General Environment Factors Mentioned in the Video
The three general environmental factors are socio-cultural, economic, and political. The social factor was that people were not used to having to drink coffee outside their residences, and it was an avenue that Howard Shultz initiated by establishing coffee cafes. It supported Starbucks to flourish and go public in its coffee business. However, the company suffered economically due to the great recession of 2007-2008, which negatively affected the sales revenues of Starbucks leading to its stock price drop by 50% (Shedd, 2019). This posed a serious threat to its survival in the global market as people averted from luxury coffee. In addition, the firm experienced political factor as, there was an issue in constructing Starbucks stores overseas such as in Singapore and Japan.
The Starbucks Reserve Roastery strategy
The Starbucks Reserve Roastery strategy was intensive and improved the company store experience. The large reserves were a creative marketing approach that inadvertently generated financial benefits for the corporation. The reserves created a positive experience between the company’s products, particularly coffee, and its consumers (Shedd, 2019). Through the practical illustrations at roasteries, consumers were exposed to coffee tastes; hence, preferences for the company were improved.
However, I do not think this strategy runs the eventual risk of cannibalizing nearby stores. This is because the reserve roasteries are costly to set up, creating them fewer in number. In addition, the roasteries were a marketing approach aimed at creating a premium experience for a given high-end market for Starbucks. These roasteries offer specialty products, whose values are twice the ones from the normal Starbucks shops. Therefore, it would be appropriate to assert that the typical Starbucks cafes and the reserve roasteries shall maintain their consumer bases (Kendle, 2019). Thus, the reserve roasteries are there to complement the typical Starbucks shops.
The Main Source of Starbucks’ Competitive Advantage
Starbucks’ main source of its competitive edge is excellent consumer services that further improve the coffee retailer’s attractiveness. The company duly recognized the paramount role of its workers in consumer-experiencing positions to maintain its high consumer service level. In addition, Starbucks gains from its product differentiation approach, which creates the brand to be competitive in the market.
Starbucks SWOT Mission Statement and Vision Statement
I do agree with the explanations given concerning Starbucks’ mission statement and vision statement. The document has presented its definition and illustration of the vision and mission of the company to help the reader understand. I agree that the vision of Starbucks centers on leadership in the sector. The mission statement is explained clearly with its significance to the company’s success. I give this document a grade A because of the excellent expressions and explanations of the vision and mission statements in detail.
Starbucks PESTEL Analysis
The PESTLE analysis was well explained in this document based on my observations and analysis. I agree with the economic aspects that Starbucks should take advantage of and exploit the growth of developing nations. Further, I agree that the government policies of enhancing infrastructure create opportunities for the company to have access to more suppliers and consumers. This reveals that the corporation has room for expansion and growth based on the external factors presented. Therefore, I give this document a grade A because of the solid explanations and analysis of the external factors affecting Starbucks’ growth.
Starbucks Five Forces
I agree with competitive rivalry is high as Starbucks has several competitors both large competitors, for example, McDonald, Dunkin Brands, Subway, Burger King, and small competitors. The competitors rival the company’s services and products at each market level. However, I disagree with the threat of substitutes being high because no trends are showing that the demands for coffee is declining while other beverages rising. On a rating of A to F, I will rate this document as B because of its detailed analysis of Porter’s five forces.
Starbucks Resource-Based View of the Firm/VRIO
I agree that the strong global presence and large size of Starbucks are rare and expensive to sustain and are exploited. The company’s global presence attracts many consumers, and may not be duplicated easily. Further, its large outlets located in strategic sites create them costly to keep. However, I disagree with the aesthetic appeal and ideas of Starbucks’ shops are rare because this can be developed for any service corporation. Further, I do not agree that the company being in a strategic and prime position is rare. Therefore, I can rate this document C because it has provided some misleading information on VRIO.
Starbucks Generic and Intensive Growth Strategies
I agree with the highlighted generic and intensive growth strategies for Starbucks. The strategies align with the company mission and vision statement of growth. For instance, the firm employs market growth as its generic strategy for intensive growth that facilitates business growth by generating sales revenues in new market segments. If I were to rate this document, then an A would be the grade awarded because of its well-informed research on strategies employed by Starbucks to spur growth.
Starbucks SWOT Analysis
I agree with Starbucks’ strengths highlighted in the document. The company is one of the most recognizable coffee brands globally. It has high-quality products due to investment in highly skilled labor in terms of its coffee. However, I do not agree with the weaknesses noted about the company. While Starbucks products could be cited as highly-priced compared to other brands, its consumers have not risen any complaints. I rate this document B as it has displayed a good analysis of Starbucks’s SWOT analysis despite a few misleading concepts about the company.
Kendle, K. (2019). Starbucks reserve Roastery: The complete guide. Web.
Shedd, K. (2019). How Starbucks went from one coffee bean store to an $80B business [Video]. CNBC. Web.