Starbucks is a leading coffee and coffeehouse company. It has outlets in more than 55 countries; the company success has been attributed to its appropriate marketing strategies (Starbucks Corporate website). This paper takes an analysis of industrial and company factors affecting it.
An industrial analysis undertakes an analysis of external factors affecting the company and likely to affect its operation. To undertake an analysis of Starbucks, the paper will focus on Porters five forces of industrial analysis.
Starbucks is respected as one of the international companies that have developed a good relationship with its suppliers. It ensures that the suppliers are paid in good time and they have good repo. Other than meeting the expectations of suppliers, it has programs targeted to ensure there is constant supply of coffee beans to the company. On its part, it ensures it gets quality form suppliers where a test of quality at delivery is conducted in every 250 bags; three samples are taken for quality test.
Barrier to entry
The coffee industry has many players who have different approaches to remain competitive. Starbucks success has been attributed to continuous improvements of its products and coming up with new products so that it can effectively enter different markets.
Threats of substitutes
There are different substitutes for coffee available, they include tea, cocoa, soya, soft-beverages alcohol among others as well other flavours by coffee companies. To ensure that it has remained competitive, Starbucks have embarked on good internal processes that ensure that quality coffee is roasted at the right temperature and desired blending is done accordingly. The company has also invested in coming up with new tastes to create a pleasant experience to its customers.
Customers are the most important part of a business, the relationship that a company has with its customers determines the success of the company. To ensure that the company enjoys from positive buyer perception, it has embarked on improving its products, prices and promotional process. It is with the same spirit that it has come up with different tastes as it expands to different countries and strategic locations.
The result of the above factors is the level of rivalry that the company has had; it has been successfully to be the world leading coffee and coffeehouse company respected for its environmental conservation programs (Paley 12).
Company analysis focus on internal factors affecting a company; as much as the company has been favoured by internal processes, it is only able to take advantage of the external processes because of its effective internal processes.
The company has a positive-to -success organisational culture; all employees for the good of the company support the culture. It believes in giving good services to its customers; this is only possible by having effective human resource management who are well motivated.
To do so the company conducts training seminars and provides appropriate working conditions to its employees. One policy that the Company has been respected for is environmental policies, the company grades and prices its raw materials from the production method used point of view.
A farmer who produces with minimal environmental damage gets high returns from the company. The company has enhanced good supplier’s relation. Innovativeness has been respected in the company were employees are encouraged to give inputs on the way forward for the company (Hooley and Saunders 72).
BCG portfolio Analysis
The model of analysis divides a business into four different areas; it looks as follows;
Starbucks have had increased sales in different tastes and blend of coffee. The company has embarked on innovations and developments of tastes to ensure that its main line of business is operating well.
The company has developed a strong brand name that it is offering a higher rate of returns from its assets than what is expected by the industry. To remain competitive, it has developed new tastes pin the market. The returns to its shareholders are higher than the industry rate.
They are areas that can be exploited for the benefit of the company. The company is facing an increased investment in new developments to ensure that it makes products for that beat its competitors. Such areas of concerns are in snacks development and trying of new tastes and blends.
They have low market share and demand; in Starbucks, it occurs when new products have been developed, it may take relatively long time to fully get into the market but when finally it gets into the market it becomes a cash cow.
The success of Starbucks can be attributed to effective internal processes, which have enacted mechanisms to understand external factors affecting the company and devised appropriate mechanisms. The company undertakes internal and external audits as a tool when making strategic decisions.
Hooley, Graham, and Saunders John. Competitive Strategy: the Key to Marketing Strategy. New York: Prentice Hall, 1993.Print.
Paley, Norton. The manager’s guide to competitive marketing strategies. London: CRC Press, 1999. Print.
Starbucks Corporate website. Starbucks. 2011. Web.