Effects of the mission and vision of Starbucks

The Impacts of Starbucks Mission, Vision, and Primary Stakeholders on its Overall Achievement

In order to maintain its position as the top supplier of high-quality coffee, Starbucks’ vision has been a major factor. Starbucks is currently the world’s largest coffee company. Additionally, by opening new stores, Starbucks has increased its global expansion. This is due in part to the vision statement’s growth component (U.S SECURITIES AND EXCHANGE COMMISSION, 2017). On the other hand, a mission statement aids in articulating the purpose of an organization as well as how its major constituencies will be met. Starbucks has been able to cultivate enduring relationships and grow its business in part because of the elements that make up its mission statement (Starbucks, 2017). Finally, the skills, experience, and knowledge of each primary stakeholder have helped in furthering the company’s long-term goals to date. For example, the success of the company has been enabled by the ability of employees to serve consumers proficiently. On the other hand, stockholders and customers have ensured success by providing capital and product feedback respectively.

Starbucks’ Five Forces of Competition and their Impacts on the Company

Starbucks’ achievement is based on the company’s ability to address the negative effects of the five forces of competition that are outlined by Porter. A large number of coffee firms and low switching cost contribute to the strong force of competition that the company faces (“Starbucks Corporation SWOT Analysis,” 2016). This is arguably Starbucks’ top priority challenge that might impede future growth. At the same time, the low switching cost and availability of substitutes, which are considered a strong force, as well as the small size of individual buyers, which are a weak force, contribute to the resilient bargaining power of consumers. This means that strong customer power is also a top priority challenge that might affect the company’s ability to retain its market share given that buyers can easily shift to other brands. In addition, there are substitutes in the market. However, the fact that there are varied suppliers, large number overall supply, and a moderate number of individual suppliers, means that the company faces a weak bargaining power from suppliers. This has majorly contributed to Starbucks’ competitiveness, as the company is able to have more control over its suppliers. Starbucks also faces strong force when it comes to the threat of substitution (“Starbucks Corporation SWOT Analysis,” 2016), mainly due to the availability of alternatives, low substituting cost, and reduced price of substitutes. This is a concern for the company because it can reduce overall profitability. Finally, new entrants could have a substantial but not strong effect on the company’s coffee business. This is mainly due to Starbucks’ strong brand.

Starbucks SWOT Analysis

Strengths

The company has one of the strongest and renowned brands in the world. In addition, the large loyal customer base that prefers Starbucks’ high-quality products and brand is considered one of the company’s strengths. Finally, Starbucks has diversified business enabled through strong subsidiaries (U.S SECURITIES AND EXCHANGE COMMISSION, 2017).

Weaknesses

Upper price points, replicable products, and generalized standards for most offerings are the major weaknesses of the company.

Opportunities

Expansion into emerging markets such as Asia, Middle East, and Africa is one of the major opportunities the company could use to drive growth (Starbucks, 2017). In addition, increased diversification is an opportunity that Starbucks could use to improve its competitiveness. Finally, alliances with other firms is also an opportunity that can strengthen the company’s growth.

Threats

Competition from low-priced coffee companies and imitation are the two major threats that could have a negative effect on the company (“Starbucks Corporation SWOT Analysis,” 2016).

Strategy for Capitalizing on Strengths and Opportunities, and Minimizing Weaknesses and Threats

To maximize on opportunities and strengths, Starbucks can adopt a differentiation and market development strategy. This could also go a long way in minimizing the company’s weaknesses and threats. Differentiation, in this case, would involve making the company’s products different from competitors (Rothärmel, 2017). For example, the company can emphasize on specialty products and ingredients. In doing so, the firm could easily stand out and fend off competitors who sell similar products. On the other hand, the firm can adopt market development as a secondary intensive growth strategy. This strategy can help Starbucks in capitalizing on opportunities presented in the emerging markets such as Asia. Consequently, this would support the company’s growth by generating revenues in new segments (Rothärmel, 2017).

Various Levels and Types of Strategies Starbucks Could Use to Maximize its Competitiveness and Profitability

Starbucks Corporation could adopt business and corporate level approaches to gain a competitive edge and enhance productivity. A corporate level strategy that can be utilized by the company is diversification. Starbucks can diversify its product variety by altering the existing ones or introducing new products. Diversification can provide growth prospects for the company by increasing sales (Rothärmel, 2017). Conversely, the business level strategies that Starbucks can implement are cost leadership and innovation. Starbucks can implement cost leadership strategies by reducing its production cost. For example, to be a low-cost producer, Starbucks can ensure it realizes an economy of scale, better access to raw products and invests in propriety tech. Innovation is a strategy aimed at increasing profits through implementation of innovative products and services (Rothärmel, 2017). Starbucks can achieve this by localizing its products and the setting of its shops and investing in technology, thereby acquire a competitive edge.

Communication Plan that Can Be Used To Communicate the Above Strategies to Each Stakeholder

Creating an effective communication plan will be important for the company. Starbucks has to ensure that the communication plan can enable the company access all stakeholders in the most effective manner. This paper recommends that the company should use Newsletters/email/posters in communicating the above strategies to stakeholders. The strategy will ensure that the information is delivered to a wider group of stakeholders. It is, however, difficult to determine whether the messages are delivered or understood since there may be no feedback. Therefore, the company can make follow up calls to confirm whether the information was delivered.

Corporate Governance Mechanisms and Their Effectiveness in Controlling Managerial Actions

Internal Mechanism

The first set of governance for Starbucks originates from its internal mechanisms, which is mainly the board of directors that comprise of twelve members (Starbucks, 2017). The board of directors has been effective in monitoring the company’s operations and implementation of necessary corrective measures. In addition, they ensure that the company’s internal shareholders interest and goals are met. Starbucks internal mechanisms have been effective in ensuring smooth company operations and managing Starbucks’ performance appraisal structures.

External Mechanism

External governance mechanisms are managed by parties external to the company such as regulators, the government, trade unions among others. The aim of Starbucks’ external control mechanism is to satisfy the goals of the external stakeholders, for example, legal compliance. These mechanisms have been effective in ensuring ethical and legal operation in each Starbucks store and adherence to best business practices guidelines (Starbucks, 2017).

Effectiveness of Leadership within Starbucks

Starbucks is the premium producer of high-quality coffee that is sold in more than 25,000 global stores (Starbucks, 2017). Starbucks has realized this success due to its effective leadership. Howard Schultz’s, Starbucks former CEO, management style was defined by the motivation and inspiration of the company’s workforce. His leadership ensured open communication between the management and the staff. Under his leadership, the employees were involved in decision-making and enjoyed flexible work schedules. Ideally, Starbuck’s success can be attributed to Shultz leadership style that ensured collaborative participation between the management and the workforce. However, to improve the effectiveness of leadership at the company, there is a need to encourage employee development. Outstanding leaders understand the essence of developing their successors such that his or her leadership legacy is maintained (Shekari, & Nikooparvar, 2012). For example, Schultz should ensure that he transfers his ideals and leadership approaches to his successor, Kevin Johnson. In this manner, the new CEO can improve the existing strategies to ensure better employee commitment and performance as well as more company productivity.

Efforts by Starbucks to Be a Responsible Corporate Citizen and Its Impact on the Company’s Bottom Line

Starbucks implements varied CSR initiatives, for example, embracing diversity, ethical sourcing, participating in community service and environmental sustainability initiatives among others (Starbucks, 2017). The company has also developed corporate associations with various NGOs and CSR corporations that mandate it to comply with various social ethical and environment guidelines in its value chain. For example, the company develops community stores that work in conjunction will local non-profit organizations targeted towards offering customized services that satisfy local needs (Starbucks, 2017). In addition, Starbucks has structured its CSR communication in line with different shareholder’s preferences and needs. Starbucks CSR efforts have greatly contributed to the company’s positive image and reputation. This has not only improved the company’s relationship with its stakeholders but has also enhanced the firm’s financial performance. Starbuck’s commitment to the community and the environment has seen the company appeal to consumers with similar values, thereby increasing its market share and consequently profitability.

References

Rothärmel, F. (2017). Strategic management (1st ed.). New York, NY: McGraw-Hill Education.

Shekari, H., & Nikooparvar, M. (2012). Promoting leadership effectiveness in organizations: A case study on the involved factors of servant leadership. International Journal of Business Administration, 3(1), 54-65. http://dx.doi.org/10.5430/ijba.v3n1p54

Starbucks Corporation SWOT Analysis. (2016). Business Source Complete, 1-12. Retrieved from http://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=787b7d41-0259-4f1f-bf78-e6383684c426%40sessionmgr101&vid=0&hid=124

Starbucks. (2017). About Us | Starbucks Coffee Company. Retrieved from https://www.starbucks.com/about-us

U.S SECURITIES AND EXCHANGE COMMISSION. (2017, May 2). Form 10-Q: Starbucks Corporation. Retrieved from https://www.sec.gov/edgar/searchedgar/webusers.htmhttps://www.sec.gov/Archives/edgar/data/829224/000082922417000021/sbux-422017x10xq.htm#s69BA594E89DB7675A346FBDDFF3AFB1B