Strategic ManagementIntroductionStrategic Management analysis is done to assess the strategic fit between a company’s competencies and its strategy. This analysis also includes a match of the internal strengths of the company with the external drivers or the external environmental factors to understand how they stack up against each other. This report analyzes the strategic fit between Starbucks and its business segment in the country selected for this report, which is the United States. This report examines in detail how Starbucks competes in the United States with reference to the market analysis in the chosen country, an analysis of the company’s internal and external environment, and finally, assessing the strategic fit between the company and its business drivers (Grant, 2011, 17).
Starbucks Coffee Company, which was founded in 1971, is a specialty coffee retailer which is one of the leading coffee brands in the United States. The company, headquartered in Seattle, WA, operates in 37 countries all over the world. The backbone of the company’s operations is its company-owned retail stores, which are hubs for consumers to consume coffee and related products. The key aspect of Starbucks’ business is a strong differentiation strategy, which would transform a $0.5 commodity into a $4 experience (Harding, 2010, 32).
The report is divided into three tasks, Task A, Task B, and Task C, with each task representing one specific focus area. While the Task A analyzes the external market environment in the United States, the Task B analyzes the internal capabilities of Starbucks from the strategic perspective. Finally, the report provides some recommendations as to how Starbucks can implement its strategy better in the United States.
Mission StatementThe mission statement of Starbucks is as follows:Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.Task AMarket Environment AnalysisThe country chosen for Market Analysis is the United States. The importance of market analysis lies in the fact that the strategy of Starbucks has to be formulated in such a way that it addresses the external determinants in the market. For instance, the PESTLE analysis done below would indicate what the external drivers for Starbucks are. Similarly, the Porter’s Five Forces model would indicate the impact of the external drivers on the company’s strategy. Third, the BCG matrix and the Industry Life Cycle analysis would indicate the stage at which the portfolio of products that Starbucks’ markets are positioned. Apart from this, the significance of external market environmental analysis is that it provides a snapshot of how the external
s of the Starbucks company is structured. The analysis of the PESTLE is not based solely on consumer input alone. There are more than 4,000 different factors that influence the market environment of the chain to determine the PESTLE index. The best models are used in both the current market landscape and the future. The strategy of an organization under a market environment is that the management team will conduct a management evaluation based on their existing experience, information and expectations. As such, the market analysis should reflect a holistic picture of how the entire organization is structured and the strategy must reflect on those who participate. As such, the PESTLE has to be evaluated within the context of one of major challenges from the company’s perspective. For example, one must take into account the need for a broad range of different organizations to grow, how the Starbucks company operates and the unique needs of a wide range of stakeholders. The company believes that in order to be a great company, it must maintain diverse, sustainable, innovative and strong growth initiatives for a long time. These initiatives will include improving the environment, helping customers move their money (including coffee), increasing access to consumer products, strengthening relationships with consumers, and a wider reach. It is the responsibility of the leadership team to ensure that the current financial sustainability framework was followed during the project management and operational life cycle phases. Furthermore, it is the responsibility of the marketing team, on the field, to design and implement marketing activities that will support the growth of the Starbucks brand. As Starbucks now realizes, the PESTLE is the most comprehensive evaluation of its financial state, and we can be proud to have successfully managed it.As a team, we can make it impossible for our competitors and organizations to take an unfair advantage on the market share and future success of coffee. As a coffee company, our management team may be concerned that we will need to shift our management processes from one where we are faced with one of the greatest challenges of the year, towards one where we have to find solutions to our challenges. This, as it comes across in our management, may result in changes in our strategic decision making process. Furthermore, while evaluating what constitutes optimal financial condition, we can find ways to address the issues that affect our business, which include:What is being determined: Our business may be the best it can be, but we must determine and maintain our financial condition in the light most relevant to our customers. Is it really fair to call this a loss-making strategy as well? The short and medium term plan of improving our financial condition, even in light of these concerns, remains to be discussed. However, we hope the current strategy of Starbucks and Starbucks Market Organization should be revised as part of this review.