Strategic Management And Business Policy Essay

Question:

Discuss about the Strategic Management and Business Policy.

Answer:

Introduction

Starbucks Coffee was first opened in Seattle, Washington, on 31st March 1971. It is an American coffee company and with coffeehouse chain worldwide. At present, Starbucks is present in 72 countries and territories and has its stores in 23,768 locations worldwide (Starbucks Coffee Company, 2016). This paper aims at presenting a cross-sectional analysis on the strategical management of the company.

Overview of the business

According to Wu (2013) , Starbucks Coffee offers a variety of products to its customers such as instant coffee, Espresso, Caffe Latte, Frappuccino, Teavana tea products, pastries, fresh juices, ice cream and other seasonal offerings. Starbucks has installed automated machines at some places that have 280 possible drink combinations to choose.

Starbucks is in partnership with Apple, Kraft Foods, and PepsiCo company. Starbucks also went in partnership with Arizona state university, where the students would be provided a certificate and the cost of covering 44% of its fees while working at Starbucks (Wu 2013).

Vision

Though Starbucks provides with no specific visionary statements, one can still comprehend after a brief description provided on its website Starbucks Coffee Company(2016), that it aspires to be “the best purveyor of finest coffee in the world, by uncompromising the principles of the company”. Starbucks wants to achieve the leadership in the coffee industry. It has a target to grow globally through new Starbucks cafes.

Mission

As mentioned in the website, the company aims “to inspire and nurture human spirit – one person, one cup and one neighborhood at a time". The mission statement also shows how Starbucks aims at growing the business, at one place or a neighborhood at a time. They have even mentioned how much they are passionate about their coffee, partners, shareholders, neighborhood and stores. They have even set an environmental mission list Hat aims to implement ideas that are eco-friendly.

Annual turnover and net profit

According to the updated statistical record of Starbucks Coffee by Zhang , Chien and Ma (2015) -

Annual turnover

2015

Average for the past five years (2011-2015)

Revenue And Sales

19.15 billion US$

15.098 billion US$

Gross Income

4.56 billion US$

3.262 billion US$

Net Profit

2.76 billion US$

3.152 billion US$

Geographic operation

According to Wrigley and Lowe (2014), there are 191,000 employees presently employed in Starbucks coffee. Starbucks initially started its store in Seattle, Washington, but now it has spread itself worldwide with stores in all the continents.

United States, Mexico, Puerto Rico, Costa Rica, Bahamas, Guatemala, El Salvador, Aruba in North America .

China, Japan, South Korea, Taiwan, Phillipines, Turkey, Thailand, Indonesia, Malaysia, Hong Kong, United Arab Emirates, Kuwait, Saudi Arabia, India, Lebanon, Bahrain, Vietnam, Qatar, Oman, Kazakhstan, Cambodia in Asia.

New Zealand and Australia in Oceania.

Argentina, Brazil, Peru, Chile, Combia and Bolivia In South America.

United Kingdom, Germany, France, Russia ,Spain, Switzerland,Netherland, Poland, Ireland, Greece, Austria, Czech Republic, Denmark, Sweden, Norway , Belgium , Hungary, Romania, Cyprus, Portugal , Bulgaria, Finland , Luxembourg ,Slovakia and Monaco in Europe .

Nature of the industry

Starbucks coffee is an American company that operates in retail coffee and snacks store industry. It is spread worldwide and is considered as one of the leading firms in its field. It prodly boasts of offering a variety of products to its customers. The company is in a mature stage with a medium level concentration.

Main competitors

According to Wu (2013), Starbucks belongs to the coffee and beverages industry thereby, acquiring a lot of competitors in its field. The main competitors of Starbucks are McDonalds, Costa Coffee, Coca Cola, Caribou Coffee, Coke, Pete’s Coffee, Nescafe.

Environmental and social policies

As stated by Rothaermel (2015), the policies are -

  • Starbucks started “ground for your garden” approach to making the business environmentally friendlier by composting the leftover coffee grounds.
  • The problem of dipper wells where water was being wasted, were replaced by push buttons metered faucets that saved up to 150 us gallons of water per day in every store.
  • Starbucks uses 10% recycled paper for its beverage cups.
  • In 2016, starbucks initiated a five year plan to donate unsold food to U.S local food banks.

Recommendations

Starbucks coffee should enhance its vision statement by reflecting the growth of its array products that it offers. Its mission statement should provide the approaches and strategies that the firm is planning to use. It can add more details to show how the company inspires and nurtures the human spirit.

It has succeeded in being one of the finest companies in its field. It should start advertising its products in those countries where its store count is comparatively less. This would help them to grab the customer’s attention (Rothaermel 2015)

Conclusion

A cross-sectional analysis of Starbucks coffee has been done. The areas of geographical extents, current employment rate, current revenue and net profits, chief competitors and environmental policies has been analyzed. Its visions and missions are comprehended, thereby giving a clear view of how the company aims to work in future. In the end, the paper concludes with some recommendations that would help the company in its strategic management and business policy.

References

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.

Starbucks Coffee Company. (2016). The Best Coffee From | Starbucks Coffee Company. [online] Available at: [Accessed 23 Aug. 2016].

Wrigley, N. and Lowe, M., 2014. Reading retail: a geographical perspective on retailing and consumption spaces. Routledge.

Wu, C.L., 2013. The Research of Brand Image, Experiential Marketing, Customer Satisfaction and Customer Loyalty-Example of Starbucks Coffee.

Zhang, K., Chien, N. and Ma, A., 2015. BUSINESS 478 Section D100.

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