Evaluation Essay on Starbucks Company

Description of the Firm and the Industry

The Starbucks Company is an American firm that operates in the snack store and retail coffee industry. It is a premier roaster, retailer, and marketer of specialty coffee across the world. The product mix of the corporation comprises of handcrafted and roasted quality coffee with over thirty blends and a single source premium coffee, fresh food, tea, and many other beverages (Luttinger, Dicum & Dicum, 2006). Besides, Starbucks markets do market the mix of its products with different brand names with a portfolio of firms like Evolution Fresh, Tazo, Starbuck Refreshers, and Teavana. Further, the firm also supplies fancy commodities such as coffee mugs which have the logo of Starbucks (Gilbert, 2011). Currently, the firm also sells movies and books that relate to the stores' localities with the specific and seasonal products of the company.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

The company utilizes technology in the brewing, marketing and advertising its products. It makes use of the available technology in the market like social media platforms like Facebook and Twitter and its website to market its brands. The firm uses the social technology in the industry to bring its customers back into its stores through their feedback and ideas on their experience and the brand. In addition, the company accepts mobile purchases and payments from customers.

The General Environment

The Starbucks Corporation operates in a dynamic environment. With the changes in the world, controllable and non-controllable forces affect the business. The general environment of the company comprises of internal and external forces that affect the process of making decisions. The environmental factors comprise the external and internal factors (Bussing-Burks, 2009). The components of the environment are the shareholders of Starbucks Company, regulators, the firm's culture, the working conditions, and company board of management. The internal environmental factors can be strengths or weaknesses to the company.

The general environment is a set of nonspecific elements that surround the organization. The elements affect the activities of the firm in one way or the other. The compositions of the general environment are, the Political-Legal, economic, socio-cultural, international, and technological factors. Finally, the target customers and the conditions of the market affect the operations of the company (Bussing-Burks, 2009).

Industry Environment

The industry environment of Starbucks gives rise to threats and opportunities. The strategic competitiveness in the industry and the market like the diversification of products by the competitors may be a threat in the industry ("Company Information", 2018). For instance, McDonald is diversifying its beverage menu and competitors like Costa Coffee compete parallel to Starbucks as they offer similar products and have a similar base of consumers.

The ability of the company to earn above its competitors is a great opportunity. By taking advantage of economies of scale, the firm gains a higher profit margin than other players in the industry. The industry environment also allows the companies to have their own strategies and this makes Starbucks strategize on its cost structure to gain opportunities like paying less for the products which they buy in bulk. Due to the changes in technology, the company has an opportunity of using the modern technology to increase its production.

Other Players

There are many players in the industry in which the Starbucks operates. The competitors to the company engaged in the selling and the distribution of the coffee beverages. Costa coffee is one of the largest players in the coffee industry and it comes second after Starbucks. Also, it is the largest coffeehouse in the United Kingdom. McDonalds McCafe is the other player in the market with a big share in the market (Encyclopedia of global brands, 2013). The company has a huge number of stores in the world. McCafe specializes in coffee, food, and other beverages. Dunkin is another player in the coffee and donuts industry and it is located in the United States. Lastly, Cafe Coffee Day is the other key player in the coffee industry in the world. The doughnut shops, coffee shops, restaurants, and retailers act as the main competitors to the company in terms of the distribution channels.

Mission and Vision Statement of Starbucks Company

The mission of the company is to nurture and inspire the spirit of a human-one person, one cup and the neighborhood at a time. The mission of the company is a reflection on the philosophical purpose of the corporation that keeps it running ("Mission Statement", 2018). The vision statement of Starbucks Company is to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow ("What Is Starbucks' Vision Statement?" 2018). The Corporation achieves its vision by its continuous expansion as the growing coffee company and coffeehouse globally.

The vision statement and the vision statement of Starbucks Company is a representation on how the company emphasizes on leadership in the coffee market and industry (Bailey, et al). The mission statement of Starbucks Company does focus on its philosophical purpose. Besides, the vision of the corporation is a reflection on the strategic direction of the company on what it aims to achieve in the future.

Resources, Capabilities, Competencies, Value Chain, and Cost Structure

The company has resources like experienced employees, automated equipment which provide consistent taste and saves time in production, and a customer service that handles issues of customers. Starbucks has a capability of retaining its employees, offering quality customer care services, and strategizing in the market ("Suggestion for Strategizing the Korean Coffee Company through Starbucks' Strategy in Market", 2013). The core competency of Starbucks is to leverage product differentiation by offering a mix of high-quality snack and beverage premium products ("A Study on Resources, Capabilities and Core Competencies of Starbucks | Kibin", 2018).

The value chain of the company is as a result of the development in the technology. The value chain helps the company to identify the operations that create competitive advantage and value to the business (Wu, 2017). It consists of support and primary activities of the business. The primary activities include outbound logistics, service, sales, operations, inbound activities, and marketing as they involve in the creation of value directly.

The cost structure of Starbucks aims at reducing the prices of coffee. The company makes purchase contracts by buying coffee from its supplies in a fixed-price commitment so that it does not feel the outcomes of coffee price fluctuations ("Yahoo is now part of Oath", 2018). Also, the company does hedging by arranging to sell its products on a particular date in the future thus minimizing commodity risks.

References

A Study on Resources, Capabilities and Core Competencies of Starbucks | Kibin. (2018). Retrieved from https://www.kibin.com/essay-examples/a-study-on-resources-capabilities-and-core-competencies-of-starbucks-VLQMqe

EbA Study on Resources, Capabilities and Core Competencies of Starbucks | Kibin. (2018). Retrieved from https://www.kibin.com/essay-examples/a-study-on-resources-capabilities-and-core-competencies-of-starbucks-VLQMqeEb

Bailey, J., Rainer, S., McHale, C., & O'Rourke, J. Starbucks Corporation.

Bussing-Burks, M. (2009). Starbucks. Santa Barbara, Calif.: Greenwood Press.

Company Information. (2018). Retrieved from https://www.starbucks.com/about-us/company-informationGilbert, S. (2011). The story of Starbucks. Mankato, MN: Creative Paperbacks.

Luttinger, N., Dicum, G., & Dicum, G. (2006). The coffee book. New York: New Press.

Mission Statement. (2018). Retrieved from https://www.starbucks.com/about-us/company-information/mission-statementSt. James Press. (2013). Encyclopedia of global brands. Detroit.

Suggestion For Strategizing The Korean Coffee Company Through Starbucks' Strategy In Market. (2013). Foodservice Industry Journal, 8(2), 199-209. doi: 10.22509/kfsa.2012.8.2.010

What Is Starbucks' Vision Statement?. (2018). Retrieved from https://www.reference.com/business-finance/starbucks-vision-statement-4b0673f7c15858cc

Wu, H. (2017). What drives experiential loyalty? A case study of Starbucks coffee chain in Taiwan. British Food Journal, 119(3), 468-496. doi: 10.1108/bfj-08-2016-0349

Yahoo is now part of Oath. (2018). Retrieved from https://finance.yahoo.com/news/understanding-Starbucks-cost-structure-operating-170007296.html