MGM 4139 STRATEGIC MANAGEMENT CASE STUDY by : Anaseri Zulkifli EX2833 Hafizullah Mohd Amin EX2906 Michelle Lim Li Yoke EX2885 Mohd Osman Mohd Hassan EX2894 Mohd Johan Khair Azmi EX2889 Rashidi Jaffri Jaafar EX2815 2. Internal stakeholders are people who are on the inside of the business that already serve the organisation these include staff managers board members etc. These are defined as people or groups of persons who affect and are affected by the decisions or actions of the business. Furthermore, a suitable recommendation in this case is to implement creative marketing and branding strategies that build Starbuckss corporate image as a contributor to community development. Also, this SWOT analysis considers generalized standards a weakness that limits the flexibility of the coffeehouse chain business organization. CIB Assignment - Starbucks Case 1. Delivering our very best in all we do, holding ourselves accountable for results. Results are Essay Example on Starbucks . The SWOT Analysis model is a strategic management tool for assessing the strengths, weaknesses, opportunities, and threats (SWOT) relevant to the business and its internal and external environments. This part of the SWOT analysis model focuses on external factors that present opportunities for business growth and development. Does Temperature Matter For Pour Over Coffee? How Do I Set My Hamilton Beach Coffee Maker To Auto Brew? Examples of internal stakeholders include employees, shareholders, and managers. These suppliers include farmers, traders, and roasters. Examples of external stakeholders are customers, suppliers, creditors, the local community, society, and the government. It is also important for Starbucks to keep in touch with activist groups that include unions and environmentalists when considering sustainability matters. You are free to use it for research and reference purposes in order to write your own paper; however, you Although Starbucks was very successful in the United States, this success was not replicated in the Australian market. The main difference between internal and external stakeholders is that internal stakeholders have more . 2021. These threats are external factors that reduce or limit business performance. Internal stakeholders are those persons or organizations who have some sort of vested interest in the company's success. Internal stakeholders are individuals or groups within an organization with a vested interest in the success of a business. International Marketing. For Starbucks, its major stakeholders include employees, customers, suppliers and stockholders Starbucks performances and business strategies could also affect the general public and the society. (2007). The interests of this stakeholder group are high quality service and products, such as coffee and related beverages. What are Starbucks CSR initiatives? It is becoming increasingly important for firms to work closely with competitors (Walters & Rainbird, 2007) and as such, Starbucks should also consider entering into a partnership with fast-food chains in a bid to improve its coffee offer, in addition to fighting stiff competition from such direct competitors as McDonalds. The firm can improve its corporate social responsibility performance by addressing such issue in this stakeholder group. ). Starbucks Corporation (Starbucks Coffee Company), examined in this SWOT analysis, positions itself as the biggest coffeehouse chain in the world through innovative strategies that employ business strengths to overcome weaknesses, exploit opportunities, and protect the business against threats and barriers to success in the coffee industry environment. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). Mason, A., Cole, T., & Goza, N. (2017). must. The company should consider partnering with other firms in foreign markets so that it can ride on the success of the local company. External stakeholders are those who have an interest in the success of a business but do not have a direct affiliation with the projects at an organization. Also significant in this SWOT analysis is higher business diversification, which can improve Starbuckss long-term stability. Customer. On the other hand, external stakeholders include customers, clients, business partners, suppliers and shareholders. Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). From its beginning as a single storefront serving fresh-roasted whole bean . Starbucks continues to improve its corporate social responsibility practices to address the concerns of different stakeholder groups. Companies keen on venturing into the international market must be prepared to encounter various obstacles (Cateora et al 2011). These are stakeholders who are directly affected by a project, such as employees. Also, Australian coffee drinkers had already developed a more sophisticated palate following years of drinking coffee, meaning that they demanded stronger and straighter flavor that did not require the use of flavors and syrup shots to disguise the taste. Global Economic Prospects: Fiscal Headwinds and Recovery. The main external stakeholders of McDonald's include the customers, suppliers, governments, and local communities. The paper will also describe the risks associated with initiatives that management has announced and the financial impact that these risks may have. Summary of Stakeholders of Starbucks (Stakeholder analysis of Starbucks). Internal stakeholder group External stakeholder group As seen from the Fig. See our Privacy Policy page to find out more about cookies or to switch them off. These recommendations focus on minimizing the negative impacts of the internal and external factors enumerated in this SWOT analysis. The company is an advocate of CSR movements, especially those pertaining to sustainability in business. Burritt, C. (2007). Use a Multi-Channel Promotional Strategy Starbucks predominantly uses its website, social media channels and in-store displays to promote the brand and the products. Internal stakeholders include employees, board members, company owners, donors and volunteers Anyone who contributes to the company's internal functions can be considered an internal stakeholder. For example, the firms supplier diversity program ensures that more suppliers from around the world are included in the supply chain. It is so successful because it was able to provide an experience that changed how much of the world thought about coffee shops and how many of us drink coffee outside of our homes. Coffee drinkers in Australia can be discerning and are therefore not easily dissuaded by foreign coffee companies (Patterson et al., 2010). Such an image can help reduce sociocultural opposition against the companys expansion. The company also includes customers as major stakeholders by extending the Starbucks culture to customers at its cafs. The variety of these industries has increased over time, as the company develops more products to complement its core coffeehouse business. strategic commitments Sometimes these interests can conflict. Copyright 2017 2025. The company has had to contend with various legal, political, economic and social factors as it undertakes its business activities. Based on the current condition of the business, some of the most notable strategic management concerns enumerated in this SWOT analysis of Starbucks Coffee Company are the imitability of products and the corresponding threat of imitation, the threat of competition involving low-cost sellers, and independent coffeehouse movements. What are Starbucks five key stakeholders? Since then, over 300 stores have opened. Business weaknesses are identified in this component of the SWOT analysis. . Starbucks has also embraced a philanthropic philosophy as a tool for promotion. Until recently, Starbucks has relied heavily on word of mouth and its strong brand as the main marketing tools but with increased competition and imitation, the company has moved fast to enhance repeat business and customer loyalty. Stake: Product/service quality and value, #2 Employees. This is because by the time the company ventured into the Australian market, smaller boutique-style coffee shops in the country had already gained popularity with coffee drinkers since they offered personalized and services. Rustan Coffee Corporation , a member of the Rustan Group of Companies is the authorized licensee of Starbucks Retail Business in the Philippines. ensure the integrity of our platform while keeping your private information safe. 4 August. In addition, Starbucks Coffee and Farmer Equity (CAFE) program requires transparency among wholesale suppliers to ensure that coffee farmers are properly paid. Stakeholders, Mission, and Vision. These are the three main areas where Starbucks can change to boost its corporate social responsibility performance to satisfy stakeholders. The company has also had to adjust its product offerings in order to meet the growing demands of the rising number of educated and health conscious consumers. Some of the notable new products include Instant via Ready and Tazo Tea Infusions (Patterson et al., 2010, p. 44). All rights reserved LCHW. One of the lessons learnt is that it is always important to recognize and appreciate the importance of local culture. In 2014, Starbucks boosted its CSR performance for this stakeholder group by giving scholarships to employees based on a partnership with Arizona State University. Moreno, J. Starbucks is effective in its corporate social responsibility efforts, although more effort is needed with regard to the stakeholder group of coffee farmers, as well as the issues of youth rates and tax avoidance in some regions. It is worth noting . The smaller boutique-style coffee shops are very popular with Australians because they offer personalized service, familiarity, and intimacy (Patterson et al., 2010). Pizza Hut, Starbucks, Domino's, Dunkin' Donuts, and Wendy's are some of those competitors. These groups can play a big role in shaping how it communicates with its stakeholders by pointing out anything it may have missed or wants to improve upon. Internal stakeholders often hold a percentage of shares, capital or other "stake" in the company, but external stakeholders play a different role in the company. If you're considering conducting a materiality assessment, below we offer seven basic steps that should be a part of your initiative: Identify Internal and External Stakeholders. . Every office has the smart, witty person who knows whats going on and can always make co-workers laugh. in a Red Bull. Why are customers external stakeholders? The coffee culture in Australia is both mature and sophisticated. . Miller, C. C. (2010). Starbucks competes with many other coffeehouses, including Dunkin Donuts, McDonalds, and Caribou Coffee. Critical financial analysis and accounting for stakeholders. Internal stakeholders include employees, board members, company owners, donors and volunteers. However, the company has been criticized for tax evasion in Europe. Farmers aim to increase coffee yield to generate more revenues. Internal and External Stakeholders. In addition, the report shall also explore Starbucks failure in Australia, and the reasons behind this failure. That's why they implemented a mobile employee app to reach their biggest asset: their customer-facing workforce. Starbucks is expected to file for all important permits and forms, before it can be authorized to conduct business in a foreign country (Buckstein, 2010). When identifying stakeholders, a firm should focus on those stakeholders that ______. Starbucks Company's External and Internal Analysis. The report further recommends that Starbucks should consider forming partnerships with local companies in the coffee industry. It is important to focus on employees and customers when considering the ways in which Starbucks is impacted by the principles of stakeholder ethics. While scouring some old marine books, something stood out. professional specifically for you? A handful of strategic priorities makes it easier for external stakeholders to assess what matters most to the company. Its Starbucks. There are two types of stakeholder which is internal stakeholder and external stakeholder. The business operations of Starbucks will also be affected by local and federal laws and regulations. See our Privacy Policy page to find out more about cookies or to switch them off. Anyone who contributes to the company's internal functions can be considered an internal stakeholder. Streamline effective communication to keep internal and external stakeholders systematically and proactively informed of project progress. Stake: Employment income and safety, #4 Suppliers and Vendors. These four words represent the major constructs firms need to consider to make the most of their internal set up and the external marketplace characteristics. Stakeholder analysis refers to the range of techniques or tools used to identify and understand the needs and expectations of major interests inside and outside the organization environment. This is IvyPanda's free database of academic paper samples. More than $10 million in Foundation grants supported local and global COVID-19 initiatives. On the other hand, external stakeholders are parties that do not have a direct relationship with the company but may be affected by the actions of that company. Summarize the primary and secondary ethical issues(s) involved. As the worlds most popular specialty coffeehouse chain, Starbucks effectively addresses this interest. As part of the Starbucks mission we are committed to maintaining our uncompromising principles while we grow. There are two types of stakeholders: internal stakeholders and external . For example, Starbucks Corporations marketing mix or 4P indicates product mix expansion to include tea, food, and merchandise, in addition to coffee. Customers 3. This group involves owners, investors, customers, competitors, employees and suppliers. Starbucks impacts its employees in several ways - income, working conditions and benefits. Bottom Line, 26(4), 28. He is a lecturer in Management and Marketing. Imitability of products, especially beverages. Starbucks prioritizes employees in its corporate social responsibility efforts. Diversification makes the effects of market and industry risks on the coffee business more manageable. In this regard, our Board of Directors has adopted governance principles, committee charters and policies to lead Starbucks governance practices. In the SWOT analysis model, effective capabilities for managing a global supply chain strengthen Starbucks by supporting operations that connect production (e.g., Arabica coffee beans in plantations) to consumption (e.g., caffeinated drinks in coffeehouses). However, when the company decided to implements KPTs, it lost sight of the very things that made it successful. to gain and sustain competitive advantage to manage various stakeholders effectively Effective guiding policy is supported by and stays consistent through the use of ______. Internal Stakeholders serves the organisation, but External Stakeholders deals with the company externally. External stakeholders are those who do not have a direct tie to the company. Years of coffee drinking has seen many Australians develop a more sophisticated palate and as such, they are able to enjoy a stronger and straighter coffee with no need for flavours and syrup shots to disguise the taste (Patterson et al., 2010). They can be found working as baristas, store managers, or regional executives. Starbucks global expansion and continued dominance in the coffeehouse industry indicates high financial performance. The global financial crisis of 2008 greatly affected the operations of Starbucks in various countries. The companys stores are normally located conveniently on busy streets and in major malls that command heavy traffic. Research reveals the most important stakeholder group of organizations are employees who come ahead of customers, suppliers, community groups, and especially far ahead of shareholders. Weaknesses are internal factors that reduce or limit the capabilities of the coffeehouse company. Starbucks Coffee PESTEL/PESTLE Analysis & Recommendations, Starbuckss Organizational Structure & Its Characteristics, Starbucks Coffees Stakeholders: A CSR Analysis, Starbuckss Generic Strategy & Intensive Growth Strategies, Starbucks Corporations Organizational Culture & Its Characteristics, Starbucks Five Forces Analysis (Porters Model) & Recommendations, Starbuckss Mission Statement & Vision Statement (An Analysis), Starbucks Operations Management, 10 Decision Areas & Productivity, McDonalds SWOT Analysis & Recommendations, Walt Disney Company SWOT Analysis & Recommendations, Sony Corporations SWOT Analysis & Recommendations, Whole Foods Market SWOT Analysis & Recommendations, Procter & Gamble SWOT Analysis & Recommendations, Burger King SWOT Analysis & Recommendations, Home Depot SWOT Analysis & Recommendations, Porters Five Forces analysis of Starbucks Corporation, Starbucks Corporations marketing mix or 4P, Starbucks Corporations generic competitive strategy and intensive growth strategies, PESTEL/PESTLE analysis of Starbucks Corporation, U.S. Department of Agriculture Economic Research Service Food Service Industry Market Segments, U.S. Department of Commerce International Trade Administration Consumer Goods Industry, Starbucks Corporation (Starbucks Coffee Company). This SWOT analysis of Starbucks Coffee considers the strengths and weaknesses (internal strategic factors) inherent in coffee, coffeehouse, and related businesses. And this is who their marketing is targeted to reach. It has operations in 44 countries, with over 15, 000 stores in operation (Patterson et al., 2010). This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. On the other hand, Dunkin Donuts offers customers a variety of coffee flavors to choose from, in addition to its emphasis on quality (Dicarlo, 2004). student. Starbucks Company's External and Internal Analysis. The company has a growing population of loyal customers, which adds to the stability of the coffeehouse business. On the one hand, McCafe maintains a low price strategy o its products (Burritt, 2007). Our risk assessment, supply chain and corporate social responsibility teams also monitor for landscape changes and emerging risks on a continuous basis. Excellence for Customers, 2. This would also reduce cultural resistance. One of the Starbucks guiding principles is "to contribute positively to communities and environment.". On a correlative and evolutionary SWOT analysis. In 1992, Starbucks became a publicly-listed company. This study discusses the internal and external business ethics practiced at Starbucks Corporation. Managers perform stakeholder analysis to gain a better understanding of the range and variety of groups and individuals who not only have a vested interest in the . These shops provided personalized, individualized and intimate service, something that Starbucks could no longer provide. While analyzing Starbucks ' finances during 2007-2014, in the seventh period, the ratio and growth decreased (2008/09). Good organisations are mainly based on cultivating customer retention relationships, as opposed to the acquisition/transaction mentality. The statement is concise and inspiring, bringing the core idea of the business - be part of the community and grow together with internal and external stakeholder. Starbucks has a long-standing commitment to sustainability , and as part of our ongoing aspiration to reduce waste and become a resource positive company, we are continuously looking for ways to better manage our waste in stores and in communities; and developing more eco-friendly operations, from stores to supply chain. Private: What Are Internal And External Stakeholders In Starbucks? Starbucks considers customers as among its top stakeholders. . For instance, small local competitors can develop beverages similar to the companys products. Starbucks has also been successful because it has managed to create an atmosphere that enables customers to relax away from home. Stakeholders are key individuals or group members of an organization who have different interests and influence to determine the direction of the business for the organization. "Starbucks Company's External and Internal Analysis." For example, Starbucks now non-fat milk coffee (Wall Street Journal, 2009). Stakeholders of Starbucks (Stakeholder analysis of Starbucks). The external strategic factors in this part of the SWOT analysis show that Starbucks can improve its industry position by exploiting the opportunities, such as through diversification and alliances in the global industry environment. Thus, Starbucks Coffees corporate social responsibility efforts fulfill the interests of this stakeholder group. The company has tried to change the formula of some of its products to suit the tastes and preferences of customers in certain markets (Patterson, Scott & Uncles 2010, p. 44). The employees impacts Starbucks by producing one of the company's most important outputs, what the company terms the Starbucks Experience. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Starbucks operates in various industries that have different challenges to business growth.