Starbucks
Starbucks Corporation is one of the popularly known organizations in the world. The organization was founded in 1971 in Seattle, Washington. The company specializes in a provision of coffee products to its customers, and it has 23,768 coffeehouses in the world. The organization has stores in Australia in which it's located in SYDNEY, Brisbane and Melbourne. The mission statement of Starbucks Corporation is of great importance to the organization since it reflects what its management and operations teams have to do to keep the business running and financially stable too. The organization's vision statement is, 'to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.' (Seaford, Culp and Brooks 2012, p.39). The statement clearly reflects the organization's goals and some objective towards achieving greater and remarkable results shortly. Starbucks Corporation operates in diverse economies in the world in which it has established coffee shops to serve its customers. (Seaford, Culp and Brooks 2012, p.39).
External environment
Various environmental factors are affecting Starbucks Corporation which is based on different aspects such as political and economic. This section is based on a clear analysis of the environmental factors affecting the organization's global operations. PESTEL analysis technique is used to aid in identifying the various environmental aspects affecting the corporation. PESTEL is an abbreviation for various environmental factors which affects or influences organization's operations. The factors are political, Economic, social, technological, environmental and legal factors (Team 2013, p.32) the discussion in this section will be divided or organized on the environmental factors affecting Starbuck Corporation.
Political factors
Starbucks Corporation in Australia is facing challenging issues in the process of sourcing raw materials. The process has brought a lot of attention to politicians in the country. This aspect has largely contributed to the organization's management establishing corporate social responsibility policies which guide adherence to social and environmental norms (Team 2013, p.32). The organization is much willing to follow the established sourcing strategies In Australia since it gives fair trade practices.
Laws and regulations are other political aspects which are affecting Starbucks Corporation operations. Some of the laws and regulations in Australia and other countries where the Company sources its raw materials are changing over time. The laws and regulations in those countries have been reinforced after increased activism, and political awareness is hence making them essential and of great importance to their economies.
The ever-changing tax policies in Australia are also affecting the organization's operations in the country. There is clearly that Starbucks Corporation sources most of its raw materials from some areas in Australia and developing countries. Governments in those States are after enhancing economic growth and development. This aspect has forced governments in such countries to keep on changing tax policies mostly those affecting internationally operated companies.
Economic factors
The economic recession Evident in Australia is one of the significant issues which is affecting Starbucks Corporation operations. This aspect is serious affecting the organization's operations since it dents its profitability more so its outlets Australia. The factor leads to shifting of some of the corporation's potential customers to cheaper alternatives offered by some Starbucks' competitors in Australia. The rising labor and operational costs is another factor which the organization's management is struggling to handle (Team 2013, p.32). This aspect is facilitated by the inflation rates in Australia and some economies where Starbucks Corporation has established shops. It leads to falling off the business's profitability level.
Social factors
Starbucks Corporation offers its products at low and affordable prices to its customers, but sometimes it's forced to lower the costs further for some individuals in the society to be able to purchase some goods. The organization is forced to lower the prices further since it needs to attract more customers from all social classes in the society. This aspect forces the organization to change the quality of its products to match the low prices.
Technological factors
Starbucks organization has heavily invested in technological aspects hence enabling effective and efficient operations. The Corporation has the partner with Apple Inc. to introduce app based discount coupons which are assisting it in coping with the ever dynamic mobile technology. The organization has also introduced WI-FI capabilities in all its outlets globally to enable customers to sip coffee while surfing.
Environmental factors
The organization has many business practices which are associated with activities associated with international advocacy agencies. These groups and some organization's customers have expressed various issues concerning the Corporation's operations. The Company's management team has to take this issue into account since it may lead to losing of potential and reliable customers since the expressed issues affect organization-clients trust (Zhenjia 2012, p.16 ).The organization has strict production rules and regulations which aids curb environmental pollution in all its outlets .
Legal factors
Starbucks Corporation management team should always be alert with the introduction of caffeine production, and consumption policies and rules by health sectors in Australia. The management should also ensure all laws are regulations in the home and foreign countries are observed all the times.
SWOT analysis
This section identifies and discusses various aspects affecting Starbucks Corporation Operations In Australia. SWOT analysis in the appropriate technique to use since it will aid identify the organization's strengths, weakness, opportunities, and threats which it's facing in the market and industrial sector. The competitive advantages of the organization are also identified in this section.
Strengths
The organization has a strong and remarkable financial performance which has led to it being among the best Companies in the coffee and beverage in Australia and global industry. This aspect has initiated its growth and expansion hence being able to penetrate many markets in the world. Starbucks Corporation is valued at $4 billion which makes it one of the best strengths in the market.
The organization has strong philosophical techniques or strategies which make it the best in the coffee and beverage industry. The philosophical techniques are based on various aspects such as; popularity and symbolic nature of its brand. The brand symbolizes excellence and quality since it offers its products at affordable prices hence attracting more customers.
The corporation is ranked as the largest coffeehouse in Australia and globally because of its size and ability to produces its products in large volumes. This aspect enables it to offer its products at low and affordable prices compared to its competitors in the market.
Starbucks is popularly known for its ability to pioneer people management in an industry where workers' skills and soft skills contribute to the difference between success and failure. This aspect clearly portrays that, the organization has a welcoming and good working conditions for its workers which translate to an ability to offer the best services to its customers.
Weaknesses
Starbucks Corporation depends heavily on its primary and key inputs such as coffee beans. This aspect makes it depend on the costs of the coffee beans since it is directly connected to its profitability levels (Adams, 2012, p.26). The organization is highly sensitive to the fluctuation rate of coffee beans hence it's forced to diversify its products to curb the risks.
The Company has been facing challenging issues or cases in its procurement practices which are mostly initiated by social and environmental activists who points out some of the unethical practices of coffee beans outsourced from some developing countries ((Adams, 2012, p.28). The organization has been severally accused of violating some Fair coffee trade policies.
The organization places the prices of its products in premium to enable middle-class individuals to afford them in all its market segments. This aspect places its coffee products outside the budgets of some consumers who prefer shifting or associating with its competitors such as McDonald's and Burger King.
Opportunities
Starbucks Corporation has an opportunity for the supplier's networks by its procurement team searching for more reliable suppliers for it to diversify its inputs. This aspect will assist the organization from been price sensitive for coffee beans hence avoiding some supply chain risks which it is facing at the moment (Zhenjia, 2012, p.16).
The organization has an opportunity to penetrate some developing markets in Australia and in the world hence expanding its customer base. Some of the countries which the Company can establish more outlets are China and India.
The Corporation has an opportunity to expand its product offerings by introduces other products which will enable it to boost its competitive level in Australia. This aspect will enable it to compete out some organizations such as McDonald's and Burger King in its market segment.
Starbucks Corporation can increase the number of outlets in the Australia since it will assist it to expand its market share. This opportunity complements others discussed in this section, and it will be of great important to the organization since it will enable it to attract more clients (Zhenjia, 2012, p.16).
Threats
Starbucks Corporation is facing a serious threat from the ever rising prices of coffee beans from the developing and outsourcing countries in Australia. The supply chain associated with this issue has a lot of risks such as price fluctuations of this significant input which is primarily initiated by ever changing market policies in the developing countries.
The organization is facing stiff competition from some of its competitors in the coffee and beverage industry In the Australian market (Desbrow, Henry and Scheelings 2012, p.115). This aspect is brought by the fact that some emerging companies can offer coffee products at very low prices since they offer low-quality drinks which all consumers in the market can afford at any given time.
Starbucks organization is facing a serious challenge in its supply chain because of sudden disruptions from the governments in the developing countries in Africa where they source some of its raw materials. These countries are faced with ever changing taxation policies imposed by the governing bodies.
Recommendation
Starbucks Corporation managements team beliefs to have a positive impact on all communities in the world where they have located its outlets. The organization is focused on elevating its partners, suppliers, customers and neighbors to create and enhance positive change in the society. To enable this, the corporation has initiated various aspects by its organizational goals to create a healthy environment to facilitate the smooth existence of every individual in the society (Tate, Ellram and Kirchoff 2013, p.44). This aspect has been enhanced by the organization's ability to source ethically and sustainability since it is committed to offering high quality ethically purchased and keenly and responsibly producing its products.
The organization creates opportunities for all communities where it is located. This aspect has been evident by the organization's management ability to invest in education, training, and employment. This aspect has assisted communities to boost the literacy level of its members since Starbucks Corporation facilitates everything for them (Seaford, Culp and Brooks 2012, p.39). The initiative enables the organization to recruit competent workers who can give back by facilitating their efforts and potential to its success in the market.
The Company leads in green retail since it's committed to minimizing environmental footprint and inspiring other individuals and agencies to do the same. This aspect has benefited communities in the world since they can live in the best environment where they cannot suffer from some dangerous infections (Zhenjia 2012, p.16). The initiative also helps the organization since it can employ good workers from such communities.
Starbucks Corporation encourages service and citizenship in all the countries they operate from. This aspect has been enabled by the fact that the organization is committed to offering Starbucks as a Company for public conversation and boosting public engagement via service and promoting people to register as voters. This aspect has facilitated the communities to consider their responsibility towards governance by registering as voters who enable them to elect responsible leaders. This aspect has enabled the organization to attract more customers in all the countries they establish their outlets. This aspect is the primary reason why Starbucks Corporation has been able to establish more than 23000 stores globally.
References
Adams, J. 2012. Australia's American coffee culture. Australasian Journal of Popular Culture
Desbrow, B., Henry, M. and Scheelings, P., 2012. An examination of consumer exposure to caffeine from commercial coffee and coffee-flavored milk. Journal of food composition and analysis
Tate, W.L., Ellram, L.M. and Kirchoff, J.F., 2013. Corporate social responsibility reports: a thematic analysis related to supply chain management. Journal of supply chain management
Team, F.M.E., 2013. PESTLE Analysis. Strategy Skills. Free Management E-books.
Seaford, B.C., Culp, R.C. and Brooks, B.W., 2012. Starbucks: Maintaining a clear position. Journal of the International Academy for Case Studies
Zhenjia, Z.H.A.N.G., 2012. Study on Competitive Advantages of Starbucks Surfers' Paradise Coffee Shop. Management Science and Engineering