First of all I will explain the external environment of Starbucks using PESTEL analysis, Porter’s five forces analysis and competitor analysis. Next will be an analysis of Starbucks’ strategic capabilities. These will be determined using a resource audit, a value system analysis, the identification of possible core competences and the identification of important stakeholders. After this I will present a SWOT analysis of Starbucks before discussing three possible strategic options open to the company. Using the information I generate I will decide upon the most suitable option and then critically evaluate all the models and techniques used.

Howard Schultz bought a Seattle coffee comp

A big problem facing Starbucks with this proposal is that there is government legislation in place to threaten this decision. There are strict rules enforced in Britain by the Competition Commission (which used to be called the Monopolies and Mergers Commission) to ensure that companies do not become overly dominant in any one sector through mergers. The deals are also monitored by the Takeover Panel to ensure that more rules — this time governing codes of conduct and market information — are adhered to. Starbucks is the market-share leader with 35% and Internet Cyber Cafes are in third place with 14%. These figures together would amount to almost half the market-share so this decision would be a prime contender to be rejected by the CC on grounds it would create an unfair monopoly in the market.

Buyer power is likely to be high if a number of conditions are in place. There is a concentration of buyers, particularly if the volumes of purchases of the buyers are high, the supplying industry comprises a large number of small operators, there are alternative sources of supply, the component or material cost is a high percentage of total cost, the cost of switching a supplier is low or involves little risk, there is a threat of backward integration by the buyer. This is high where there a few, large players in a market If there are a large number of undifferentiated, small suppliers The cost of switching between suppliers is low for Starbucks.

Numerous factors contribute to intense rivalry between existing competitors in an industry. This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is found in the centre of the diagram. The extent to which competitors are in balance, this is where competitors are of an equal size which creates intense competition as one of the competitors tries to gain dominance over the other, high fixed costs in an industry may result in price wars, differentiation is important as in a commodity market where products or services are undifferentiated there is little to stop customers switching between competitors. Starbucks do not really have any competitive rivals that are of similar size to them so there are not any rivals in the market that would be considered in balance with them. However, they must maintain their excellent standards and always be on the lookout for new innovations in order to stay as the market leader.

No organization is immune to threats. These could be internal, such as falling productivity. Or they could be external, such as lower priced international Competition.

Some topics in this essay:
UK Business, Resource Management, Coffee Agreement, Business Unit, Research Development, Holdings Ltd, Suitability Starbucks, Manchester United, Feasibility Starbucks, East Africa, †starbucks, coffee beans, market share, value system, five forces, core competences, swot analysis, resource audit, starbucks coffee, analysis page, five forces analysis, porter’s five forces, local national world, internet cyber cafes, world’s coffee consumption,