Situational Analysis of Starbucks Essay
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We start off with the organizational analysis’s corporate mission, products and services, leadership Organizational Culture, and Strategy. Next we analyze the firms resources by means of tangible & intangible resources, capabilities and core competencies. Then we move into the financials analysis which divides into subcategories such as valuation, growth, profitability, financial strength and management efficiency. The final aspect of the internal analysis is the SWOT analysis which clarifies Starbuck’s Strengths, Weaknesses, Opportunities and Threats.
The final closure of the Strategic Analysis is the recommendations for both internal and external analysis along with a conclusion.
2. 0. 0History The history of Starbucks starts in Seattle in 1971. (George, 2010) Three friends; Jerry Baldwin, Zev Sigel, and Gordon Bowker, who all had a passion for fresh coffee, opened a small shop and began selling fresh-roasted, gourmet, coffee beans and brewing and roasting accessories. (George, 2010) The company did well, but things began to change in the 80’s. (George, 2010)
McDonald’s has no issue with the generating locations and hitting targeted demographics.
Primarily because, McDonald’s is the oldest business in the food service industry. The most common demographic in the American trends are the tweens to teens segment. Here, the up and coming teenagers, or teenagers dive into a new hangout place in order to gain the “feel” and “experience” the coffee industry offers. Starbucks offers an influence in the youth of America into employment roles or simply influential leisure hangouts for teenagers.
Adam Smith’s “The Wealth of Nations” best defined competition amongst the market as Lassiez Faire – “A philosophy or practice characterized by a usually deliberate abstention from direction or interference especially with individual freedom of choice and action. ” However, no single firm, or group of firms, must ultimately have complete power over any industry because that firm would have the power to regulate prices of that particular commodity. (Dept. of Labor, 2011) This would be known as a monopoly.
Should a firm be in recognition of monopolistic power, they would be violating the Sherman Anti-Trust Act in practicing in unfair business practices. (Dept. of Labor, 2011) One example that led to unfair business practices is known as price fixing. (Dept. of Labor, 2011) Price fixing is defined as an agreement between business competitors selling the same product or service regarding its pricing. (Dept. of Labor, 2011) Other pieces of Government regulation is OSHA (Occupational Safety & Health Administration). (Dept. f Labor, 2011) Here these laws are backed by the federal governing body of the United States Department of Labor. (Dept. of Labor, 2011) Simple laws here give the employee factions laws to simply abide by in case of any unfair management practices such as quid-pro-quo. All firms must abide by both means of competition and OSHA’s regulator laws. The only real factor in the government/political segment that affects the industry is the EBIT (Earnings Before Interest in Taxes), because it defines the net worth after gross income a firm can accumulate in the coffee industry.