This is a report about Starbucks and how it understands internalization and sustainability and how the company is managing all the aspects of business. The author interviewed on of the senior managers of the company in charge of management. He gave out the history of the company and how it has ensured it remains competitive giving its SWOT analysis. The paper gives a report about how the company understands about internalization and sustainability giving its strengths, weaknesses as well how it embraces diversity and multiculturalism.
Starbucks is an American global coffee company and coffee house chain which is headquartered in Seattle, Washington. Starbucks was founded in 1971 as a single coffee shop and has since become the largest coffee house company globally with about 21,000 stores in 62 countries. Most of the company’s stores are located within the United States. However, it has since expanded to other countries across the world using a multitude of well-focused strategies that enable the organization to capture a larger market share and remain on top of the competition. The company retails specialty coffee and has continuously introduced new products that contribute to its competitiveness. Through its strategies, it has been able to create a coffee culture in regions and communities which were traditionally non-consumers of coffee. The company has also been able to dominate the coffee market and create a brand synonymous with loyalty, integrity and longevity (Larson 36).
Analysis of Starbucks
Starbucks is one of the most successful companies in the world. Today, the company has the highest revenue among the private companies and at the same time ranked among the world’s greatest employers. However, despite the success of the company, it has been faced by various cultural issues that hindered its growth in some markets, and have even caused it to shut down in some countries. One of the issues is the management techniques. The company has failed to realize that the management technique used in one country may not necessarily fit another. In addition, the use of English speaking managers even in regions where English is not part of their dialect has been a major problem. The company has also been faced by cultural issues in relation to ethical codes.
There are factors that constitute the company’s strengths, weaknesses, opportunities and threats. These factors have to be clearly identified so that effective strategies can be adopted for the organizational success.
Strengths and Weaknesses
Starbucks has several strengths that give it a better competitive advantage in coffee and beverage market. The company is a market leader in coffee industry and this makes smaller company unable to compete.The other key strength is the resources that allow rapid expansion both in the domestic and global markets. Starbucks also has strong brand recognition by consumers globally. It has been known for high quality products and personalized services. One of the key strengths of Starbucks is cost leadership strategy. The company has been able to remain competitive because of being able to provide quality and reliable services to customers at relatively lower cost than its close competitors. Its focus on quality products has also compromised its ability to incorporate customers’ views when producing its products. For example, the use of non-fat milk leads to production of low quality products hence the company might ignore such requests Starbucks (Corporation SWOT Analysis 10).
The company may also take advantage of the low investment requirements to invest more in the emerging markets. There is also opportunity to diversify its products. Starbucks can diversify its products to venture into other food products and non food products. Starbuck company faces competition from both large scale coffee retailers and small scale coffee retailers. The core competence of the company is its positioning of its products. The company positioning of its products as quality products has made the company gain competitive advantage over its competitors (Corporation SWOT Analysis 10). It has been able to dominate the coffee business in the United States and around the world.
Despite numerous strengths, the company also has some internal weaknesses. One of the weaknesses is pricing. Starbucks’ prices are the highest in the industry and this has been used by some of its competitors such as McDonald’s to take some of its market share (Roby 48). The other weakness is that it mainly relies on coffee for its revenue and this may affect its performance. This makes the company vulnerable to escalating coffee prices (Corporation SWOT Analysis 10).