Free Case Study On SWOT Analysis

Analysis of Starbucks

Analysis of Starbucks

Introduction/ Summary

Starbucks as the name suggest is the “Star” or the world leading champion coffee restaurant located in United States. It started from the scratch as a small business entity from three young and business oriented gentlemen and had good destiny for their start up. Management skills were not adequate at the initial stages of the business which made it to close down some of its branches for quite some time to pave way for a series of transformation initiatives to elevate customers experience at Starbucks store. The transformation initiatives conducted were aimed at providing additional resources and tools for stores employees and also refreshing menu offerings at Starbucks. The problem was later solved by Schultz after his trip from Milan from where he learned that there is much more to be added in to the stores of Starbucks. He actually brought the Idea that the Starbucks need not to dwell on coffee beans alone but instead have wider focus on serving fresh brewed coffee, espressos, and cappuccinos and also incorporate the Italian version of coffee bar culture
Even though the idea was very diligent and smart in approach, the other two partners could not allow Schultz to practice the idea within the Starbucks management. Schultz was very sincere to his dreams and could not abandon it. He started seeking and lobbying for funds to start up a new restaurant where the Italian versions of coffee bar culture. Ironically, the first investor who gave him fund to start the business was one of his partners in Starbuck. They actually welcomed the idea and could sometimes offer some of Starbuck stores for the operation of the newly generated business idea. Howard Schultz later named his business as the Giornale venture which had the same activities as Starbucks. The success of Giornale Venture made Gordon Bowker and Baldwin to surrender the management of the Starbucks to Schultz who seem to be having enough managerial skills necessary for the growth of an organization. In his tenure period In the Starbucks coffee restaurant, he ensured that Starbucks branches improved on providing high quality service to satisfy the demand of their potential customers.

There are a number of facets that have been pronounced in the course of operation of the restaurant that influences the overall operation of the entity. The management team of the company, Starbucks, have effectively taken into consideration these factors in strive to improve the overall performance of the entity; however, there is need for the organization to indulge in extra extensive environmental analysis that will in proper identification of these aspects.

Strengths

In line with the past operations of the company presented, among the strengths that are made manifest include, proper managerial skills, customer analysis and required expertise among personnel. The constant activity of the firm to conduct customer analysis has been a major strength in the performance of the entity. At the inception of the operations, the organization undertook market analysis that has been of great essence in influencing the operations of the restaurant. Specifically, this aspect has made it possible for the restaurant to tailor services to meet the specific needs of the customers. The global market that the restaurant has can directly be attributed to this aspect of market analysis. Secondly, another strength that has been pronounced in the operations of the entity is the high levels of expertise of the management and employees in general. The skills among personnel have also been motivated by strong and focused vision that controls the various actions of the management. In strive to improve the levels of expertise among employees, the use of international workshops besides other forms of training have played a significant role to the company. The success that has been witnessed in the operations of the stores across the globe is directly attributed to proper planning and management. Prior budgeting activities that are witnessed in the course of organizational operations are directly attributed to the management. Through the extensive financial analysis and preparation of financial documents, Starbucks have curbed cases of financial distress over the years that could compromise key operations of the entity.

Weaknesses

In 1987, it is reported that the aim of the organization was to open 50 more stores within a time span of 5 years. This vision to some extent affected the quality of the services offered by the stores as major focus was made on increase in supplies. This aspect portrays weakness in the initiation of various policies of the entity. The period witnessed the organization realize low levels of sales and a reduction in the competitive edge that is attributed to the vision. In addition, poor market analysis was witnessed in 1987 during the entry of the organization in Chicago. It is stated that the market did not accept the brand of coffee that the organization presented. The situation risked the performance of the entity hence presenting the need for extensive market analysis before entry I various markets.

Opportunities

In the course of Starbucks operations, a number of opportunities have been presented that have greatly attributed to the success of the entity. Initially, the increasing size of the markets attributed to the increasing population has allowed the hotel to increase its supplies in a number of markets thereby increasing the profit volumes of the entity.

Threats

Owing to the global operations of the entity, a number of threats have been presented at various levels of organization operation. Initially, the global operation presents high levels of competition that risks the profit levels of the form. As a result of the ever increasing number of similar firms into the food industry, the organization has often strived to integrate competitive measures within the firm’s procedures. Aspect of manipulation of pricing strategies is presented to be central in competitive operation of Starbuck. This entails adoption of pricing measures that suits the targeted market.
The performance of Starbucks over the years can be assessed through the use of various financial ratios that will rely on the financial statements provided for the past financial years.

Current ratio

Through the use of liquidity ratio, the ability of the organization to meets its daily obligations is ascertained.
The presented table manifests the company’s ability to meet its short term obligations in a number of years. However, the year 2007 witnessed the total number of obligations of the company exceeding the value of its assets. The situation was devastating hence the essence of improvement made in 2008 through the realization of a positive liquidity ratio. The high incidence of high ratio presents an opportunity for the organization to expand its operational owing to the confidence created among customers through the ratios.

Profit margin ratio

Through the analysis of the net income and net expenditures over the years, it is revealed that Starbucks realizes high volumes of profits that are can be attributed to the various performance strategies that the management of the organization has over the years taken into consideration.

Starbucks mission

The mission of the restaurant was drafted in 1990 after long hours of debating on the company’s values and beliefs. The profound value in the effort of the management team to build the company by soul was that the company will never stop pursuing the perfect cup of coffee by buying the best beans and roasting them to perfection. The staffs performance and operation was guided by their mission of inspiring and nurturing human spirits through their belief of one person, one cup, and one neighborhood at time.

Strategies

The company had a list of strategies for conquering the competitive market but their focus were directed on the coffee purchasing strategy. They regularly send their ambassadors to coffee producing countries, building relationships with growers and exporter, and surveying on the agricultural condition and the crop yield to meet the company standards. All these plans worked to support the company’s principles and ethic in producing quality coffee.
In line with the analysis of the Starbuck organization, it is revealed that there is need for organization to often indulge in various analyses. Industrial analysis will be of essence to the firm in the adoption of measures that will allow for favorable competition. In addition, market analysis will aid in adopting operations that are tailored towards meeting the specific needs of customers. The management team should therefore critically examine these operational facets and make certain that only desirable courses of actions are implemented. Another aspect that will be important in the course of realizing high levels of performance in organization is the need to constantly undertake performance appraisal. This analysis will focus on comparing the performance of every employee of the organization with the set goals of the enterprise.