In this case, these contact persons act as the companys brand champions. 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. Starbuck's financial performance will be an analysis and comparison of its performance through the years 2007- 2014. Also, this SWOT analysis considers imitation as a major threat against the coffeehouse business. Starbucks failed in its maiden venture in the Australian market because by the time it was setting up shop in the country, Australians were already used to a coffee drinking culture that had been started by boutique-like coffee shops. However, Sainato (2021) reports that some employees are very unhappy with understaffing at some stores, heavy workloads, relatively low pay, and confrontational customers. Starbucks organizational culture emphasizes the employees-first attitude. strategic commitments In 2014, Starbucks boosted its CSR performance for this stakeholder group by giving scholarships to employees based on a partnership with Arizona State University. Global Economic Prospects: Fiscal Headwinds and Recovery. Customers want to receive the best possible product or service. (2011). This includes your impact on the environment and the quality of life of communities. However, the companys performance in addressing employees as stakeholders has room for improvement. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Instead . There are two types of stakeholders: internal stakeholders and external . Corporate Governance. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). 100% pure kona coffee is distinguished from all other coffees by its unique island microclimate and extra care, starbucks cups for keurig pods have the following amount of caffeine: Standard pod: 130mg per 8 fluid ounces, auto-drip coffee is the coffee that you make in a homebrewer that automatically controls the brewing duration and, Can coffee be shipped? When identifying stakeholders, a firm should focus on those stakeholders that ______. At the moment, Starbucks is ranked as the leading global coffee chain operator. Starbucks seeks to sell experience, and not just coffee. Internal&External Customers: Example of Starbucks - 574 - GRE - Studocu Internal&External Customers: Example of Starbucks Internal&External Customers: Example of Starbucks prof. digesh pawar international journal for research in DismissTry Ask an Expert Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew My Library Modules Also significant in this SWOT analysis is higher business diversification, which can improve Starbuckss long-term stability. Stake: Product/service quality and value, #2 Employees. In general, Starbucks complies with rules and regulations. 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). These are the three main areas where Starbucks can change to boost its corporate social responsibility performance to satisfy stakeholders. Internal stakeholder group External stakeholder group As seen from the Fig. This would also reduce cultural resistance. This business analysis case also considers the opportunities and threats (external strategic factors) related to the competitive landscape, which involves the strong force of competition, as determined in the Porters Five Forces analysis of Starbucks Corporation. The report outlined the internal and external challenges that Starbucks faced. (2021, August 4). Need a custom Case Study sample written from scratch by By 2008, Starbucks was opening 8 stores per day. While analyzing Starbucks ' finances during 2007-2014, in the seventh period, the ratio and growth decreased (2008/09). Starbucks is a global coffee company that has been in business for over 50 years. We use cookies for website functionality and to combat advertising fraud. Employees are also given wages above the legally mandated minimum wage. Effective capabilities for managing a global supply chain of coffee and related materials. Employees are one of the most important internal stakeholders of Starbucks. Starbucks has implemented different strategies to keep its customers coming back. Investors have interests in high financial performance of the company. The external customer is the person who purchases the goods or services, while the internal customer is anyone within an organization who at any time is dependent on anyone else within the organization. However, the company has been criticized for tax evasion in Europe. However, when the company decided to implements KPTs, it lost sight of the very things that made it successful. Streamline effective communication to keep internal and external stakeholders systematically and proactively informed of project progress. In everything we do, we are always dedicated to Our Mission: to inspire and nurture the human spirit one person, one cup, and one neighborhood at a time. external stakeholders are from outside of the company but Free Employment Stakeholder 803 Words 4 Pages Stake: Health, safety, economic development. They are highly affected by the decisions, performance, profitability and other activities of the company. Most Starbucks coffee stores are located in neighborhoods with high traffic. Starbucks purchased in fiscal 2001 and the contracts that Starbucks has negotiated for coffee purchases in fiscal 2002, Starbucks pays an average price of $1. Stakeholders Businesses have different types of internal and external stakeholders, with different interests and priorities. They can directly impact decisions or successes of an organization through: Taking a position or making a decision that goes against a company's goals and strategy. International Marketing. Identify and Prioritize What You Want to Measure. And there are two types of stakeholders, including the primary and seconday stakeholders ( Clarkson, 1995). As in any business, Starbucks must address investors as stakeholders. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. Ontario, Canada: A & I. Patterson, P. G., Scott, J., & Uncles, M. D. (2010). . These are the people who will consume the end products or use the services of the company They, therefore, decide whether a business succeeds or not, even though they are not concerned with its day-to-day running. It is worth noting . Wall Street Journal. 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. Imitability of products, especially beverages. Starbucks does a great job at listening to their consumers with their twitter handle @mystarbucksidea This twitter handle is used to circulate ideas that users have submitted and voted on to be implemented. Consumers across the world are increasingly demanding fair practices, and this has seen many firms change their operating practices in order to accommodate these demands (Northey, 2007), and Starbucks is no exception. Strong coffee and coffeehouse brand image. The internal strategic factors identified in this part of the SWOT analysis of Starbucks Corporation show that the business has strengths that promote resilience through diversification and a global supply chain. Starbucks is one such organisation. They are not employees and do not have any direct financial interest in the profit or loss of the company. 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. Such sociocultural trends influence consumer perception and purchasing behaviors, as shown in the PESTEL/PESTLE analysis of Starbucks Corporation. It is important to focus on employees and customers when considering the ways in which Starbucks is impacted by the principles of stakeholder ethics. Please share the article link on social media to help us continue with this free academic research. Starbucks is also affected by the government of a country in which it operates. Although Starbucks was very successful in the United States, this success was not replicated in the Australian market. Peloza, J., & Shang, J. McDonalds challenging Starbucks with cheaper coffee drinks. It also uses sales promotions, events, direct marketing, print media, and PR in an integrated manner to multiply the impact of its promotions. This way, it can take advantage of any feedback from these groups and make changes as needed. Starbucks Company's External and Internal Analysis. Who are Starbucks internal stakeholders? A mysterious, nautical figure called to them, as sirens do They really loved the look of it and it kind of tied into what they felt Starbucks stood for, Steve said. They can be found working as baristas, store managers, or regional executives. 4 August. It must abide by the rules and regulations, tax, and other relevant issues very carefully as any breach may be costly for it. Smith, M. D. (1996). Summarize the primary and secondary ethical issues(s) involved. These youth rates are often criticized. Regional and state unemployment 2010 Annual averages. IvyPanda. in a Red Bull. In the context of corporate social responsibility, Starbucks needs to account for the demands or interests of stakeholders, because the company is viewed not just as an organization for profit, but also as a citizen of society. Starbucks has also embraced a philanthropic philosophy as a tool for promotion. Internal stakeholders are, as the name suggests, stakeholders that exist inside a business. The company has a long-term commitment to sustainable coffee farming practices and is committed to paying a fair price for beans. Copyright by Panmore Institute - All rights reserved. For example, Starbucks Corporations marketing mix or 4P indicates product mix expansion to include tea, food, and merchandise, in addition to coffee. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Starbucks Coffee Company (Starbucks) was established in 1971 as a fine coffee retailer by three academics in . Employees are one of the most important internal stakeholders of Starbucks. The related pricing strategy, an internal strategic factor, is a weakness because it limits the coffee companys market share, especially in areas with relatively lower disposable incomes. Starbucks Company's External and Internal Analysis. currently have, or could potentially have, a material effect on the firm. Copyright 2017 2025. IvyPanda. The industry environment also presents the opportunity to strengthen the companys market position through additional partnerships or alliances with other firms. Also, the report shall endeavour to provide recommendations for the case study in view of the marketing issues raised. It took out an eight-page ad in the Wall Street Journal declaring its new vision, a message directed at both customers and internal stakeholders. Other relevant articles for you are: Competitors of Starbucks (Competitor analysis of Starbucks), Lock, S. (2022) Selected leading coffee shop chains in the UK, available at: https://www.statista.com/statistics/297863/leading-coffee-shop-chains-in-the-united-kingdom-uk-store-number/ (accessed 01 March 2023), Sainato, M. (2021) Coffee-making robots: Starbucks staff face intense work and customer abuse, available at: https://www.theguardian.com/business/2021/may/26/starbuck-employees-intense-work-customer-abuse-understaffing (accessed 23 January 2022), Starbucks (2023) About us, available at: https://www.starbucks.co.uk/about-us (accessed 01 March 2023). M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. Stake: Revenues and safety, #5 Communities. Such a move would impact positively on Starbucks business model. In addition, the industry environment is subject to independent coffeehouse movements. Starbucks boasts of a wide variety of over 30 coffee products that customers can choose from. Opportunities and Threats. Internal stakeholders of Starbucks Shareholders A company's shareholders are the people and organisations who invest in the company and share in the benefits or losses of ownership. The company contributes to different non-profit organizations in a bid to enhance brand awareness and image among local communities. Eventually, Starbucks failed to take appropriate risk mitigation processes and faced decreasing incomes in 2008. Why are customers external stakeholders? Starbucks should continue to be more innovative in the design and development of new products. Internal stakeholders include employees, board members, company owners, donors and volunteers Anyone who contributes to the companys internal functions can be considered an internal stakeholder. Technological improvements can enable a company to market its products directly to their target market using emails, text messages, and social network sites as well (Moreno, 2008). Starbucks Coffees main strengths are as follows: Starbucks Corporation has one of the worlds strongest and most popular brands. Copyright by Panmore Institute - All rights reserved. They can affect how successful Starbucks is by doing their job and providing inputs into decisions that go into creating products and services that customers want. Starbucks seeks to sell experience, and not just coffee. While scouring some old marine books, something stood out. 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. Dieting: Sugar is the New Fat. Stakeholders of Starbucks (Stakeholder analysis of Starbucks). They can be owners, shareholders, employees . 82% of Starbucks employees feel their work environment is positive meaning Starbucks is a happy place to work. Starbucks operates in various industries that have different challenges to business growth. One of the Starbucks guiding principles is "to contribute positively to communities and environment.". There is two different types of stake holders these are internal and external. Internally, Starbucks stakeholders include the employees, the shareholders, subsidiaries and the management. Bureau of Labor Statistics. Anyone who contributes to the company's internal functions can be considered an internal stakeholder. 3 pages, 1441 words. Starbucks failed to adequately analyze the existing coffee culture in Australia, and this could have precipitated its failure. See our Privacy Policy page to find out more about cookies or to switch them off. With being the leader in a multinational industry, Starbucks understands that it has to manage and maintain its relationships with all its stakeholders in order to continue its reign on coffee. It is also recommended that Starbucks Corporation consider pricing strategies that attract more customers. The branding symbols should be easily recognised. Australasian Marketing Journal, 18, 4147. Bottom Line, 26(4), 28. You are free to use it for research and reference purposes in order to write your own paper; however, you In some countries like New Zealand, Starbucks gives very low wages to juvenile workers (youth rates). What to do when stakeholders matter: stakeholder identification and analysis techniques. The following are the main stakeholders in Starbucks Coffee's business: 1. A systematic review. Suppliers, creditors, and public groups are all considered external stakeholders.' There are many stakeholders of nestle corporation, the people or group of people to be affected by its regular operations directly or indirectly knowns as stakeholders. Stakeholders can affect the firm's actions. However, it experienced supply shortages in the USA in the past, making many thirsty, and coffee-crazed customers unhappy. Important stakeholders include customers, employees, suppliers, competitors, local communities, investors, activist groups, and government. This is an expensive way to capture attention, but . Based on the foregoing arguments, the following recommendations are made to enable Starbucks enhance its business philosophy in the face of increasing competition and challenging business environment: Starbucks sells experience, and not just coffee. Good organisations are mainly based on cultivating customer retention relationships, as opposed to the acquisition/transaction mentality. Provide a concise explanation of what a priority means. This group involves owners, investors, customers, competitors, employees and suppliers. Our risk assessment, supply chain and corporate social responsibility teams also monitor for landscape changes and emerging risks on a continuous basis. Its Starbucks. 11 best internal communication examples: companies getting comms right 1. Internal stakeholders are those persons or organizations who have some sort of vested interest in the company's success. The contact personnel at Starbucks play a very vital role in enhancing relationships with customers. The external stakeholders include the suppliers, government, customers, society whose influence has an impact on the business. Governments. As part of the Starbucks mission we are committed to maintaining our uncompromising principles while we grow. Activists have protested outside its stores for various reasons, including human rights, union issues, and animal cruelty. Savvy Shoppers in a Brave New World. For example, it is one of the first companies to offer full healthcare to full-time and part-time employees. Internal OD consultants can communicate progress on their own and with organization key stakeholders, who they already have connections to. Starbucks has been the target of activists who are both for and against its actions. "Starbucks Company's External and Internal Analysis." Thus, the firm must contribute to the improvement of society. Moreno, J. Also, the company gradually diversifies its business through new products and new subsidiaries, resulting in the current product mix and brands of Ethos Water, Seattles Best Coffee, Teavana, and others. 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. Starbucks Corporations weaknesses are as follows: Starbucks has high price points that maximize profit margins but reduce the affordability of its products. These movements are sociocultural efforts that support the operations of small independent local coffeehouses, and oppose the expansion of multinational coffeehouse chains. 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. By the time Starbucks ventured into the Australian market in 2000, the country already had in place a thriving urban caf culture. 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. From its beginning as a single storefront serving fresh-roasted whole bean . It is recognized worldwide for its high-quality coffee and espresso drinks, as well as its commitment to social responsibility and environmental sustainability. Starbucks Corp. SBUX, +3.76% disclosed that Chief Executive Kevin Johnsons total compensation for 2021 totaled $20.43 million in 2021, up 39% from $14.67 million in 2020, which was down from $19.24 million in 2019. 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. Institutional shareholders can influence its both strategic and non-strategic decisions significantly. We will write a custom Case Study on Starbucks Companys External and Internal Analysis specifically for you for only $11.00 $9.35/page. The 4 include 1. The Customers can be considered as the most important external stakeholders.
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