to open a median of quite one store on a daily
basis. Starbucks continues to shut domestic stores that have already saturated the market, and replace
them with international stores abroad.

Starbucks is in a position to enter into Asian markets and China especially by targeting China’s social
class and delivery new lifestyles whereas maintaining low and different beverages as cheap luxuries.
Barraclough (2006) reports that the Chinese square measure celebrated for his or her increasing
preference for low and thus Starbucks is in a position to win over additional customers to require low.
Yankee product and lifestyle square measure extremely loved by the Chinese and Japanese, and thus
customers there adopt Yankee trends and product simply and quickly. this means that Starbucks is
creating use of the Chinese culture to enter China’s market (Hooting, 2009).
However, the fast international enlargement conjointly has negative effects. initial of all, too several
new locations established would exert Associate in Nursing adverse impact on client service. Therefore,
the client expertise might degrade. Secondly, some retail stores opened even before the native provide
chain was totally designed up, resulting in unhealthy client perceptions towards Starbucks low and food.
Thirdly, the strategy of closing down U.S.A. locations to offset new growth abroad leads to reducing the
convenience consider the U.S.A. market. several Yankee customers got to drive a protracted thanks to
purchase a cup of beloved Starbucks low. As mentioned antecedently, the convenience is one in every of
most vital components of its worth proposition. Last however not the smallest amount, the big range of
stores may be a immense quality or liability, counting on however one assesses things. If there's a robust
economy and other people have income, then it's a plus to possess lush stores to get revenues. On the
opposite hand, the large range of stores can become a large monetary liability throughout economic
downturns. Therefore, currently Starbucks, LED by Schultz, advocate the disciplined enlargement of
store bases and concentrate on real, property growth.

SFAS
Strategic Factor Weight Rating Weighted
Score
S1. Brand 0.15 4 0.6
S2. Gross 0.15 4 0.6
W1. General standardization 0.5 2 1
W2. Prices 0.1 1 0.1
O1. Expansion 0.2 4 0.8
O2. High potential for 0.5 2 1
courtesy coffee products
T1. Increase competition 0.15 1 0.15
from local coffee companies
T2. Increasing price 0.1 1 0.1
sensitivity of starbuck
customers

Starbucks’ SWOT Analysis

Starbucks’ Strengths
• Brand: The most popular brand in the food and beverage industry;
• Financial performance: Annual revenue over $26 bi;
• Growth: Each year, new stores are open somewhere on the planet (32,660
currently);
• Supply chain: Extensive global supplying network, with coffee beans from
Latin America, Africa, and Asia;
• Quality and standardization: Premium blends and coffees are consistently
standardized in all its locations;
• Strategic planning: Starbucks reinvests its profits in business development;
• Employee treatment: Starbucks is often listed as one of the best places to
work for;
• Gender-neutral restrooms: To protect the LGBTQ+ community against
discrimination.
Starbucks’ Weaknesses
• Prices: For many consumers, Starbucks is more costly than some
competitors, such as McDonald’s;
• Imitability: It is quite easy for the competitors to replicate its products;
 • General standardization: Some products don’t associate with the locals’
preferences;
• Recall of products: It has recalled several in-demand products, affecting the
brand image.
Starbucks’ Opportunities
• Expansion: Most of its coffeehouses are in the U.S. Therefore, emerging
economies are a great opportunity for expansion;
• Diversification: Developing products according to the specific target market’s
preferences;
• Partnerships: Co-branding could increase its market share;
• Price differentiation: Offering regular coffee to capture the middle-class;
• Online channels: Strengthening its online channels to attract more customers
for pick up locations;
• Delivery: It can start its own delivery service, instead of using Uber Eats and
alike;
• Subscription: It could start some coffee subscription services to expand its
customer base.
Starbucks’ Threats
• Competition: Many coffeehouses offer cheaper products. Besides, there are
strong competitors such as multinational companies (Dunkin’ Donuts and
McDonald’s for example);
• Imitation: Their products can be easily reproduced;
• Third-party suppliers: There are many contractors and stakeholders, which
makes it hard to manage the whole chain;
• Recession: Starbucks’ revenue has already dropped, especially after
temporarily closing many stores due to the pandemic;
• Coffee beans’ rising prices: The price of Arabica (the most-produced coffee
in the world) has raised drastically during the covid-19 pandemic.

VRIO analysis
Resource Valuable Rare Inimitable and Organized to Impact on
capability non- exploit competitive
substitutable advantage
Strong global Yes Yes Yes Yes Realized
presence sustainable
competitive
advantage
 Specialty Yes No No Yes Realized
coffees competitive
parity
Upscale and Yes Yes No Yes Realized
cozy temporary
atmosphere competitive
advantage
•

Internal factor evaluation matrix (IFAS)

• Internal
strategic forces
• weight • score • total comments •

• score
Strengths • The most
• 0.15 • 4 • 0.6 popular brand in
•
-brand
the food and
beverage industry;
Financial • Annual
Performance
• 0.1 • 3 • 0.3 revenue over
•

$26 bi;

•
• growth • Each year, new •
• 0.15 • 4 • 0.6 stores are open
somewhere on
the planet
(32,660
currently);

• Supply • Extensive
chain
• 0.1 • 4 • 0.4 global supplying
•

network, with
coffee beans from
Latin America,
Africa, and Asia;
• Quality and Premium blends
standardization
• 0.1 • 4 • 0.4 and coffees are
•

consistently
 standardized in all
its locations
• Strategic • Starbucks
planning
• 0.05 • 3 • 0.15 reinvests its profits
•

in business
development
• Employee • Starbucks is
treatment
• 0.05 • 4 • 0.2 often listed as
•

one of the best

places to work
for;

•
• Gender- • protect the
neutral
0.05 3 0.15 LGBTQ+
•

restrooms community
against
discrimination.

•
• Weaknesses •
•

• Prices • For many

0.1 1 0.1 consumers,
•

Starbucks is
more costly
than some
competitors,
such as
McDonald’s
• Imitability • It is quite easy
0.1 1 0.1 for the
•

competitors to
replicate its
products
• General • Some products
standardization
0.05 2 0.1 don’t associate
•

with the locals’

preferences;
•

Total 1.00 3.10 •

•
 • The IFAS matrix has resulted in a final score of 3.10
which scores significantly above 2.5 and this indicates a
strong internal position.
TOWS

Starbucks’ TOWS Analysis

Internal Factors Strengths Weakness

1. Profitability 1. Uneven Worldwide Distribution

2. Brand Recognition 2. Product Pricing
3. Global Presence 3. Sustainability
External Factors

Opportunities SO OW

1. New Markets 1. Re-invest profits in New Markets 1. New Markets will balance
2. New Product and Services 2. Use its brand to sell new products distribution
3. Purchasing Companies 3. Expand global presence by 2. Lower prices for new products
purchasing companies 3. Purchase Companies to survive

Threats ST WT

1. New Entrants 1. Offer better stake holder value 1. Entry into new countries before
2. U.S. Market Saturation 2. Ensure a strong foundation competition
3. Changes in Customer favor 3. Introduce to more people worldwide 2. Lower prices in Asia
3. Engage the customers with
constant rewards

SO-

• Market the brand heavily within the less penetrated areas.

 • Use the global brand image to increase presence in rising economies.
• Extend the product combine mix maintaining the main focus on product quality.
• Partner the other well-known brands within the Asian markets to penetrate the market quicker.
Mutual profit for each from each other’s capabilities.

WO-

• Release medium priced products to attract middle class customers in larger numbers and
increase sales in the Asian countries.

ST-

• Focus on marketing and advertising to attract and retain more and more customers and reduce
competitive pressure.
• Marketing to the millennial generation to capitalize on changing demographic trends.
• Advertising the quality of products to differentiate from competing brands and reduce the
challenge due to imitation.
• Marketing the ethical image of the business to reduce competitive pressure.

WT-

• Release a range of low cost products to minimize the cost challenge from the competing brands.
• Marketing the quality of its premium products to minimize the threat arising from imitation by
the opposite brands that sell it cheaper.

QSPM
Market Market
Wei Penetration Development
Factors
ght Attract Total Attracti Total
iveness WS veness WS
Strengths
S1. Financial performance 0.1 3 0.3 4 0.4
S2. Brand 0.15 4 0.6 4 0.6
S3. Gross 0.15 4 0.6 3 0.45
Weakness
W1. General standardization 0.5 2 1 3 1.5
W2. Prices 0.1 1 0.1 3 0.3
W3. Imitability 0.1 1 0.1 3 0.3
Opportunities
O1. Expansion 0.2 4 0.8 4 0.8
 O2. High potential for courtesy coffee products 0.5 2 1 3 1.5
O3. High growth potential 0.1 3 0.3 4 0.4
Threats
T1. Increase competition from local coffee companies 0.15 1 0.15 4 0.6
T2. Saturated markets in developed economies 0.05 2 0.1 3 0.15
T3. Increasing price sensitivity of starbuck customers 0.1 1 0.1 3 0.3
Total Score 5.6 7.3
•
• Both are above 3 which it means that these alternative strategies can be included in the future

Starbucks Strategy Formulation

Mission:

Starbucks mission statement “In everything we do, we are always dedicated to Our Mission: to
inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time”.

• Providing a great work environment.

• Holding the diversity as an essential business.
• Purchasing and roasting applied in the highest standards.
• Make sure the customers are satisfied.

Vision:
 Starbucks vision statement is “To establish Starbucks as the premier purveyor of the
finest coffee in the world while maintaining our uncompromising principles while we
grow.”

• It outlines the critical achievements the company must realize to rank and
maintain itself as a top brand within this sector.
• Become a global company with values and guiding principles that employees
could be proud of.
• The Vision focuses on the way people should be treated.
• This begins with staff members and ends with satisfied customers.
• Starbucks can modify its vision statement by including that the company will set
the taste standard.

STRATEGY IMPLEMENTATION

FUNCTIONAL FUNCTIONAL Procedures Required KPI’S

AREA Objective actions polices resources
Structure To remain its Assignment of Build strong High profit
structure strong responsibilities structure
and division on
tasks
Strategy Create a Always working to New products Increasing sales
competitive improve and Improving service
advantage create a
competitive
advantage from
their competitors
System Strong system Using strong sales Networks to Increasing profit
system ensure accuracy
skills Efficiency Choose qualified Qualified workers Increasing profit
workers able to with strong sales
get the job done skills
efficiency
stuff Provide excellent Division of tasks Well educated Increasing sales
service and stuff and
responsibilities organized
style Cooperation not Create a Reward system Increasing profit
competition cooperation spirit
between the staff
Shared values Working in teams Frequent training Training sessions Increasing sales
to achieve main sessions from the
goal branches
managers