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Assignment 2: External and Internal Environments
Using the corporation you chose from Assignment 1, examine its industry. Research the company on its own Website, the public filings on the Securities and Exchange Commission EDGAR database (http://www.sec.gov/edgar.shtml), in the University’s online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.
Please Review the attached word doc the selected corporation is there.
Write an eight to ten (8-10) page paper in which you:
1. Choose the two (2) segments of the general environment that would rank highest in their influence on the corporation you chose. Assess how these segments affect the corporation you chose and the industry in which it operates.
2. Considering the five (5) forces of competition, choose the two (2) that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past.
3. With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future.
4. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify your answer.
5. Give your opinion on the corporation’s greatest strengths and most significant weaknesses. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choices.
6. Determine the company’s resources, capabilities, and core competencies.
7. Analyze the company’s value chain to determine where they can create value using the resources, capabilities, and core competencies discussed above.
8. Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are:
• Identify how the six segments of the general environment affect an industry and its firms.
• Identify the five forces of competition.
• Analyze the external environment for opportunities and threats that impact the firm.
• Analyze the internal environment of a company for strengths and weaknesses that impact the firm’s competitiveness.
• Use technology and information resources to research issues in business administration.
• Write clearly and concisely about business administration using proper writing mechanics.
Running head: STARBUCKS 1
STARBUCKS 3
Starbucks
Name
Institutional Affiliation
Starbucks
As an American company and coffee shop franchise, Starbucks was founded in 1971, Seattle, Washington in 1971. With well over 15,000 outlets globally, the company has been considered as the world’s leading coffee vendor with the majority of the outlets being located in North America (“Company Information”, 2018). As of 2014, the company was estimated to be having a market value of close to $100 Billion. However, this could not have been possible without globalization; globalization has allowed the company to expand beyond the boundaries of the American Nation and influence the economies of other countries. It has also allowed various political powers to interact thus promoting cooperation and finally it has been able to tap into economies that have raised the value of the brand such as that of China and Europe (“Company Information”, 2018). In 2003, Starbucks began its expansion to foreign countries exploiting its potential and thus promoted their economies through the “Starbucks Effect.” This was the emergence of various coffee shops competing with the franchise in selling coffee (Kang & Namkung, 2017). The internet of things can be regarded as one of the most influential aspects that have allowed Starbucks to grow and dominate most markets globally. The company is aggressive in implementing change and this is inclusive of their machines. The company always installs the latest in machinery that allows the outlets to operate at maximum efficiency. Moreover, technology has allowed the franchise to have better interaction with its clients through online tracking of consumer preference. This tracking allows the company to understand what the client expects of the company and makes the necessary changes (Kang & Namkung, 2017). Finally, the company relies on online platforms for the employment of their staff as conventional means are not only expensive but extremely time-consuming.
As stated earlier, the “Starbucks effect” has been influential in the development of various economies through competition. Starbucks as a franchise has created a competitive environment in various markets that has resulted in the company being innovative in its marketing strategies (Kang & Namkung, 2017). This pressure to remain at the top can allow the company to generate above-average returns. Moreover, the brand is recognized by clients globally, this is the only advantage the company has considering that many locals may have other preferences towards other coffee vendors. In the Industrial Organization model, the company already qualifies as being attractive as its management and operation strategies are simple thus giving it room for more modifications to be applied. Moreover, the company applies the strategy of economies of scale whereby, due to its vast size it retails its products at a low and affordable price. This makes the company attractive to clients regardless of nationality or region. Inclusive of the low prices, the company trains some of its employees to become baristas thus giving them the professional skill needed to satisfy the needs of the client. All these characteristics are then implemented by a strategic means thus ensuring that the company earns above-average returns (Kang & Namkung, 2017). The same applies when the company applies the resource-based model. This is because the firm has the resources and identity that would give them the competitive edge in the market against their completion. Secondly, it has the technology, and capability to operate efficiently and at lower prices compared to the competition. This assures that Starbucks will always secure a larger and stronger consumer base. With a strong consumer base, economies of scale accompanied by technological advances, the company always has a competitive advantage. Finally, with the current application strategy, the company can easily identify any gaps in their performance that can be amended thus giving it the needed advantage.
Starbucks as a corporation does not have a readily available vision statement. However, from the analysis of its home website, is to institute Starbucks as the leading vendor of premium coffee globally, maintain its principles as it develops. From the analysis, some key points can be identified, leading vendor, premium coffee globally, principles and development (“Company Information”, 2018). Being the leading vendor, Starbucks wants to achieve control in the supply of coffee-based products, in other words, coffee of the highest quality. It should be noted that it has already seen through most of the parts of its statement. As, it is already the leading vendor of coffee globally and it is still developing (McGinn & Crowley, 2010). However, when it comes to the quality of coffee, other companies such as Dunkin Donuts and McDonalds have been stated by critics to be having better quality coffee. When it comes to principles, the company has been able to maintain them especially after the reinstatement of Howard Schultz in 2008. From the Starbucks website, the mission statement is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (“Mission Statement”, 2018). From this statement, it immediately reflects what the company does to keep itself running. The company inspires and nurtures through its employees, this is through the maintenance of a small company culture (Williams, 2008). It encourages the employees to bond with the clients thus creating a personalized experience. The last key point identifies how the company aims to develop gradually influencing the community positively and analytically in the process.
The main stakeholders of the company include the employees, customers, suppliers, environment, government and finally investors. The company, unlike many others, has prioritized its employees in several of its responsibilities (Werther & Chandler, 2010). These are the social and corporate efforts, and in return, the employees have assured job security, optimal working conditions, and better wages. The company went a step further and collaborated with Arizona State University to pay over 50% of the tuition of junior and senior students who worked with the company. The customers top the least when it comes to numbers; their main interest in the company is high-quality service as well as products (Werther & Chandler, 2010). In return, the company addresses this matter adequately and includes personalization of service thus giving the consumer a warm experience. Suppliers, on the other hand, include wholesale firms and coffee farmers. The suppliers influence the performance of the company by ensuring the varying demands of the company are satisfied duly. The company, in turn, addresses the needs of the suppliers through various corporate responsibility programs. When the environment aspect of Starbucks stakeholders is addressed, it has programs that make the company environmentally sound. One of these programs includes the CAFÉ program that has promoted biodiversity (Peloza & Shang, 2011). With reference to the government, the company is influenced by the various changes that are made to public policies and regulations. One of the most fundamental regulations that affect the company is the minimum wage (Peloza & Shang, 2011). Nonetheless, Starbucks complies with these regulations and policies set by the government.
References
Company Information. (2018). Starbucks Coffee Company. Retrieved 9 January 2018, from https://www.starbucks.com/about-us/company-information
Kang, J. W., & Namkung, Y. (2017). The Effect of Corporate Social Responsibility on Brand Equity and the Moderating Role of Ethical Consumerism: The Case of Starbucks. Journal of Hospitality & Tourism Research, 1096348017727057.
McGinn, D., & Crowley, S. (2010). Vision Statement: Tired of PowerPoint? Try This Instead. Harvard Business Review, 09.
Mission Statement. (2018). Starbucks Coffee Company. Retrieved 9 January 2018, from https://www.starbucks.com/about-us/company-information/mission-statement
Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the Academy of Marketing Science, 39(1), 117-135.
Werther, W. B., & Chandler, D. (2010). Strategic corporate social responsibility: Stakeholders in a global environment. Sage Publications
Williams, L. S. (2008). The mission statement. A corporate reporting tool with a past, present, and future. Journal of Business Communication, 45(2), 94-119.
