Strategic Management Analysis - Starbucks in US Essay

Strategic Management Analysis - Starbucks in US - Essay Example ..............................................................................14 Figure 3: Number of stores in United States......................................................................15 Figure 4: Value of Gift Cards.............................................................................................15 List of Tables Table 1: Coffee Industry Analysis......................................................................................9 Table 2: Opportunities & Threats.......................................................................................12 Table 3: Strengths and Weaknesses....................................................................................16 1. Introduction Everyday millions of Americans walk into Starbucks coffee shops and live the unique experience offered by it. Despite the fact that US coffee industry is saturated with many giant organizations such as Dunkin Donuts, McDonalds and Peet’s, the experience that Starbucks offers is exclusive and acts as its niche. No other restaurant or brand offers a coffee house full of technological interventions, luxury and comfort, aroma of freshly roasted and grinded coffee beans. Starbucks is not just a coffee; with its extensive chain of stores it has become part of American life style. This research paper is intended to identify strengths and weaknesses of Starbucks and also the opportunities and threats faced by it. In the light of these identifications, strategic fit analysis would help in understanding the strategies adopted by Starbucks and helps it in exploiting these opportunities, mitigating threats and weaknesses and further enhancing its strengths. 2. Task A 2.1 PESTLE Analysis 2.1.1 Political Analysis Starbucks initiated its business from United States but has extended it exponentially into other regions as well, however the United States remains its major market. Current political issues faced by it in US surround its strategic alliances, agreements wit h vendors, taxes and government policies. Starbucks has been importing its raw material mainly coffee beans from other parts of the world. The quality of the coffee beans serves as a critical factor for Starbuck’s success and an advantage over other competitors. Government tariffs and political relations between the US and other countries have a direct impact on the whole beverage industry and in extension on Starbuck’s business performance. A thorough analysis of various indicators below, exhibit and inquire the performance of Starbucks as a business entity. 2.1.2 Economic Analysis Few economic factors having the tendency of affecting Starbuck’s survival and development in United States; these factors are consumer ability to purchase, tariffs, exchange rates, and industry environment. Like stated earlier, Starbucks has strategic alliances with a substantial pool of suppliers but most of them are from other countries. The always fluctuating exchange rates result in higher costs passed on to the consumer or reflected in the form of lower profit margins. Furthermore, overall economic scenario