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The main aim and objective of Starbucks are to serve the finest coffee in the world and to maintain a good relationship with the customers. The main objective of the company is to treat every employee and the customers of the company with respect and dignity. Their main objective is to inspire the people that one person should have one coffee and nurture the human spirit. Their main objective is to target a large number of customers and to target the well-defined audience (Flamholtz and Randl, 2008). They basically target the people who are in the age group of the 25 to 40. Their objective is to expand its market share by offering the best quality of coffee and by creating loyal customers. Another objective which the company has is to increase their profit and to provide better customers services which will seek more values and create a positive culture for the corporate environment.
The strategic purpose of the organization is to create a warmth culture where they respect every customer with respect and dignity. The strategic value of Starbucks is to connect with transparency and delivers the best values. Stakeholders play an essential role in the company as their decision has to be considered in the strategic plan as they have great power in the company (Warren, 2015). Shareholders are the one who holds the share of the company so their approval is needed while making any strategic plan. While making any strategic plan the stakeholders of the company are involved as they have the vested interest in the success of the company. The organization is dependent on the certain stakeholders of the company such as vendors, customers, employees, supply chain partners, etc. The company Starbucks has the long term plan so the senior management of the company is involved in strategic planning and also engage in achieving certain outcomes (Sam and Cai, 2015).
The main mission of the company is to serve the finest coffee and have the largest market share in the coffee so for expanding the market, the funds are required which helps in growing the business. So the stakeholders of the company help in managing them and develop the strategy to target a large number of the audience. The customers have a great impact on the strategy of the company as they have the power to increase and decline the profit of the company (Karman, 2015).
There are three successful generic strategies which are differentiation, focus, and the overall cost leadership. The generic strategy of differentiation means something unique which is not offered before. Differentiation can be in the form of technology, customers services, dealer network, brand image, etc. The generic strategy of the Starbucks focuses on the targeting the large consumer segment so that more profit can be achieved and the market share of the company can be expanded (Nielsen, et al., 2012). The company wants to focus on the product line and the geographical market. The generic strategy of the cost leadership is that the company wants the reducing in the cost so that more profit can be achieved by avoiding the marginal, redoing the overhead cost, advertising the product, etc.
It is important to analyses the internal and external business environment of the company so that the strategic plan can be outlined in an effective manner.
Political factors: The political factors have affected the sourcing of the raw material. The US is the home market of the company so there are many regulatory factors which is the major factor. The company has to monitor the laws and regulations of the US n the employment and tax policies. The agricultural tax of the coffee is very high which impacts the profitability of the company (SHTAL, 2018).
Economic factors: The economic driver of the company is the global ec0onomic recession which dented the profitability of the company. There are many companies who are offering the coffee at the cheaper rates so the company gets affected by that. The declining of the profit and the inflationary environment is creating a problem for the company. The operational cost and the labor of the company are also rising which is also creating the issues for the company (Yan and Yazdanifard, 2014).
Socio-cultural factors: The quality offered by Starbucks is the premium so they can offer cheaper products but they never compromise with the quality. So this the main challenge which the company faces as they have to expand the customers base at the premium prices. The company Starbucks has to focus on the certain factors such as changes in the lifestyle of US population, their preferences, family patterns, their changing values and the education of the population in the local market (O'Brien, 2010).
Technological factors: The technological factors of Starbucks are very effective as mobile apps bring many discounts for the customers who help in emerging the business. The company also provides free Wi-Fi in the surroundings so the customers also get attracted to the internet. The customers can have the coffee and can do their work which helps in adding the value to the brand. The company is indulging in innovative technology, biotechnological developments, etc.
Environmental factors: There are many environmental rules and regulations of the company which are affecting the company in an adverse manner so the company makes the concerns on the international advocacy group. The company was concerned with the global warming issues and also gets affected by the disasters in the countries where the coffee beans are produced.
Legal factors: The Company buys raw material from many countries where the coffee beans the produced so they have to ensure that they are following the laws and regulations of that country in an effective manner. The home country of Starbucks is the US so they have to regulate their market also and stay alert with the caffeine productions and consumptions. The company gets affected with certain factors such as trade regulations and the customs duty and the licensing of the industry (Roser-Renouf, et al., 2014).
Reputation: The Company has a good reputation in the brand market as they serve the high quality of the product, alliances and the structure of the company is also very effective. The company has built a great reputation in the competitive market and has a sustainable advantage.
Employee retention: employee retention of the company is very high. The company also gets benefited as they save the training cost and invest inexperienced workers. The company has the advantage that they have the experience employees who tackle the customer’s ion the effective way. The employment turnover of the company is also very high which helps in increasing the value of the company.
Product line: The profit of the company is generated through the great product line. There is a variety of coffee which the company [provides to the customers so there are many quality options which the customers have. The company has a great product line which helps in competing with the competitors (Karman, 2015).
Customer’s services: The Company has to put the major focus on customer services as it gives high importance. The company has a high level of the customer’s services which creates value for them. Due to effective services the company has easily expanded their market and earns many profits (Brooks, 2012).
The option stated above is very feasible in analyzing the external market of the company. It helps in ensuring the potential risk and the issues in the company which has risen. With the help of those options, the company can be treated as the source of the constraints. With the help of that option the market advantage and the competitive strategy of the company is analyzed. The key drivers of the strategic business environment are analyzed through these options. The KPI indicator helps in analyzing the performance of the company (Lemus, et al., 2015). The company Starbucks handles data management in a very effective way and helps in measuring and analyzing the performance. The training courses and the research report is offered by the KPI which gives the necessary knowledge to evaluate the performance data. The depth information of the environment is provided which helps in increasing the sustainability and the profitability of the company.
There are several risk factors which occur in the company which has stated below:
Operational risk Supplier and customer risk: The Company has the major risk that if the customers of the company do not like the flavor of the coffee or if they are not satisfied with the customer's services then it creates the problem for the company as the profitability of the company declines. If any policies and the procedures of the company Starbucks fails then creates the loss due to the inadequate things (Roser-Renouf, et al., 2014). Sometimes any fraud and criminal errors also happen in the company by the employees which also disrupts the reputation of the company and creates may mess in the working environment. So it is the major risk which the company has to face which results in declining the profit and also causes much loss in the company.
Financial and Liquidity Risk: The Company’s financial position is good but still for expanding the market at the large level and for introducing the new products in the market they require proper funds for the advertising and for the effective business process. Due to the lack of the funds, the company also sometimes faces the problem of cash and they did not perform the function of the company in an effective manner (Rumelt, 2012). Due to the insufficient financial liquidity, the company also faces the risk of not paying the debts on time and it results in withdrawing their deposits.
Technical Risk: Due to the technical risk also the company has to face many problems in the company. Due to the change in the technological factors and the structure of the company, the employees and the customers have to face some issues which impact on the performance of the company. The company has to mitigate those risk so that they can earn higher profits and can meet the requirements of the business.
The strategic direction is the way through which the objectives and the vision of the company are fulfilled by taking some actions and fulfilling the needs of the company. Strategic planning is very essential in the company as it helps in achieving the measurable outcomes of the company. The company can take useful decisions and can evaluate the progress with the help of the proper plan and actions in the company (Perera, et al., 2012). The strategic direction of the company Starbucks is that they have to target the large audience and the market share so they have to do the advertising and enhances the products of the company online and through the social media so that the large customers can evaluate about the product.
Clarify the vision: The Starbucks has a clear vision that they have to target the large audience and the market share so they have to do the advertising and enhances the products of the company. They want to earn higher profits by providing eh premium services and high quality of the product (Rothaermel, 2013).
Analyze the information: The information which is necessary to evaluate the missions and the goals of the company is ascertained. The information is evaluated through the market so that strategy can be made in an effective way.
Formulate the strategy: The Company has to formulate the strategy which helps in gaining the advantage and compete with the competitors. The company has identified the resources which help in achieving the goals and the objectives of the company. The external resources and the environment have studied so that the strategy can be formulated in an effective way (Berman, 2016).
Implement the strategy: After formulating the strategy in the successful way the company Starbucks has implemented the strategy so that the business can lead to success. The strategy is implemented in an effective way so that the performance of the company can be improved.
Control and monitor the strategy: After implementing the strategy it is important in the company to monitor and evaluate the performance of the company at the regular intervals so that internal and the external issues in the market can be analyzed. The progress of the company is measured in this step (Noe, et al., 2017).
There are the certain factors which have to be considered while implementing the strategic plan of the company such as resources needed, risk mitigation strategy, the effective policies of the environment, communication strategies and the plan, and many other factors. The company needs effective strategies in implementing the strategic plan. They need the coffee beans which are very effective and healthy in taste so that customers prefer that (Abdel-Basset, et al., 2018). The strategy and the plan of the company are that they want to achieve a higher market share and target the large audience so that they can earn a huge profit of the company. The company also considers certain risk factors so that they can make the plan to mitigate those risk. The risk related to the climatic change or the preferences of the customers, etc.
The risk-mitigating plan is very essential in the company as it helps in controlling the risk in an effective way so that if any natural disasters occur then the company does not has to face a major loss and they have the cope up to overcome with that risk. Another factor is the current validity of the environmental policies which affects the operations of the company. The environment is very dynamic so the market is also very fluctuating so it necessary to make the plan regarding the change in the environment and the policies which are affecting the environment. To consider the policies of the country is very effective before implementing the strategic plan as it helps in giving the idea about the market fluctuations (Taecharungroj, 2017).
The communication plan is also required in the company as it should be effective so that the necessary information in the company can be passed out and the effective decisions can be taken in the company. The communicational channel in the company should be adequate and the proper hierarchy should be followed so that information can flow in the company in the appropriate manner. After considering all these factors they have to monitor on a daily basis so that any changes required in these factors can be taken into consideration (David, 2013).
After considering all the important factors in making the plan it is important to implement the strategic plan in the company. The company Starbucks has the directors and the managers who have the authority to makes the change in the plan if it is needed or required. Every department has some leader so the leader of every department knows well what changes have to made in the company so they have the right to make the certain changes which are required in the company (Dia, 2015). Every employee of the company has the responsibility to implement the plan in the company as the plan is made by considering the opinion of all the employees in the company. The whole team including the leader implements the work of the plan in every department and if any changes are made then the suggestion of the manager has to be taken. The senior manager is the expertise in the Starbucks company top ensures whether the plan is implanted or not. If any changes have to be made then it has to be informed by the board of directors of the company and the other stakeholders of the company so that they should know about the changes. Before making any changes in the company, the plan has to be consulted with the directors and the managers of the company so that before implanting the plan their approval and the consent are required (Morais, et al., 2012).
The process required to review the strategic plan are stated below:
Develop objectives: The objective of the monitoring is to analyses the performance of the company and to evaluate whether the performance of the company is improving or not.
Design the monitoring methodology: With the help of KPIs, the performance of the company is measured so this methodology is used by the company in accessing the performance (Hill, et al., 2014).
Implement the monitoring: After analyses the methodology of the monitoring, it is implemented in the company so that the performance of the company can be evaluated.
Report and use the results: After implementing the process the performance is measured and evaluate the performance of the company at the regular intervals so that internal and the external issues in the market can be analyzed. The progress of the company is measured in this step (Yee, et al., 2014).
The impact of the strategic plan is reviewed by monitoring the strategic plan on the regular intervals so that the performance of the company is ascertained. By doing the monitoring of the plan, the data and the information is evaluated which helps in reviewing the strategic plan of the company. The strategic plan is also reviewed and monitored through the process of the top-down and the bottom down procedure (Lemus, et al., 2015). The information which is evaluated through the monitoring the process has to be informed to the senior manager of the company or the director of the company so that if changes required in the plan can be evaluated by them. The plan is made in the proper format so it also helps in whether the information presented is measurable or not. So the strategic plan of the company affects the performance of the company so it has to monitor on a regular basis so that if any changes required it could be on time by the company.
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