Business Analysis
BUSINESS ANALYSIS
INTRODUCTION
Starbucks Corporation is an American based company which is established in 1971, and it is famous as the best retailer and marketer for its specialty in Coffee across the globe. Starbucks Corporation is operating more than 19,000 stores in 62 countries all over the world (Starbucks, 2013). The products of the Starbucks include the handcrafted, high quality coffees, a variety of food items and beverages.
This report presents an analysis of economic and social factors that impact Starbucks and its business operations. The report presents three important factors and then the report identifies two critical factors for the organization to remain competitive in the industry. The report then comes up with strategies and actions that are to be taken by the management in order to overcome the impact of these factors. The report then at the end presents the conclusion.
Buying Power Of Consumer
The economic factors influence the revenues of the Starbucks directly as the consumer buying power changes from time to time (Helms & Nixon, 2010). The current economic crisis has decreased the consumer buying power, and they are spending less money on coffee products. On the other hand, the prices of the products offered by Starbucks are on the higher side than other firms, and this could influence the sales and profitability of the company.
Increased Demand Of Fresh Juices And Tea
There has been a growing demand for tea and fresh juices, and many competing firms have started offering tea as well as fresh juices (Ryan, 2014). People around the world have realized the importance of fresh juices and tea and health benefits (Riell ¸2015). Although, Starbucks offer fresh juices, it does not have a variety of tea and fresh juices to serve the needs of the consumers. So, Starbucks could add more product line to attract different target markets that are looking for fresh juices and tea.
Coffee Shops Used As Meeting Spots
Coffee shops are now increasingly used as meeting spots. Entrepreneurs and business managers are now using many coffee shops to discuss and have meetings. However, some of the coffee shops have started offering laptops with the internet to the users so that they can use it for their meetings. Moreover, some coffee shops have made exclusive areas in the shops so people can have a calm environment for the meeting.
TWO FACTORS CRITICAL FOR ORGANIZATION TO BE COMPETITIVE
Modifying the prices offered by the company and
Coming up with an environment which is suitable for business people to conduct meetings.
For this purpose, business actions and strategies have been discussed that would help Starbucks to overcome these factors and remain competitive in the industry. With increasing competition in the industry, it is becoming important for Starbucks to modify its strategy in order to remain competitive and sustain in the market.
BUSINESS ACTIONS TO OVERCOME THE FACTORS
Modifying the price of the product line
Starbucks needs to modify the prices of the products it offers. As competition has increased and companies are offering similar products at lower prices, and this is influencing the customers to go for competing firms offering similar taste and products at lower price. Therefore, Starbucks should reduce its pricing strategy and offer similar products at a lower price so that it could attract consumers and not allow them to go to the competing firms.
Modify the interior
As coffee shops have been increasingly used now for meeting purposes, and therefore people are looking for a calm and quiet environment to conduct meetings. Coffee shops although, covers several aspects that people need to conduct their meetings. However, at times because of crowdedness they cannot have a pleasant and calm environment and are not able to use these coffee shops for meetings. Thus, Starbucks can come up with an exclusive area or section in the coffee shops that will be calm so people can conduct their meetings. Moreover, different coffee shops have even added laptops or iPads in the coffee shops so that people can use them in the meeting.
CONCLUSION
Starbucks is one of the leading organizations in the industry. The company has been dominating the market for years. However, the competition has increased now as many new firms have entered and they are eating up the market share. For this reason, it is high time that Starbucks should modify its strategy so that they can remain competitive and enjoy being the market leader. Otherwise, competing firms will continue to eat the market share. Thus, Starbucks should lower its pricing strategy and come up with exclusive areas for people to conduct meetings as it will differentiate itself from the others and will attract more people which will increase its sales.
References
Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis-where are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215-251.
Starbucks (2013).Investor Overview. Retrieved April 19, 2016, from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome
Riell, H. (2015). Tea & Juice Sales Keep Flowing. CStore Decisions, Retrieved April 19, 2016, from http://www.cstoredecisions.com/2015/04/03/tea-juice-sales-keep-flowing/
Ryan, R. (2014). The Rise of Healthy Beverages. Specialty Food, Retrieved April 19, 2016, from https://www.specialtyfood.com/news/article/rise-healthy-beverages/
