Starbucks is one of the most famous coffee and snacks store in the World retail market. It is an American Company that was founded in the Seattle in 1971. This company has approximately 182,000 employees and 19,767 operation companies around 62 countries in the world. The products of the Starbucks Company include the roasted and high quality coffees and teas and the variety of the fresh food items and other beverages. This company has generated so much revenue in the past few years that it has taken this company to a new high level and Starbucks has set new standards. From the starting of its development the Starbucks franchise gained importance due to the richtradition of the coffee it has passed in the global world and has developed a feeling of connection between different people and different countries.

a) Position of the Starbucks in the external environment:

Starbucks is competing in the industry of the coffee and snacks. The coffee and snacks industry has face some real challenges and downfall in the past few years in the market due to the changing tastes of the consumers and the economic crisis in the 2009. Before all this downfall, the industry has a strong position in the market and has achieved high level of growth in the market. But due to the economic crisis the consumers started to spend less on the premium products and move towards the more reasonable products in the market. This crates poor conditions for the Starbucks and they have also seen downfall in the market for the limited time. Then to improve the downfall in the economy and toreduce the economic crisis from the market, the Starbucks have the market share of 36.7% and tries to improve the economy of the country.

As Starbucks is an old franchise so it has a place in the market and this franchise has now lead to its maturity level. And the Starbucks has dominate the market by making up 60% of the market shares. And by making these shares, they have enough power that they can change the trends of the market according to them.

The demand for the products of the Starbuck have increased with time due to its unique products and premium Arabica coffee beans. And the consumption of coffee has increased in the past few years because the recession in the market has now improved. And during the time of 2018 in the past few years, the prices of the coffee beans have decreased and this results in the decrease of the costs of market and this will result in high profitability in the market. But during the past few years the health and obesity issues have increased andthe Starbucks and other companies shift their menus towards a more healthy and organic menu so that they can take care of the health issues of the public. Starbucks is a well reputed company in the external environment due to its premium products and fresh and good items.

Its special coffee beans have developed a special sense taste in their coffee that makes the Starbucks different from other people. Although the Industry of coffee and snacks have seen real downfall in many years and have seen ups and downs in the market due to economic crisis but still it survived to maintain a standard and positon in the market and has achieved its goals to be the most developed franchise in the world. The position of Starbucks in the environment is strong in competition with the other franchises in the market.

b). The determinants of strategic capability of Starbucks – resources, competencies and the linkages between them

            The strategic capabilities for Starbucks Company can be measured by the threshold resources meant for the business operations conducted by Starbucks in the United Kingdom included the basic coffee machine, venues, cups, tables, human resources, and more. On the other hand, these threshold resources would not be sufficient enough in the contexts of enabling Starbucks to endure in the market competition. For this reason, Starbucks has also utilized a set of unique resources within the market place that comprise wide options of fresh coffee along with other items, the excellent design of shops, the customer loyalty cards, and its classy Verismo technology.

As well, the Starbucks’ threshold competencies might comprise of selling out the coffee beverages along with a variety of prepared food throughout the basic procedures toward the customers within the greatest basic manner. Nonetheless, Starbucks has strived toward its achievement of a competitive advantage within the market place over a set of main competencies that also integrate excellent customer service which attained throughout a huge motivation level from the employees, gives the focus on the quality of its products, and supported by a strong leadership which provided by its CEO accompanied with its President Howard Schultz.

Furthermore, Starbucks Company also has possessed some capabilities and competencies such as mentioned below:

·         Producing a milestone of its total revenues at $13,3 billion which contributes to its resilient financial condition

·         Making the first move for a set of agendas and some partnerships in the context of Corporate Social Responsibility or CSR, for example, such as its strategic business partnerships with DonorsChoose.org, launching the Youth Action Grants, and many more.

·          The main product items that Starbucks offers are the majority of sources of the profits gained by the company. For this, Starbuck has entered the new market of super-premium juices by introducing its new Evolution Fresh, extending its product range by presenting the Starbucks Blond Roast, and also launching personalized Frappuccino beverages.

·         High employee retention also benefits Starbucks by saving more on the costs for training and also having talented and experienced employees who are invested within the company.

·         Starbucks also acquires automatic, expensive and valuable equipment which enable the company to save more time and producing a constant unique taste for its loyal customers. Since not many coffee sellers could afford for the similar equipment that Starbucks has, this equipment has definitely provided the company a temporary benefit,

At this point, we can assume that, along with the international strategy made by Starbucks, the company would able to transfer its core competencies along with its entire capabilities across the countries, and then, slowly but surely, shape up the profit drivers within some countries as the company endures its worldwide expansion. Indeed, Starbucks definitely has been using a differentiation strategy, with a purpose to get a competitive advantage(Geereddy, 2013).

c). The Starbucks’ purposes, taking into account stakeholder expectations

 The major stakeholders of Starbucks Company are(THOMPSON, 2017 ):

·         Employees (the baristas and partners)

·         The Suppliers (coffee farmers and supply companies)

·         The customers

·         The investors

·         The Governments

·         The environment

Starbucks has been presenting a high performance of CSR or Corporate Social Responsibility in addressing the expectations and interests of its stakeholders. In fact, the company even has satisfied many concerns of its stakeholders such as employees, customers, suppliers, investors, as well as the environment. In addition to this, Starbucks has been engaging its stakeholders, including the types of stakeholders who might be directly affected by every single business decision made by the company. In fact, Starbucks has approved its capability to better understand the concerns of its stakeholders and get their input on the mutual importance topics.

Furthermore, if we take a look at the purpose of Starbucks which is “Our mission: to inspire and nurture the human spirit — one person, one cup and one neighborhood at a time,” we can see that the company has a unique purpose which is achieved along with its customers(Bonchek, 2013). This has approved by how the company has been 99% ethically sourced ever since 2015. In fact, Starbucks has clearly stated that the company has always dedicated to bring coffee as the initial sustainable agricultural product. A report has presented that Starbucks has developed above 1,500 leadership presented by its Energy and Environmental Design with its qualified stores located in 20 different countries, which also included a minimum of complete 50 states in the US. Moreover, the company also has planned to multiply its recycled content in, along with the reusability and recyclability for all of its cups by 2022. What’s more, Starbucks also has declared in March 2018 that, the company has achieved 100% payment equity meant for all of its employees in the United States who have a similar role, in spite of their race, ethnicity, or gender.

Thus, it is fair to say that Starbucks has a shared purpose that presenting to the public that, it is not something that the company would do to the stakeholders, or for the stakeholders. Instead, it is more about something that the company would side by side with the stakeholders. This is exactly how Starbucks could get a good reputation from most of its stakeholders as well. In reality, Starbucks has been doing an effective effort in the context of Corporate Social Responsibility or CSR. The recent strong brand along with this excellent corporate image generated by Starbucks simply indicates that the company has been placing its efforts to involve almost all of its stakeholders within every single strategy made by the company, with a purpose to achieve success. One clear message from the Starbucks’ values’ statement which was saying that “We are performance driven, through the lens of humanity,” has made it clear that the company really has a shared purpose in which the company believes that they should share the success achieved with all of its stakeholders(FARFAN, 2019)

References of Starbucks Company Analysis

Bonchek, M. (2013, MARCH 14). Purpose is Good. Shared Purpose is Better. Retrieved October 2019, from https://hbr.org/2013/03/purpose-is-good-shared-purpose

FARFAN, B. (2019, August 5). Starbucks' Company Mission Statement. Retrieved October 2019, from https://www.thebalancesmb.com/starbucks-mission-statement-2891826

Geereddy, N. (2013). Strategic analysis of Starbucks corporation. Retrieved October 2019, from https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf

THOMPSON, A. (2017 , JANUARY 31). Starbucks Coffee’s Stakeholders: A CSR Analysis. Retrieved October 2019, from http://panmore.com/starbucks-coffee-stakeholders-csr-analysis