STARBUCKS VALUE CHAIN ANALYSIS

Michael Porter introduced the value chain idea, and he identified how consumers amass themselves on the chain of activities that result in a final product or service. The value chain analyzes a company using the organization’s strategic activities and identifies the impact on the organization’s cost and value behavior. Porter identifies a value chain as the organization’s internal processes that enable the company produce, deliver, sell, and support its goods and services. Instead of the cost is treated as an expense in the profit and loss account, it is seen as the company’s accumulated wealth on the balance sheet. Therefore, according to Porter, a company’s value chain, and its performance, suggests the organization’s history, strategy, underlying economic activities and the organization’s methodology of implementing its plan.

34) The vision statement comprises of the following components, which are relevant to the company’s operations: 1. Growth 2. Provide the best quality coffee in the world 3. Uncompromising principles 4. Be the leading provider Analysis section Industry Overview The company functions and competes in the local snacks and coffee industry. 7% market share; Dunkin Brands has a 24. 6% while the other competitors such as Tim Horton’s, Costa Coffee, and McDonald's share the rest of the market (Garcia, 2017, p. Starbuck’s Macro Environment PESTLE analysis The PESTLE analysis is a study that aims at looking at an organization’s political, economic, social and technological, legal and environmental external factors (Perera, 2017, p. Political The political dynamics identify how the government laws and regulations affect a business. Some of the external political factors that influence Starbuck’s company include taxation policy, employment law, international stability, and government stability.

This factor will impact the organization positively since there will be an increase in the customers’ purchasing power which in turn increases the company’s revenue. Additionally, economic growth has been witnessed in many developing countries, and this has provided an opportunity for the organization to make its global market bigger. However, the development of labor unions has had a negative impact on the company, since these unions have resulted to an increase in the cost of labor and this has led to a narrower profit margin for the organization. Social factors Social aspects are the institutions and forces in the society that influence the consumer’s perceptions, behaviors, and preferences. There has been a growth in the coffee culture across the globe, and this has presented itself as an opportunity for the organization since there has been an increased demand for the organization’s products.

Legal issue The organization has to be keen on the statutory factors. Some of the legal issues include the employment laws that restrict employment of different individuals, for instance, the student work law. Environmental factors The organization is focused on keeping the environment clean and friendly. However, Starbucks customers contribute to the pollution problem. This is mainly because most customers who buy the coffee and proceed consuming it outside the shop, often leave the cups anywhere in the street. Operations The organization buys, roasts and sells premium quality coffee and other coffee products Outbound logistics The company makes its products available to its customers through its stores and other licensed outlets. Marketing and sales The company has invested in modern marketing strategies whereby it has capitalized in technology to reach to its broad market base.

Services Customer service is the company’s most significant priority whereby it trains its employees on providing excellent services to its consumers. Supporting activities The supporting activities include technology development, the company’s infrastructure, procurement, and human resource management. Starbucks’ marketing strategies The company focuses on the following principles in its marketing strategies: a) Concentrating on the place and product elements in the marketing mix The marketing mix has various features, which include people, place, product, promotion, price, physical evidence, and process. The brand concentrates on the experience each store creates. This has been the foundation of Starbuck’s values and philosophy. For instance, in the United States, Starbucks has incorporated exemplary design principles whereby it stores are built from unused shipping containers.

These stores are then decorated neatly in alluring ways using lighting arrangements or definite materials. Starbuck’s operation management The firm’s operation management addresses various areas in which the organizational management has to concentrate. For instance the block chain used by the organization, make work easier since it indicates quality, ripeness, coffee cherry size and helps in grading (Elliott, 2017, p. (SOPER, 2017, p. 2) Starbuck’s SWOT An organization’s SWOT analysis is a breakdown of the company’s strengths, weaknesses, opportunities, and threats (50MINUTES. COM. , 2015, p. Some of Starbucks’ opportunities include: a) The growing population of coffee consumers b) People who reside in urban areas are a good market for the organization’s coffee c) The company’s initiative to co-brand with other companies dealing with foods and drinks.