Write a 12 page paper on business Information obtained from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome, also posits to the effect that “Starbucks purchases and roasts high-quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of complementary food items, a selection of premium teas, and beverage-related accessories and equipment, primarily through company-operated retail stores.” The company also sells coffee products and tea through other channels like licensed retail stores. According to information obtained from its official website, Starbucks was established in 1985 and its operations are mainly guided by its mission statement: “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.”
The company also strives to be the world’s leader in production of fine coffee. Its success as the world leader in the coffee industry can be attributed to the differentiation strategy it uses. This report will specifically focus on the United States Segment where the company has its own stores as well as licensed stores. Starbucks is very popular in the US and of notable concern is the fact that its operations are also shaped by trade practices as well as regulations such as North American Free Trade Agreement (NAFTA).The economic forces in the US also shape the operations of the company. However, the US operating segment contributed 69% of total net revenues for the fiscal year 2011. 1.1 Task A: ANALYSIS OF STARBUCKS’ EXTERNAL ENVIRONMENT This section of the report critically analyses Starbucks’ external environment. PESTEL analysis will be used to analyze the macro environment while Porter’s five forces model will be used to analyze the micro environment.
This part of the paper will also identify the opportunities and threats that exist in the external market. 1.2 PESTEL Analysis There are various external factors that shape the operations of Starbucks and PESTEL is an acronym for political, economic, social, technological, environmental as well as legal factors impacting on the operations of the organization and this too is going to be used to carry out the external environmental analysis. The table in index 1 shows the external factors that impact on the operations of the above mentioned company. Starbucks FY11 Annual Report (2011) shows that the company managed to raise the highest amount of revenue of $11, 7 billion from its operations. This is the highest amount of revenue to be generated by the company after the global economic recession that was witnessed in the US around 2007-2009. The success of the company can be attributed to the external factors that are obtaining in the environment where the company operates.