The analysis of the climate in which an organization activates is also known as the PEST analysis.4.1 Company
Product Line
Starbucks offers a wide selection of coffee-based beverages, with both caffeine and without caffeine. Aside their coffee beverages, they also offer whole-bean coffees, food items and coffee-related products and hardware equipment. "Starbucks stores offered a choice of regular or decaffeinated coffee beverages, a special "coffee of the day," and a broad selection of Italian-style espresso drinks. In addition, customers could choose from a wide selection of fresh-roasted whole-bean coffees (which could be ground on the premises and carried home in distinctive packages), a selection of fresh pastries and other food items, sodas, juices, teas, and coffee-related hardware and equipment."
About 61% of the sold items are coffee-based beverages, 15% are whole-bean coffees, 16% are food items and 8% are products and equipments related to coffee. These percentages vary within each Starbucks store according to the location, the customers' preferences or the actual size of the store. Smaller stores sell mainly coffee beverages with a reduced selection of whole-bean coffees and also limited hardware appliances. The larger stores on the other hand, sell a wide variety of coffee-based beverages, whole-bean coffees, "gourmet food items, teas, coffee mugs, coffee grinders, coffee-making equipment, filters, storage containers, and other accessories." Starbucks had also launched the Hear Music service, but it was renounced this year.
Image on the market
Starbucks has generally been perceived as the undisputed leader of the international coffee industry. In their beginnings however, skeptics stated that the company would never be able to convince the American individual to consume its coffee on the street or in stores. The company however managed to successfully achieve its desiderate and establish itself as the global center of the coffee industry. Its successful image was created, enforced and maintained by the corporate strong brand, a symbol recognized across the globe. It was also improved by their policies relative to the environment, the customers, the shareholders and most importantly, the staff members.
After nearly four decades of continuous success however, the company is now encountering some difficulties, generally materialized in decreased customers in the United States stores. Tormented by internal and external problems, the company's stock plunged by nearly 50% throughout fiscal year ended on the 31st of December, 2007. The same year also brought about the first decrease in sales registered in Starbucks' entire existence. CEO, President and Chairman Howard Schultz however was not intimidated by the negative perception and he created a plan that would restore Starbucks' image as "both a corporate powerhouse and a cultural icon epitomising the caffeine-fuelled lifestyle of the globalised 21st-century world."
Technology and Experience
The coffee giant has been present in the national and international markets for almost 40 years; therefore their expertise is quite vast. Foremost, they hire only the most skilled, qualified and experiences professional to join their teams; the previous expertise of these people adds more value to the Starbucks chain. Finally, the most important source of experience in the field comes from the CEO himself, who has been with the company since its early and shy beginnings and who is highly experienced and capable to successfully handle any occurred situation.
In their quest to integrate innovation and ensure success, the technological developments have played a vital role for the strategic approaches implemented by the senior at Starbucks. A relevant example of how technology was combined with coffee selling is the joint venture of Microsoft and Starbucks in 2001, when the two agreed to offer wireless high speed internet connections to the customers in the Starbucks stores. The company also invested large sums of money into acquiring new hardware and software equipments that increased the operational and cost efficiencies, to finally culminate with increased satisfaction to the customers, the staff members and the shareholders.
4.2 Collaborators
Business Partners
As mentioned above, the coffee giant has entered a mutual agreement with it international leader Microsoft. This lead to the offering of WI-FI connections to the customers in the Starbucks stores and it as such increased both the satisfaction felt by the consumers, but also the numbers of customers, leading consequently to increased revenues. Another collaborator in the technological department is at&T, which has supported and developed communication appliances at point of sale. In the spring of 2008, the partners signed a new agreement for further improvement. HP is yet another major collaborator...
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