Course Study Statement On Strategic Management of Starbucks

The report is based on the understanding the type of the strategy of the business and the several strategies of the organizations. This includes the evaluation of the strategies accompanied by the organization and the quest and the eye-sight statements of the organization. The report is developed on the Starbucks Corporation. The organization is facing decreased sales and the closure of the stores of the organization worldwide. This statement will analyse the inner and the exterior environment of the business to analyse the reason why of the closure of the stores of the business. The past step is the development of the alternate tactical options which the organization may use to develop the market position of the organization as it was before 2008.

Contents 4

Introduction:- 5

Critical incident:- 5

Mission declaration of Starbucks organization:- 5

Core Ideals of the business:- 6

Strategy:- 6

Schools of strategies:- 7

Perspective approaches:- 7

Strategy of the Starbucks:- 9

Positioning strategy of Starbucks:- 9

Problem Analysis:- 10

Internal analysis of organization:- 10

SWOT Evaluation of Starbucks:- 10

Weaknesses of the organization:- 11

Opportunities:- 12

Threats:- 12

External environmental analysis:- 12

Economical condition:- 13

Social Factors:- 13

Technological Factors:- 13

Strategic Planning Models:- 13

Basic Strategic Planning:- 13

Strategic Position model:- 15

Scenario Planning Models:- 15

Organic planning model:- 15

Recommendations:- 16

Review of the strategies of the business: 16


Starbucks Corporation is an international Coffee house and the Caffeine chain based in the Seattle Washington. This is actually the biggest espresso house company on earth and it consists of 17817 stores in more than 49 countries worldwide. You will find 11000 stores of the business in the United States and the business has more than 800 stores in britain, apart from these the business is functioning more than 100 stores in Canada. Espresso-based hot refreshments drip brewed caffeine, coffees, other wintry and hot drinks, sleds, cool and hot Panini, pastries, mugs, snakes and tumblers are the primary products provided by the organization. The business is also dealing in the marketing of books, films and the music through the entertainment division of the organization and the hear music brand of the business. There are many products that your organization offers derive from the seasonal or sent at special locations according to the needs of the clients on the market. The organizations top quality ice-cream and espresso is also offered at the food markets. ( http://starbucks. co. uk/en-GB/_About+Starbucks/ )

After the formation of the business in the Seattle, Washington the company rapidly expanded and expanded the business enterprise of the organization nationally and then worldwide. In 1990s the Starbucks was starting a fresh store on the daily bases to be the largest coffee provider in the United States and in the planet as well. This development of the business persisted uphill the 2000. The business exposed first international store of the organization in Canada in mid 90s. The business was planning to open up 900 new stores in 2009 2009 but it must close 900 stores in USA due to reduced demand and the success of the organization. ( http://starbucks. co. uk/en-GB/_About+Starbucks/ )

This closure was due to the several issues targeted the business like the problems of the fair trade policies, marriage with the labour, environmentally friendly influences and the anti competitive techniques followed by the business.

Critical incident:-

The critical incident is the changes in the external environment of the business which led to the closure of the stores of the business in america due to the different issues targeting the business. These issues can be the criticism on the organizational reasonable trade regulations and practices, the organizations relationship with the labour and the other politics issues effecting the business. To cope with these issues also to sustain the market position of the business the company desire a strategy and a comprehensive plan to reduce this impact or to solve these problems.

Mission statement of Starbucks firm:-

The mission statement is the tiny sentence used by the organizations to describe in the simple and the concise terms regarding the reason for the organizational life. The mission assertion helps the organization in two ways. Inside the first step it provides the clear aims to the employees of the business and subsequently it motivates the employees and motivates them to realize these objectives by motivating them to innovate the new ways to improve the organizational strengths to realize these objectives.

The mission of the Starbucks is "To motivate the human heart- one individual one cup and one neighbourhood at a time". (http://starbucks. co. uk/en-GB/_About+Starbucks/Starbucks+Mission+Statement+-+Starbucks+UK. htm )

Core Worth of the business:-

To attain the objective of the business the Starbucks have developed the center business values of the organization to be followed while executing business and through the tactical decision making these aspects must be kept in mind. (http://starbucks. co. uk/en-GB/_About+Starbucks/Starbucks+Mission+Statement+-+Starbucks+UK. htm )

The core worth of the organization are as given below,

Our Caffeine: - The organization's quest is to provide the best quality coffee to the clients as it is portion them

Our Companions: - The business will treat and respect the partners of the business with dignity. The organization has relation with the lovers on good requirements.

Our Customers: - The organization's quest is to connect, uplift the lives and laugh with the customers of the business when they are connected to the business, even for simply a few moments.

Our Stores: - the stores of the organization are packed with entertainment and velocity of life, time faster plus some time slower and they are always full of mankind in the stores of the business.

Our Neighbourhood: - We are able to be a drive for positive action - combining our companions, customers, and the community to add every day.

Our Shareholders - We have been fully accountable to get each one of these elements right so that Starbucks - and everyone it details - can put up with and flourish.


"Strategy is the range and the route of the business developed for the long run to match the resources of the organization to the changing environment of the business, especially the needs of the customers and the market segments, to meet or even to attain the prospects of stakeholders of the organization. " (David Faulkner, 2002 )

The tactical management is different term as compared to the tactical planning. The tactical planning is the area of the strategic management. The strategy is more stable when compared with the set of plans of the organization. The planning ethnicities of the organizations are facing troubles in the changing surroundings of the organizations and they are less responsive to these changes. Michael porter described the idea of Management by Aims to cope with the changes in the surroundings of the business. Relating to Porter the best method of determine the strategy of the organization is the analysis of the internal and the external factors effecting the business. as the business is operating in the surroundings and the functions of the business are related and attached to the external environment therefore the corporation should critically analyse the external and inside environmental factors before decision making procedure for the organization. (David Faulkner, 2002 )

The professionals and the authors are concentrating on the holistic Way (the organizational and the surroundings relation) for the persistence of the organizational strategy.

The opportunity of strategy must include all organizational elements and these elements must be interred related to the other person and especially with the environment of the organization where the organization is working.

Only the mother board of directors of the organization shouldn't be involved in the proper development and implementation but the other users of the organization must also be contained in the process of tactical formulation and development of arrange for the execution of the strategy of the organization.

The approach followed by the business for the tactical formulation depends after the changes in the exterior environment of the business. There will vary techniques of strategy development used in several surroundings. (David Faulkner, 2002 )

Schools of strategies:-

The MInuberg explored on the proper management and developed the idea of ten different academic institutions of strategies which will vary in the manner and the procedure the strategies of the organization are varieties. These colleges are divided into both categories. These categories are as referred to below, (Henry Mintzberg, Sumantra Ghoshal - 2003 )

Perspective approaches:-

The perceptive way of tactical development is useful in the steady environment of the organization or the exterior environment where there are less changes and the organization is smoothly functioning its businesses. The perspective approaches include the subsequent colleges of strategies, (Henry Mintzberg, Sumantra Ghoshal - 2003 )

Planning strategies: -The planning school of strategies is based on the formal planning guidelines for the tactical formulation. A series of steps are taken to formulate the strategy of the business. The drawback of these strategies is that these are extremely rigid and are less attentive to the challenging environment of the business.

Positioning strategies: - The positioning strategies derive from the detailed analysis of the exterior environment and the competition position of the organization. These schools examine these strategies as the analytical tools for the strategy formulation of the organizations.

Design strategies: - This university sees the strategic management and the formulation as the process of conception. These strategies depend after the rigid and the detailed organizational composition and design and are designed after the detailed analysis of the surroundings of the business and its own resources to achieve the goals of company in the environment.

Descriptive strategies: - The descriptive strategy is adopted in the energetic and the competitive environment where there are swift changes in the environment of the firm. You will find seven colleges of strategies developed using the descriptive way of strategic development and execution. These schools are the following, (Henry Mintzberg, Sumantra Ghoshal - 2003 )

Entrepreneurial strategy: - The entrepreneurial strategies are developed by the first choice, CEO or the creator of the organization. The entrepreneurial strategies are extremely important strategies for the newly set up business which includes not yet described the route of the business enterprise. The leader grows the objective and the vision of the business and these strategies derive from these assertions and are helpful to attain the goals and goals of the organization.

Learning strategy: - The learning college of strategy perceives the process of strategic management as the development process. The learning strategies have the room for the continuous development as there are changes in the surroundings of the business and the organization deal with these changes in various ways. A lot of the businesses today are implementing the learning ways of become more competent in the market.

Cognitive strategy: - These strategies derive from the interpretation of the info by the strategies based on the conception of the builder of the strategy.

Power university of strategy: - The power school of strategies depends after the deference in the energy of the strategy coders and the exterior stakeholders of the business. The basic aspect of these strategies is the political participation of different groupings and the stakeholders of the business. These strategies have many advantages as well as negatives for the business in the long run of the business enterprise.

Cultural institution: - The most important inside factor of the strategy development is the culture of the organizations. These strategies are developed through the collective process.

Environmental university: - This institution of strategies use the reactive process to develop the strategies of the business. These strategies are developed in response to the changes in the environment of the organization. The other universities of strategies see the environment as the factor however in the environmental school of strategy the surroundings is seen as the acting professional for the development of the strategy.

Configuration institution: -The change process can be used as the tactical development of the organization. This institution of strategy consists of the strategy as the change from one type of decision making to the other types of the decision making.

Strategy of the Starbucks:-

The Starbucks is following perspective university of strategies:-

The Starbucks is following the different kinds of the strategies for the expansion and development of the business. The Starbucks at present is following the positioning strategy and the progress strategy.

Positioning strategy of Starbucks:-

The positioning strategies of the Starbucks contain the followings characteristics,

Store atmosphere: -The company is using the precise atmosphere of the store where in fact the people will come and enjoy their time. The stores can be found to at the convenient places to the customers.

Groups are welcomed: -The corporation has developed the seating programs to welcome the customers in the stores of the business in the form of teams and the people are also welcomed to take pleasure from their time at stores of the organization.

Customer services: - The organization is participating in close attention on the client retention through the effective customer services to them. To develop the effective customer services of the organization, the employees are trained and developed customers service skills. The business believe that the staff satisfaction is the better needed for the satisfaction of the organization. The organization recognizes direct link between your employee satisfaction and the customer's devotion. To provide the effective customer services the business is rolling out just say yes insurance policy.

Involvement locally: - one of the key values of the organization is the engagement in the support of the surrounding communities of the business. the business is focusing on different community development programs. For example the company has donated $ 210$ 200 000 for the improvement of the students community.

Starbucks is the most significant corporate contributor for the relief programs of the community services.

Advertisement; - The organization is spending very less on the marketing and the campaign of the products of the business. The marketing and the advertisement of the Starbucks will depend on upon normally the one to 1 marketing and the majority of the marketing of Starbucks is dependent upon the recommendation through the satisfied customers.

Problem Research:-

To analyse the problem and to review the strategy followed by the organization the internal and external environment of the business must be analysed. Then your decisions can be studied to solve the situation the organization is happening since last 2 yrs.

Internal research of organization:-

The internal analysis of the business can be carried out through different methods and techniques developed by the professionals and the freelance writers. These tools help the management to comprehend the existing position of the company. There are following tools and techniques which is often used to look at the inner organizational factors that can be in favour or against the organization.

SWOT Analysis

BCG Matrix analysis

Analysis of the 7 Ps of Organization

Ratio analysis

SWOT Evaluation of Starbucks:-

"One of management's trustiest tools is the SWOT analysis. You take a calm, cool go through the organisation's Advantages, Weaknesses, Opportunities and Threats. Then you seek to capitalise on the Strengths, Eliminate the Weaknesses, seize the best Opportunities and counter the Threats".

Strengths of Starbucks: - Starbucks gets the following advantages within the business which may help the business to remove the weaknesses of the organization and focus on the opportunities on the market. There are following Talents of the Starbucks,

The organization is very professional and specialist in taking the available opportunity in the market.

The organization's business is very profitable and as result of this the Company has very storing financial position and the bases.

The company is internationally recognized and is rolling out the organizational position in the global market segments. The organization is operating 9000 stores in about 40 courtiers on the planet.

The Starbucks has developed the international acknowledgement for the brands of the organization.

The Starbucks has the loyal customers

The business is behaving as the respectable employer for the employees and the organization consider its value with the employees of the organization.

The firm is also concentrating on the innovations along the way and [product development.

The organization is rolling out the strong quest declaration and the ethical values of the organization.

The capability of the business to spin out the services quickly gives the firm a competitive edge over the competitors of the business.

Weaknesses of the organization:-

There are the pursuing weaknesses of the Starbucks which the organization must beat to achieve the organizational goals.

The major weakness of the business is that it's realising on the beverage innovation, the beverage innovation can go wrong with the passage of time.

The organizations sales are dependent upon the drinks in case the sales and the progress of the U. S reduce the expansion of the Starbucks also diminishes.

More than 70 %70 % of stores of Starbucks are working in U. S

The group has lower staff performance

The major sales of the caffeine of the business are retail sales

the group has low per staff return as compared to the industry

the employees have less income as compared to the industry.

The corporation is also facing some problems in the international procedures management.

The firm is also facing problems about the expansion of the business of the organization.


The company can avail the opportunity to develop global businesses.

There global market has emerged new market segments for coffee's China is the largest market for the caffeine products.

There are expansion and development opportunities in the India, Pakistan. Russia and Shanghai

The current economic climate of the business is rising that can be suitable for the business.


The organization has the following threats in the market.

The increased competition in the market

The recession in the markets which is affecting the sales of the business?

Political, legal and environmentally friendly issues effecting the organization

Decreasing employee's satisfaction

External environmental analysis:-

The external environmental analysis can be carried out through the different tools and the analytical techniques utilized by the organizations. There are the following exterior environmental research techniques employed by the business.

PEST Analysis

Porter's five Causes analysis

PEST Evaluation of Starbucks:-

The PEST evaluation is used to evaluate the overall macro-environment of the business where the firm is working its operations. The PESTEL examination includes the research of the political, economical, social, technical, environmental and the legal factors affecting the organizations strategy and the marketplace position.

Political Factors: -The politics factors which can be affecting the strategy of the Starbucks are the changes in the taxation rates like the VAT is increasing in britain that may lead to the upsurge in the costs of the merchandise of the business. The other politics factors could possibly be the foreign insurance policies of the united states.

Economical condition:-

The economical conditions are the changes in the economy of the external environment of the business. These factors range from the change in inflation rates, change in the unemployment and other economical changes which can affect the strategy of the business. The Starbucks is facing the inflationary and the increased unemployment problems in the US, which are leading the business towards lowered sales of the organization.

Social Factors:-

The public factors which make a difference the strategy of the business include the difference in the cultural behaviours and attitudes of the clients towards the products of the business. Sociable behaviours of the people are changing towards the merchandise of the organization because of the cultural issues against the organization.

Technological Factors:-

The organizations are presenting the technology to become more competent on the market. The competitors are using different technology for the development and the improvement of the quality of the products and the services of business.

Strategic Planning Models:-

There are various strategic development and planning models utilized by the business but none of the models is perfect and various models are used in several situations. The business uses these models to gain competitive advantage in the changing business conditions of the organizations. You will discover following strategic planning models utilized by the organizations in several competitive positions. (Carter McNamara, 2010 )

Basic Strategic Planning:-

The basic strategic planning model for the introduction of the business strategy is accompanied by the organizations to deal with the strategic development of the small and growing organizations. In this particular model the mission and perspective of the business enterprise are developed and then your goals are identified to be achieved by the business. Different strategies are developed to achieve these mentioned goals and goals of the business. The specific action ideas are developed for the implementation of each strategy. And in the last step these all processes are monitored and modified if needed.

Issue-based Planning:-the concern based planning the proper development can be used to evaluate the specific issue affecting the business. The following steps are adopted in these kinds of strategy,

Identify key issues

Design ways of package with these issues

Evaluate the mission and vision of the business and update if needed

Development o yearly implementation plan along with the budget for the year

Evaluate, screen and review the plan on regular basis

Strategic Positioning model:-

"The overall reason for the model is to ensure strong position one of the organization's mission and its resources to effectively operate the organization. This model is useful for organizations that require to fine-tune strategies or find out why they are not working. A business might also choose this model if it's experiencing a sizable number of issues around inside efficiencies". (Carter McNamara, 2010 )

Scenario Planning Models:-

"This process might be utilized together with other models to ensure planners truly undertake tactical thinking. The model may be useful, especially in identifying proper issues and goals. " (Carter McNamara, 2010 )

Organic planning model:-

"Traditional strategic planning processes are sometimes considered "mechanistic" or "linear, " i. e. , they're somewhat general-to-specific or cause-and-effect in nature. For example, the techniques often get started by conducting a wide analysis of the external and internal conditions of the organization, conducting a proper analysis ("SWOT" examination), narrowing right down to figuring out and prioritizing issues, and then growing specific ways of address the precise issues. " (Carter McNamara, 2010 )


Review of the strategies of the organization:

The pursuing steps should be studied by the business to examine the strategy of the organization to attain the organizational goals and objectives. These proper changes are developed after the research of the organizations inside and external surroundings. The business is following the positioning and the progress strategies and the both strategies are suitable for the business for the development of organization towards the achievements of the goals. But according to the internal and the external environmental examination these strategies need some advancements or some changes to react these changes in the surroundings of the business. The followings will be the reviews which should be taken by the business in its strategy,

The business must connect the mission, eye-sight and the core values of the business to solve the community related problems. The organization should also use different ad tools to draw in more customers towards the business. This will improve the market share of the organization.

Customer services:-

The group should improve the customer's services by giving training, education and development to the staff of the business. The business should increase the pay rates of the personnel to increase the efficiency and the devotion of staff towards the business.

Other strategic options available to organization:-

The corporation can also develop the price leadership strategy to attract a number of customers and the market share in the period of recession. This is attained by implementing the new solutions to enhance the processes of the organization.

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