+ 44 20 8144 3706Part 1- Business environment analysis
Introduction to Starbucks and competitive position:
Starbucks is the largest coffee chain in the US market and it is known across the globe for preparing high quality of coffee for customers. Starbucks was established in the year 1971 by three businessmen to sell high quality coffee beans in the market. In the year 1981 Howard Schultz decides to develop a strong company and expand the coffee business under name Starbucks. The mentioned company focused on consumer habits and accordingly serves coffee too them. This is the reason behind the company huge business success. Specialty coffee covers 50% of Starbucks revenue and 30% of total cups consumed on mentioned company premises. Currently, the company has more than 28000 stores across the globe. There are multiple products that company offered to the customers in its premises like varied variants of coffee, soft drinks, snacks and a few variants of Tea. This reflects that firm by considering multiple sorts of people is maintain its product portfolio (Garthwaite and et.al., 2017). Company earns revenue of $26,508 million and firm operating income is $4,077 million. Net income earned by the company is $3,594 million. Total assets in the business are $19,219 million.
There are many competitors of Starbucks in the coffee market and some of them are Mc Donald, Costa Coffee, Dunking Donuts and Luckin Coffee. Starbucks consistently focuses on specialty coffee and for this its target customers are high and middle income families. The firm is offering specialty coffee at higher prices then rivals. Relative to rival firm is also offering much better quality of coffee to the customers in its premises. The company has a strong network with local suppliers in different nations who grow coffee in a congenial environment (Susanty and Kenny, 2015). By using coffee beans purchased from them firm make available specialty coffee to the people. Other rivals also prepare specialty coffee, but they do not have a network in varied nations like Starbucks have. Starbucks is following product differentiation strategy and under this it consistently does an experiment. This assists firm to innovate its product line and remain ahead of rivals and also develop competitive advantage in its business. Rivals have limited product lines in the coffee market and due to this reason Starbucks is ahead of them.
Starbucks have a number of outlets and all of designed in a systematic way which make company premises good place to enjoy coffee and free time with friends. Firm highly supports trained staff, which interacts with the customers and provides them information about coffee beans taste (Vanharanta, Kantola and Seikola, 2015). Moreover, firm its own IT system which assists companies to improve its business constantly and offer more personalized products to the customers on its app on mobile. Majority of rivals are not making effective use of IT to capture coffee market. Thus, use of IT helps Starbucks to remain ahead of rivals.
Part 2 – Stakeholder Report:
Priority group:
Customers are the one of the main important stakeholder because of them firm is earning revenue in its business. Starbucks since its inception is focused on observing consumer behavior of the people and according to its company serve products to the customers. This is the main reason due to which firm has a loyal customer base in its business. Out of entire public firm give top priority to those who comes in higher income level category. This group of people majorly consumes specialty coffee in Starbucks chain. Today, specialty coffee covers 50% of total company revenue. Hence, due to this reason high income individuals are a high priority group for the Starbucks (Thompson, 2017). In terms of other demographic factors those who are above 20 to 40 are the target customers of the firm. Youngsters are also on top priority for the firm.
Employees and managers also come in the priority group of the business firm because efforts they make are the main reason behind company success. Managers analyze company’s business operations and if they identify any point where work is not done properly they immediately take action. Employees work with full efficiency and due to this reason they are able to serve customers in a better way. Starbucks top leadership also state many times that satisfied employees are the key of the company success.
Power influence and interest groups:
Suppliers have an interest in the company because it is the Starbucks that make purchase of raw coffee beans from the local farmers or suppliers. Growth of the company business means more demand means more revenue for the farmers in their business. Thus, supplier’s interest in the company is heavy and Starbucks performance directly affects their economic condition. Investors and creditors have influence in the company (Mercera, 2015). This is because shareholders by making investment in the company become its owners and if they have higher stake then in that case they can control firm operations by participating in company meetings and influencing Starbucks board members’ decisions. On the other hand, creditors are another important stakeholder who have an interest in the company and also have influence sometimes when the firm failed to pay interest on time for them. Creditors have more interest and little influence on the company
Communication strategy:
Starbucks communicates with its customers in multiple ways. Starbucks employees personal contact with the customers and they educate them about coffee beans and varied coffees that are in the menu. Starbucks time to time also advertises its brand and its launch many offers which are communicated to the individuals through social sites or through the premises by placing boards. In this way firm do effective communication with the customers who are company important stakeholders. The company communicates with its stakeholders through its annual general meeting where it in detail describes varied things to them. Apart from this, if any stakeholder likes creditor or large size investor has any query they easily hold a meeting with the company top leadership. Hence, it can be said that Starbucks is following the appropriate communication strategy in its business.
Reference:
Books and Journals:
Atzori, R., Shapoval, V.. and Murphy, K. S. 2018. Measuring Generation Y consumers’ perceptions of green practices at Starbucks: An IPA analysis. Journal of foodservice business research. 21(1). 1-21.
Bangcuyo, R. G. and et.al., 2015. The use of immersive technologies to improve consumer testing: The role of ecological validity, context and engagement in evaluating coffee. Food Quality and Preference. 41. 84-95.
Berger, K. A. and Blake, L. J., 2016. Starbucks Enters India: The Indomitable Competitor or Underdog?. Journal of Case Studies. 34(2). 75-91.
Burdan, F. 2015. Caffeine in Coffee. In Coffee in health and disease prevention (pp. 201-207). Academic Press.
Campbell, K.. and Helleloid, D. 2016. Starbucks: Social responsibility and tax avoidance. Journal of Accounting Education, 37, 38-60.
Dorn, M., Messner, C.. and Wänke, M. 2016. Partitioning the choice task makes Starbucks coffee taste better. Journal of Marketing Behavior. 1(3-4). 363-384.
Garthwaite, C. and et.al., 2017. Starbucks: A story of growth. Kellogg School of Management Cases.
Haskova, K. 2015. Starbucks Marketing Analysis. CRIS-Bulletin of the Centre for Research and Interdisciplinary Study. 2015(1). 11-29.
Jo, A.. and Kim, H. S. 2017. A comparison of Starbucks between South Korea and USA through big data analysis. Culinary science and hospitality research. 23(8). 195-205.
Karman, M. A. 2015. The impact of social media marketing on brand equity toward the purchase intention of Starbucks Indonesia. iBuss Management. 3(2).
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