ucks. MGM 4139 STRATEGIC MANAGEMENT CASE STUDY by : Anaseri Zulkifli EX2833 Hafizullah Mohd Amin EX2906 Michelle Lim Li Yoke EX2885 Mohd Osman Mohd Hassan EX2894 Mohd Johan Khair Azmi EX2889 Rashidi Jaffri Jaafar EX2815 2. In this case, Starbucks uses high pricing to differentiate itself from the rest of the competition (Starbucks, 2011). This study discusses the internal and external business ethics practiced at Starbucks Corporation. Thus, the firm satisfies this stakeholder groups interests. . External stakeholders include clients or customers, investors and shareholders, suppliers, government agencies and the wider community They want the company to perform well for a multitude of reasons. Puyt, R., Lie, F. B., De Graaf, F. J., & Wilderom, C. P. (2020). Password (8+ characters) . Starbucks suppliers are composed of wholesale supply firms and coffee farmers. Need a custom Case Study sample written from scratch by Compensation is an important aspect of employee happiness and at Starbucks, 62% of employees feel they are paid fairly, 80% are satisfied with their benefits, and 75% are satisfied with their stock/equity. The two main competitors of Starbucks are MacDonalds McCafe and Dunkin Donuts. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). (2011). IvyPanda. Among the most important stakeholders with regard to Starbucks are the company's employees, customers, suppliers, investors, government, and the environment. Based on the current condition of the business, some of the most notable strategic management concerns enumerated in this SWOT analysis of Starbucks Coffee Company are the imitability of products and the corresponding threat of imitation, the threat of competition involving low-cost sellers, and independent coffeehouse movements. 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. Our responsibility starts with being accountable to Starbucks stakeholdersour partners, customers, shareholders, suppliers, community members and othersand communicating openly . 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). 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. Starbucks could also consider partnering with other unrelated firms such as airlines and multinational retail chains like IKEA and Wal-Mart, car washers, and cinemas. CIB Assignment - Starbucks Case 1. Customers 3. Cateora, P., Papadopoulos, N., Gilly, M., & Graham, J. The company contributes to different non-profit organizations in a bid to enhance brand awareness and image among local communities. Starbucks's Weaknesses (Internal Strategic Factors) Business weaknesses are identified in this component of the SWOT analysis. (2007). Mason, A., Cole, T., & Goza, N. (2017). The company has even been involved in lawsuits because of these protests. Higher business diversification to include operations related to food, beverages, and merchandise. The firm can improve its corporate social responsibility performance by addressing such issue in this stakeholder group. Such sociocultural trends influence consumer perception and purchasing behaviors, as shown in the PESTEL/PESTLE analysis of Starbucks Corporation. (2021, August 4). 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. The firm knows that a loyal customer is often a reliable source of revenue for the firm for many years, and hence viable business. of caffeine, over four times the amount of caffeine 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. Internal stakeholders are those persons or organizations who have some sort of vested interest in the company's success. In the absence of internal stakeholders, the organisation will not be able to survive in the long run That is why they have a great impact on the company. Shaoul, J. To have a positive impact on the communities it works with and in, Starbucks develops community stores that partner with local nonprofits The nonprofits these stores work with offer services aimed to meet the needs of the communities theyre located in. The company has tried to change the formula of some of its products to suit the tastes and preferences of customers in certain markets (Patterson, Scott & Uncles 2010, p. 44). Design Your Materiality Survey. Until very recently, Starbucks has relied on word of mouth and its large store presence as its advertising and promotional and advertising tools (Patterson et al., 2010, p. 45). Technological improvements can enable a company to market its products directly to their target market using emails, text messages, and social network sites as well (Moreno, 2008). The company has had to contend with various legal, political, economic and social factors as it undertakes its business activities. This is an expensive way to capture attention, but . The first Starbucks store opened on December 4, 1997 at 6750, Ayala Avenue. Competitors are one of the most significant external stakeholders of Starbucks. Internal stakeholders include the owners, managers, employees and investors of a company. We hope the article Stakeholders of Starbucks (Stakeholder analysis of Starbucks) has been helpful. Stakeholders Businesses have different types of internal and external stakeholders, with different interests and priorities. 1. 1 the most of the stakeholders that were identified for CSR represents based on the stakeholder power-interest matrix key players with higher level of both dimensions. This has seen Starbucks launch the Starbucks Card (Starbucks, 2011) to facilitate customer loyalty. A systematic review. . In order to communicate effectively with customers, Starbucks needs to be aware of their differences what they care about and the ways in which they want to be communicated with. The Customers can be considered as the most important external stakeholders. Our risk assessment, supply chain and corporate social responsibility teams also monitor for landscape changes and emerging risks on a continuous basis. In 2014, Starbucks boosted its CSR performance for this stakeholder group by giving scholarships to employees based on a partnership with Arizona State University. Washington, D.C.: Department of Labor. Consider the importance for Starbucks of developing long-term relationships and alliances with different stakeholders. Wall Street Journal, p. A14. McDonalds challenging Starbucks with cheaper coffee drinks. Washington, D. C.: World Bank. Good organisations are mainly based on cultivating customer retention relationships, as opposed to the acquisition/transaction mentality. Stakeholders, Mission, and Vision. Starbucks works with many suppliers around the world. Also, Australian coffee drinkers had already developed a more sophisticated palate following years of drinking coffee, meaning that they demanded stronger and straighter flavor that did not require the use of flavors and syrup shots to disguise the taste. Internal stakeholders include your board of directors, upper management, and other departments in your company that may influence your flow of resources (e.g., human resources, finance team, etc. Measuring performance using SWOT analysis and balanced scorecard. Farmers aim to increase coffee yield to generate more revenues. External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. Essay Example on Starbucks . The main difference between internal and external stakeholders is that internal stakeholders have more . Starbucks mission statement is: "To inspire and nurture the human spiritone person, one cup, and one neighborhood at a time". If you're considering conducting a materiality assessment, below we offer seven basic steps that should be a part of your initiative: Identify Internal and External Stakeholders. Starbucks imports coffee beans from different countries and each of these countries has its own tariff and customs regulations. Common examples of internal stakeholders in companies are senior management, project sponsors, and project team members. Suppliers. (2011). Also, this SWOT analysis considers imitation as a major threat against the coffeehouse business. External stakeholders are entities that don't belong to your organization but are impacted by or impact your performance. It took out an eight-page ad in the Wall Street Journal declaring its new vision, a message directed at both customers and internal stakeholders. Diversification is currently a minor growth strategy as shown in Starbucks Corporations generic competitive strategy and intensive growth strategies. Thus, Starbucks corporate social responsibility efforts comprehensively address the interests of this stakeholder group. The company had previously relied on word of mouth and a strong global brand as part of its marketing efforts However, with competition getting stiffer by the day, Starbucks has had to employ various promotional strategies such as the use of loyalty cards. The report recommends that Starbucks should consider forming partnerships with local coffee companies to avoid failure owing to cultural differences and business principles. Successful marketing campaigns and branding strategies are needed to counteract the effects of these trends. For example, Starbucks Corporations marketing mix or 4P indicates product mix expansion to include tea, food, and merchandise, in addition to coffee. The purpose of the report is to examine the external and internal analysis of Starbucks. Corporate Governance. Starbucks organizational culture emphasizes the employees-first attitude. 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. By contrast, external stakeholders include suppliers, governments, customers, trade unions, and creditors. Some companies listed short strategic priorities like "invest in infrastructure" or "international expansion" without elaborating on the meaning of these objectives. 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. This detailed piece of work identifies some of the internal and external stakeholders of Starbucks. (2021, August 4). Kato, T. (2022). These suppliers include farmers, traders, and roasters. This opportunity draws attention away from the U.S. market, where most of the coffeehouse companys revenues are generated. Bottom Line, 26(4), 28. Through the use of technology, Starbucks has managed to change its product mix to suit new market segments. Starbucks has implemented different strategies to keep its customers coming back. Innovation can make the companys products more difficult to imitate. In. External stakeholders are individuals or groups outside an organization who are vested interest in a company's success. Does Temperature Matter For Pour Over Coffee? . In order to stay competitive, Starbucks redefined its strategy and changed its risk appetite. Simply put, if you stay employed by Starbucks for at least one year from the grant date with no breaks in service, youll receive the first half of your Bean Stock If you remain employed two years from the grant date, youll receive the second half. Governments. In addition, any political upheavals in the countries where Starbucks imports its coffee beans would greatly interfere with the companys operations. Considering that Starbucks coffee is priced at a premium, the fact that baristas and the staff had limited time to engage with customers was proving to be counterproductive to the very premises on which Starbucks was built. - Starbucks Coffee We going to look. Stake: Product/service quality and value, #2 Employees. Starbucks, American company that is the largest coffeehouse chain in the world. External stakeholders still experience the effects of the business's activities but rarely hold any shares or ownership of the company. Investors have interests in high financial performance of the company. 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. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. strategic commitments "Starbucks Company's External and Internal Analysis." From there it . 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. Internal stakeholders include employees, board members, company owners, donors and volunteers. Starbucks does a great job at listening to their consumers with their twitter handle @mystarbucksidea This twitter handle is used to circulate ideas that users have submitted and voted on to be implemented. On the other hand, Dunkin Donuts offers customers a variety of coffee flavors to choose from, in addition to its emphasis on quality (Dicarlo, 2004). 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. What Is In A Starbucks Caramel Macchiato? You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. Thus, the companys comprehensive corporate social responsibility efforts can be improved to address this stakeholder group. (2021) 'Starbucks Company's External and Internal Analysis'. World Bank. Copyright 2017 2025. All rights reserved LCHW. Starbucks is a global coffee company that has been in business for over 50 years. The revenue growth in 2010- 2014 was at a . How Much Caffeine Is In A Starbucks Mocha K-cup? The employees impacts Starbucks by producing one of the company's most important outputs, what the company terms the Starbucks Experience. (2008). The community may also be worried about how this would affect unemployment rates and other racial inequality issues in their neighbourhood. First name. In 1992, Starbucks became a publicly-listed company. They are not employees and do not have any direct financial interest in the profit or loss of the company. This competitive environment requires that the company continuously improve its business strengths to optimize its financial performance and growth trajectory. (2010). Thats the role a small group of social media strategists has taken on for Starbucks partners (employees) who communicate with each other through Facebook, Twitter and Instagram. 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). For Starbucks, its major stakeholders include employees, customers, suppliers and stockholders Starbucks performances and business strategies could also affect the general public and the society. The company has a long-term commitment to sustainable coffee farming practices and is committed to paying a fair price for beans. Imitability of products, especially beverages. These consist of everyone involved in management, marketing, designing, manufacturing, assembly, and general sales. Its Starbucks. It is a place where customers can submit and discuss their ideas to make Starbucks better. A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______. 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. Jolanda Logan Consulting (JLC) is a boutique consulting agency led by Jolanda Logan, a strategic, business-minded communications professional with more than 25-plus years of progressive experience . 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. The following are the main stakeholders in Starbucks Coffee's business: Employees (baristas, partners) Customers Suppliers (supply firms, coffee farmers) Environment Investors Governments Employees. Australasian Marketing Journal, 18, 4147. Houston Chonicle, 1. Such an image can help reduce sociocultural opposition against the companys expansion. This study explores how perceived external CSR (efforts directed toward external stakeholders) and perceived internal CSR (efforts directed toward employees) activities influence . Internal stakeholders are people who are on the inside of the business that already serve the organisation these include staff managers board members etc. For CCPA and GDPR compliance, we do not use personally identifiable information to serve ads in California, the EU, and the EEA. Critical financial analysis and accounting for stakeholders. 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. (1998). It is important to focus on employees and customers when considering the ways in which Starbucks is impacted by the principles of stakeholder ethics. CONSUMERS / Blending coffee and frugality / A once-piping-hot trend cools off as java lovers try to economize. However, Starbucks needs to improve its CSR performance to reach a 100% CAFE-certified supply chain to maximize environmental benefits. Eventually, Starbucks failed to take appropriate risk mitigation processes and faced decreasing incomes in 2008. Starbucks failed to adequately analyze the existing coffee culture in Australia, and this could have precipitated its failure. Two of the most common methods of shipping coffee are by sea and by, Rich espresso, milk and vanilla syrup are topped with caramel for a delightfully refreshing start to your day., But if you want to get the most out of your coffee, use freshly ground coffee It makes. Starbucks cut costs of at least $500 million, closed 800 stores in the U.S. and laid off more than 4,000 employees. Ontario, Canada: A & I. Patterson, P. G., Scott, J., & Uncles, M. D. (2010). Summary of Stakeholders of Starbucks (Stakeholder analysis of Starbucks). It is characterized by multiple, overlapping chains of command and divisions. Business weaknesses are identified in this component of the SWOT analysis. These shops provided personalized, individualized and intimate service, something that Starbucks could no longer provide. IvyPanda. 7 Examples of External Stakeholders. 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. On the one hand, McCafe maintains a low price strategy o its products (Burritt, 2007). Starbucks Coffee Company (Starbucks) was established in 1971 as a fine coffee retailer by three academics in . Which of the following are aims of stakeholder strategy? Identify and Prioritize What You Want to Measure. Currently, 90% of Starbucks supply is from CAFE-certified farms. Streamline effective communication to keep internal and external stakeholders systematically and proactively informed of project progress. Summarize the primary and secondary ethical issues(s) involved. In the case of Starbucks, the companys logo still retains the mar maid image that was adopted upon its inception in 1971. Starbucks Corporations weaknesses are as follows: Starbucks has high price points that maximize profit margins but reduce the affordability of its products. Internal and External Stakeholders. External stakeholders comprise of the customers, competitors, suppliers, creditors, public and the government. The business operations of Starbucks will also be affected by local and federal laws and regulations. On the other hand, external stakeholders include customers, clients, business partners, suppliers and shareholders. External stakeholders are those who do not have a direct tie to the company. 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. 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. August 4, 2021. https://ivypanda.com/essays/starbucks-5/. Pepsico will market and distribute Starbucks products in several Latin American countries for 2016. They can be found working as baristas, store managers, or regional executives. The related pricing strategy, an internal strategic factor, is a weakness because it limits the coffee companys market share, especially in areas with relatively lower disposable incomes. TASK # 1: Nestle is one of the leading brand in Pakistan. A companys shareholders are the people and organisations who invest in it and share in the benefits or losses of ownership. Grow Together, 3. The company implemented the C.A.F.E program with a view to addressing issues raised by customers regarding Starbucks social reasonability (ICO, 2011). Once you own the shares, you can hold or sell them its up to you. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). Cateora, P. R., Graham, J. L. (2007). Companies keen on venturing into the international market must be prepared to encounter various obstacles (Cateora et al 2011). Strategic planning that accounts for the internal and external factors shown in this SWOT analysis can increase Starbucks Coffees success in competing against various coffeehouse firms and other food service businesses, such as Dunkin, McDonalds, Burger King, and Wendys. The structure is fairly similar to Westpac's Code of Conduct, as it outlines four major values and how they achieve it. fourth. Coffee drinkers in Australia can be discerning and are therefore not easily dissuaded by foreign coffee companies (Patterson et al., 2010). Regional and state unemployment 2010 Annual averages. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. IvyPanda. External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. This SWOT analysis of Starbucks Coffee considers the strengths and weaknesses (internal strategic factors) inherent in coffee, coffeehouse, and related businesses. Please share the article link on social media to help us continue with this free academic research. Seattle, Washington, Starbucks is the world's largest coffeehouse chain, A Starbucks grande coffee has 320 milligrams It is so successful because it was able to provide an experience that changed how much of the world thought about coffee shops and how many of us drink coffee outside of our homes. These are standard stakeholders of almost every business that operates in the United States or overseas. Strategic Operations Management a value chain approach. 100% pure kona coffee is distinguished from all other coffees by its unique island microclimate and extra care, starbucks cups for keurig pods have the following amount of caffeine: Standard pod: 130mg per 8 fluid ounces, auto-drip coffee is the coffee that you make in a homebrewer that automatically controls the brewing duration and, Can coffee be shipped? This part of the SWOT analysis of Starbucks Coffee Company identifies external strategic factors that impose challenges to international expansion and market penetration. The internal customers will be the people that work within the business of Starb. Customers are the most important stakeholders of Starbucks. The success of any service firm largely depends on the ability of the organisation in question to target, acquire, get hold of, and retain keep the right customers. Although Starbucks was very successful in the United States, this success was not replicated in the Australian market.
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