Strategic management analysis of Starbucks Assignment

Strategic management analysis of Starbucks - Assignment Example This study proposes to evaluate Starbucks from a strategic viewpoint. In this context of the study, the United States segment of the company will be evaluated. It will also shed light on the coffee industry of USA. The primary rationale behind the industry analysis is to measure attractiveness of this industry. The attractiveness of the industry will be gauged by using PORTER’s five forces framework analysis. Apart from that the external business environment will be also analysed using PESTEL analysis. The next portion will be about identifying the strengths and weaknesses of the company. This will be done with the help of a SWOT framework. In addition, the study will also emphasize on the capabilities, core competencies and resources. Starbucks: A Brief Overview The history of Starbucks Corporation dates back to the early 1970s, when the company was founded by the famous Jerry Baldwin, Gordon Bowker and Zev Siegl (Starbucks, n.d.). Since the time of its foundation, the motto of the company has been to offer unique and special experience to the customers whenever they visit a Starbucks store and taste coffee. Starbucks is presently headquartered at Seattle, Washington, U.S (Dess, Lumpkin and Eisner, 2009, p.557). The company operates with around 6705 company owned stores, and 4,082 licensed stores throughout the United Stated. However from a global perspective, the company operates with 20,366 stores and has presence in 61 countries of the world. It sells hot drinks, foods and retail merchandising items. Starbucks has staggering employee strengths of 1, 50,000. As of financial year end 2012, the net revenue of the company was US$ 13.29 billion. Some of the major competitors of the company are Dunkin' Brands Group, Inc., McDonalds, Nestle, Yum Brands, KFC and Wendy's International, Inc (Yahoo Finance, n.d.). TASK A – Market Environment Analysis Micro Environment Analysis Coffee is admired as one of the most precious agricultural commodities and thu s the coffee industry is also witnessing strong growths globally. With strong and established players such as Starbucks and availability of mass customer makes it one of the potential industries of the world. Now to get deeper insights of the micro environment and to measure the attractiveness of the coffee industry of USA an in depth industry analysis will be carried out. To do so PORTER’S five forces framework will be employed. Porter’s five forces is one of the widely used tools to determine the competitive forces of the industry. The five forces of the industry as portrayed by Michael Porter are the threat of the new entrants within the industry, threat of the substitute products, and intensity of the existing rivalry within the industry, bargaining power of the suppliers and finally the bargaining power of the buyers. The analysis is shown below:- Threat of the substitute products The substitute products are the products that are not exactly the same as the core p roduct, but perform almost the similar function or provide the same benefit as given by the core product. In the context of Starbucks, the substitute products are soft drinks, energy drinks, coffee pills and caffeine. The consumption patterns