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Introduction Of Business Strategy

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A strategic management plan is beneficial to a company because it aids in the communication of goals, the defining of priorities, and the focus of energies. Competition in the market is growing and developing very quickly which is why there are a lot of changes which are essential for the organization to have for the long run. Innovation is critical for a business’s long-term success and makes the organization find stability in the market as well. Starbucks established in 2011 and is having its headquarters in Washington, United States (Nair and et.al., 2021). The organization has been successfully been able to have a stable working and expand them for the long run that there would be having the right economic factor. The report would consist of internal and external analyses of the market and also right theories of strategic plan to be used by the company.

LO 1

Impact and influence of macro environment

Businesses have to make sure that there are good analyses of the external factors which are not under their control but the decisions must be made according to this factor so that the company will be able to have a stable working (Antamoshkina and Zinina, 2019). PESTLE analysis is a tool which can be used by the organization to make sure that there are right actions which are being taken and the follow report would be discussing them in detail.


(Source: PESTLE Analysis in Digital Marketing, 2019)

  • Political factors

Political factors are not under Starbucks control and can change which can impact on the laws and regulations which are set for the company to be able to expand them smoothly. The products and services are priced in accordance with laws and regulations, as well as the hiring of staff, in order for the company to make the appropriate profit in the market, which is critical for Starbucks to be able to expand in the future (PESTLE Analysis of Starbucks, 2020). Raw material for the productivity and operational process, this factor has to be well analysed so that the company will be able to find a better place for themselves.

  • Economic factors

Economically the company had revenue of $26.50 billion as of 2019 which is a great factor but there has to make sure that they are having the right investment for the future (Barbosa, de Oliveira and Santos, 2018). Best of services and quality of products are trying to be served by Starbucks in the country so that there is going to be right working and that would be making the reputation be higher as well. Starbucks must ensure that they are investing in a developing country in order to ensure that the company's economic factors are in place.

  • Social factors

Customers' pReferences and needs fluctuate over time, which is why Starbucks has been able to maintain such a strong market position. The audience is getting attracted and want quality coffee and products to consume which can be provided by Starbucks and this is a great factor to be able to have a stable working in the market (Holotiuk and Beimborn, 2017). Lifestyle has to be understood of the clients only then the organization would be able to expand them successfully in the market. Customers are always looking for variety in the products and services available on the market to ensure that they are meeting the appropriate requirements. Starbucks is skilled at bringing in new items and services in order to create more drinks for the company's consumers' enjoyment.

  • Technological factors

Technological aspect is also changing in the market and this factor has to be addressed to make sure that there is going to be right working and processing. New generations may be readily targeted with the correct technological knowledge, allowing the company to ensure that they have a stable working environment and continue to expand in the market (Lim, Chalmers and Hanlon, 2018).

  • Legal factors

Laws and regulations are made different in each country and Starbucks has been able to successfully expand in 83 countries therefore they have the right understanding of market. The business must ensure that all legal requirements are met in order to establish a solid foundation. Rights of customers and employees are the most important factor and also right legal advisory has to be followed to make sure that the portfolio of the company is strong in market.

  • Environmental factors

There are different styles of working which is present that would help the company to be able to use the right resources and make the company be able to have better environment friendly tools present. The company has to work according to the rules and regulations for the improvement of the environment which is zero carbon footprint (Suoniemi and et.al., 2020). Direct and indirect working cannot disrespect the regulations of the business put forward by the government has.

LO 2

Internal environment and capabilities

Micro environment is under the control and monitoring of the company which is why the organization will be able to plan their working according to it. The company has to make sure that the micro environment is strong to make the working to be higher for better operations (Starbucks SWOT Analysis, 2021).


(Source: 5 Benefits of SWOT Analysis for Your Business, 2019)

  • Strengths

The company is having a lot of experience in these last 10 years which is why the company is having a good growth in the stores which is that they have around 31,256 stores globally. The company is having a good quality of products and services as well which is making the customers be better satisfied (Yuliansyah, Gurd and Mohamed, 2017). There is a strong finance as well which is going to be present and the supply chain of the company is also strong globally. There is a good innovation which the company has been able to build for them.

  • Weaknesses

There are an imitability which is present in the products and services of the company and this factor has to be controlled and monitored. European taxes have made a huge impact on the economic factor of the company which has to be balanced effectively. The pricing of the company also has to be improved upon because there is a great limitation which is present in the company because of this factor (Ciampi and et.al., 2020). The procedures which are decided in the company are not being followed effectively and that is going to make the working of the company be impacted majorly.

  • Opportunities

The company must make sure that they are having price differentiation so that there is going to be right opportunities which Starbucks can have for themselves in the long run which is going to make sure that the company is having a proper competitive advantage. Strengthening the company by having good online channels is also going to make the sales to be higher (Bai, Cordeiro and Sarkis, 2020). Introducing new products and services to the market is critical for the organisation, but it is also necessary for the company to build good market expansion in order to gain a better position in the market.

  • Threats

There is a raise in the pricing of raw coffee beans which is going to make the pricing of the company be higher and that limits the customers in. There are independent coffeehouses which are present in the market and they are going to rate the pricing of the coffee products to be lower which is going to make the working and functioning of the company get impacted (Eikelenboom and de Jong, 2021). Global recession is also getting impacted since 2020 which is going to impact the client base which the organization has been having from a long run. The company has to be promoted and negative publicity is not good for them to have for the long run in the market and this factor has to be well balanced.


Satisfaction of the clients is very crucial in a business to make certain that the organization is having the accurate running. Understanding the customers is going to required making certain that the organization is having the better effectiveness in the market. Customers are the strength of Starbucks for getting in the right economic factor which is very important.


Decisions in Starbucks are made according to the competitors as well to make sure that there is a better working which is going to be there. Products and services of the company have to be unique in nature so that they will be able to provide the customers with the right effective (Matzembacher and Meira, 2019). Audience can shift in this industry very quickly therefore it is important to make sure that there are right actions.


There are a lot of investors which are present in Starbucks currently therefore it has to have better decisions and after making them there has to be good transparency that has to be nearby. There must be good distribution in the firm in order for there to be better understanding and working, which is a critical aspect for the organisation to have for higher productivity (Lin and et.al., 2021).

LO 3

Analysis using porter’s five forces

To understand the competitive working which is present in the market for Starbucks porter’s five forces analysis is a very good method. In the market have to make sure that they are having the right profit margins to make certain that they are being able to invest in other aspects as well. This would improve the company's productivity and ensure that the necessary tools and processes are in place to keep up with the competition (Moktadir and et.al., 2020). Improvements in business strategy are critical to ensuring that the company's working and profit margins remains steady, which is a critical aspect. The further report is going to consist of the porter five forces of Starbucks.

  • Competitive rivalry (Moderate)

Competitive rivalry is high in the market but it is because of the reputation and brand image which the company has been able to gain in the market so that they have a good competitive edge (Rehman and Anwar, 2019). The company has to have a good base for themselves in the market so that there is right working and positioning which will undoubtedly be present. There are a lot of campaigning as well that is present in the company and the trends of the quality of the coffee is also being maintained so that they can build a strong foundation for themselves.

  • Bargaining power of suppliers (Moderate)

There are multiple suppliers which Starbucks has understood and they only take quality from the suppliers as well. This gives the organisation an excellent relationship, and with many suppliers wanting to sell their products at high prices, the company has an advantage in ensuring that they can get the best for their clients at normal prices without compromising quality (Yuan and et.al., 2020). Uniqueness must be present in the firm in order for it to have a competitive advantage in the market and to be able to maintain a great working relationship for the long term.

  • Bargaining power of customers (High)

Customers are very crucial in the company since they are the one’s getting in the economic factor. Their satisfaction is very important to ensure that there is good operating and functioning, as well as a good focus. Working in a competitive environment necessitates increased focus, but it also necessitates high client retention, which is critical (Siltaloppi, Rajala and Hietala, 2020). Client needs and wants must be fully comprehended in order for good working and functioning to occur. Starbucks needs to ensure that they have the best client base possible in order to achieve larger profit margins.

  • Threat of substitute (High)

There are independent coffeehouses which are present globally and despite of them the organization must be able to have a good base for them in the market which is a very important factor to have. Trends have to be followed which is that there are more than products which would have good services is also going to attract the right customers in the market. Influencing the customers is very important to make sure that there are good operations. Any other company, whether it is a local cafe or somewhere else, can readily copy coffee items. Locally, a large number of cafes have opened, posing a significant danger to the company. As a result, they must ensure that the clients' trust in the company remains intact.

  • Threat of new entry (Low)

Any business that wants to compete with Starbucks must invest more money, which must be closely controlled. In the event that this occurs again, the company must have the appropriate safety procedures in place. The business is growing at a rapid pace in the market, resulting in an excellent working environment (Pucheta?Martínez and Bel?Oms, 2019). Customers' goodwill must be protected, and the corporation must take additional steps to achieve the desired profit margins and make additional expenditures in the long run. Businesses in the market must ensure that they are acting appropriately in response to market needs and competition.

LO 4

Strategic management plan

Executive summary

Business strategy is a process which is used by businesses in the market to make sure that there issues and problems are being solved on time and make the planning of the company be higher in the market. Facing this issue is very important for the manager to be able to make sure that the organization is being able to achieve the targets and goals which are set by them.


The vision of Starbucks is to make sure that they are serving the best of quality of products and services which are present in the market and make the satisfaction of the clients be higher.


Platform of the company has to be utilized well and make sure that the industry is having the right marketing to make the organization is having better reputation in the market.


There is a dignified place which the company wants to have in the market by having the right business environment and making sure that the quality of services and products is well balance with the wages of employees.

Pestle analysis

Political: - Political changes and the change in the policies made by the government where the business is working it practices to increase profits.

Economic: - Economic condition is vital and this can impact on overall process of companies planning and strategy.

Social: - Social factor are the change in trends which the company need to develop and increase to grow business profits by satisfying the customers more.

Technological: - Technologies are vital for commercial and the use of innovation in business to make the process faster in developing biasness.

Legal: - Following all the legal laws and legislation so that the company works in better resources and can work freely. This controls the conflicts if the business is done with all the necessary legal factor consideration.

Environmental: - Environment factors are the resources which the company are using as they need to make sure that they are not wasting the resources they are having or utilising.

Swot analysis

Strength: - Starbucks strength in the market is their brand value and quality services they are offering in market to audience.

Weakness: - The competition in very high in the industry.

Opportunities: - Developing of the expansion of business and working on the necessary changes to increase results in market (Liu and et.al., 2020).

Threat: - Change in the public mindset and preference need to be understood or else it can be a threat to the business.


  • Segmentation

The company has to divide the customers according to the behaviour factors, psychological factors, etc to make sure that there is going to be a better place which they are going to have. Segmentation of the company is of between the age group of 22 to 60 which is a great number (Dudovskiy, 2017). There is no other segmentation which the company is having on the base of gender, caste, etc to make sure that they are fair to all.

  • Targeting

The company is targeting the upper class because of the pricing factor as well as the quality which the company is providing to the people. There has to be a good focus which the company must have to make sure that they are having a good sense of working and make sure that the company is having the right economic factor.

  • Positioning

Positioning has to be done in the market effectively so that the company is having the right working and standards (Wahyuni, Fahada and Atmaja, 2019). There is going to be maximum customer base which the company is going to have when there are right actions and improvement which are fixed for the company to have which is a great factor for the organization to have.


It is very important for the company to make sure that the processing of the organization is being well evaluated and improvement in the working as well. Monitoring is good for making sure that there is good team working and have the right decisions as well which can be made in the company so that there is good changes which is going to be present.


According to the report, macro and micro factors have a significant impact on businesses such as Starbucks. To assess the impact of external factors, a PESTEL analysis was performed in the report above. The internal capabilities, skill set, and structure were then presented through the SWOT analysis. Starbucks' competitiveness in the emerging market and approaches to acquire competitive advantage were investigated using Porter's Five Forces Model. Various measuring and formation process were provided to ensure that the plan's efficiency was monitored in order to meet the organization's objectives. The company must ensure that the proper actions are being produced in the organisation efficiently in order to ensure that there are higher benefits available.


Books and Journals

Antamoshkina, O.I. and Zinina, O.V., 2019, May. A methodology for assessing the prospects of modifying business strategy of an enterprise in the external environment. In IOP Conference Series: Materials Science and Engineering (Vol. 537, No. 4, p. 042023). IOP Publishing.

Bai, C.A., Cordeiro, J. and Sarkis, J., 2020. Blockchain technology: Business, strategy, the environment, and sustainability. Bus. Strategy Environ. 29(1). pp.321-322.

Barbosa, L.C.F., de Oliveira, O.J. and Santos, G., 2018. Proposition for the alignment of the integrated management system (quality, environmental and safety) with the business strategy. International Journal for Quality Research. 12(4).

Ciampi, F and et.al., 2020. The big data-business strategy interconnection: a grand challenge for knowledge management. A review and future perspectives. Journal of Knowledge Management.

Eikelenboom, M. and de Jong, G., 2021. The impact of managers and network interactions on the integration of circularity in business strategy. Organization & Environment. p.1086026621994635.

Holotiuk, F. and Beimborn, D., 2017. Critical success factors of digital business strategy.

Lim, E.K., Chalmers, K. and Hanlon, D., 2018. The influence of business strategy on annual report readability. Journal of Accounting and Public Policy. 37(1). pp.65-81.

Lin, Y.E and et.al., 2021. Corporate social responsibility and investment efficiency: Does business strategy matter?. International Review of Financial Analysis. 73. p.101585.

Liu, C.H and et.al., 2020. Co-competition, learning, and business strategy for new service development. The Service Industries Journal. 40(7-8). pp.585-609.

Matzembacher, D.E. and Meira, F.B., 2019. Sustainability as business strategy in community supported agriculture: Social, environmental and economic benefits for producers and consumers. British Food Journal.

Moktadir, M.A and et.al., 2020. Critical success factors for a circular economy: Implications for business strategy and the environment. Business strategy and the environment. 29(8). pp.3611-3635.

Pucheta?Martínez, M.C. and Bel?Oms, I., 2019. What have we learnt about board gender diversity as a business strategy? The appointment of board subcommittees. Business Strategy and the Environment. 28(2). pp.301-315.

Rehman, A.U. and Anwar, M., 2019. Mediating role of enterprise risk management practices between business strategy and SME performance. Small Enterprise Research. 26(2). pp.207-227.

Siltaloppi, J., Rajala, R. and Hietala, H., 2020. Integrating CSR with business strategy: a tension management perspective. Journal of Business Ethics. pp.1-21.

Suoniemi, S and et.al., 2020. Big data and firm performance: The roles of market-directed capabilities and business strategy. Information & Management. 57(7). p.103365.

Wahyuni, L., Fahada, R. and Atmaja, B., 2019. The effect of business strategy, leverage, profitability and sales growth on tax avoidance. Indonesian Management and Accounting Research. 16(2). pp.66-80.

Yuan, Y and et.al., 2020. Business strategy and corporate social responsibility. Journal of Business Ethics. 162(2). pp.359-377.

Yuliansyah, Y., Gurd, B. and Mohamed, N., 2017. The significant of business strategy in improving organizational performance. Humanomics.

Nair, R.K and et.al., 2021. The effect of Starbucks Marketing Campaigns on Consumer Buying Behaviour. Asia Pacific Journal of Management and Education (APJME). 4(1). pp.72-81.


5 Benefits of SWOT Analysis for Your Business, 2019. [Online]. Available Through: <https://www.startupguys.net/5-benefits-of-swot-analysis-for-your-business/>.

Dudovskiy, J., 2017. Starbucks Segmentation, Targeting and Positioning – Targeting Premium Customers with Quality Products and Service. [Online]. Available Through: < https://research-methodology.net/starbucks-segmentation-targeting-and-positioning-targeting-premium-customers-with-quality-products-and-service/>.

PESTLE Analysis in Digital Marketing, 2019. [Online]. Available Through: < https://www.drivedigital.in/pestle-analysis-in-digital-marketing/>.

Starbucks SWOT Analysis, 2021. [Online]. Available Through: <https://brandongaille.com/starbucks-swot-analysis/>.

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