Unlike before, not all baristas were hand-picked who had mastered ‘both’ the hard-skill and soft-skill required for the job. Moreover, the diversification of customer base and increased product portfolio meant that they had to deliver ‘customer-made’ beverages as quickly as possible and maintain the ‘customer intimacy’ quotient at the same time. The above table clearly states that the most profitable / valuable customer for Starbucks is a ‘Highly Satisfied Customer’ with an average lifetime revenue of
The industry size and consumers needs are impacted by social or customer related factors (Contributor, 2015). The main customer related factors affecting Starbucks and its competitors include, economic conditions and customer attitudes, specifically towards Lifestyle and Taste. One of the main demand drivers in the Industry is disposable income, which is significantly influenced by economic conditions. Positive economic conditions increase industry demand and per capita coffee consumption. The Industry demand has changed due to a shift in consumers’ attitudes towards healthier products.
However, such short-term financial growth is in sacrifice of brand positioning and equity in the long term. When confronting the financial crisis and intense competition, Starbucks becomes inevitably vulnerable. As a result, it needs both internal and external brand revitalization to regain its competitive
Starbucks SWOT Analysis In this SWOT analysis, we will examine the strengths, weaknesses, opportunities and threats of Starbucks Corporation. Strengths Starbucks has a strong market position and global brand recognition. Starbucks Corporation is operating in many countries and has one of the highest rankings in brand recognitions. They have motivated, high knowledge employees who work hard to achieve company goals and that’s due to a good work environment. Starbucks implements loyalty programs to help maintain customer satisfaction.
The company’s revenues have grown at an average annual rate of 9.2% in North America from 2010 to 2013, and 22.4% in China and the Asia Pacific. The company is looking to expand aggressively in this region. Its operating margins, are not as high as they could have been, because it did not franchise a sizable number of its stores, but are still healthy and established, keeping in mind that the effects of the 2008 financial crisis have yet not vanished. Starbucks falls under another league altogether: its main offering, coffee, is frequently touted for health purpose. The
2.2.2 Transformational Leadership Style That Influence Strategic Planning Leadership style represents an important aspect of leadership. Its significance stems from the contribution it makes to the organization’s success. Leadership is critical and crucial to formulate and implement strategy. A clear commitment to the development of any strategy must be contributed by the senior management or the management team, who must provide the necessary leadership (Schram, 2014). Ideally, a strategy must be developed from the bottom up.
Executive Summary Starbucks is an American coffee chain that began operating on the 31st of March 1971. Since then they have grown and expanded to over 24 000 outlets globally. Starbucks has a extensive Corporate Social Responsibility (CSR) programme. They are committed to Ethically and Sustainably 1Sourcing their Tea, Coffee and Manufactured Goods. This means that they hope to reach their goal of 100% ethically sourced cocoa, 65% ethically sourced tea and manufactured products by 2020.
However, the company must work to address the identified threats, especially the threat of substitution linked to the increased availability of home-use specialty coffee machines. On the other hand, Starbucks cannot do much but to avoid the threat of bureaucratic red tape. Overall, the PESTEL/PESTLE analysis framework indicates that Starbucks Coffee has plenty of room for further global growth. The preceding analysis proves the point that Starbucks is operating in a relatively stable external environment. The main reason for this is the fact that it operates in the Food and Beverages space which means that despite the recession, consumers cut down on the consumption to a certain extent and not completely.
They also have tax policies and regulatory pressure on them. Aim is to take convenient decision on firm’s progress. Political decision affects the economic, social, environmental and technological issues Economic : The company has to deal with rising labor and operational costs. The inflation rate, Importing laws , Exchange rates and the Interest rates are the major economic factors which affects more. As Starbucks imports coffee from frequent countries they have to be aware of changing imports laws.
It is essential for Starbucks to know their rivals and what they are currently doing to gain completive edge over them. Starbucks should be able to defend its position against other retailers and do various initiatives and activities to maintain its brand advantage. Objectives Objective of the