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Starbucks Corporation was established by Gordon Bowker, Jerry Baldwin, and Zev Siegl, inexperienced businesspeople. The corporation in Seattle that was created in 1971 focused on selling coffee beans, teas, and brewing tools like grinders and teapots. This report provides the historical background of Starbucks, a review of its mission, vision, values, and goals, which informs the guiding principles of the organization. The paper will also look at the organization’s strategy and objectives and their influence on performance. The company aims at nurturing and inspiring human spirit in the business department. The company faces leadership and management challenges that cause hardships in company development. However, the management team ensures that they use various strategies to analyze the issues affecting the company. The strategy that Starbucks corporation has settled for involves, Firstly, market penetration, which supports the organization’s intensive growth by integrating revenues from existing markets and applying the same food and beverage products. Secondly, Starbucks uses Market Development as it is a secondary strategy for intensive growth. The technique supports business development by creating revenues in new markets by providing Starbucks’ current food and beverages product mix. Thirdly, Product Development is another intensive growth strategy that informs Starbuck’s development via new products or variants that contribute to business revenues. The competitive advantage of the company will be explored, and critical analysis of the resources such as human and technological resources. The report also examines the leadership, governance, and management of the corporation. It also helps evaluate strengths and weaknesses, the capacity for learning and change, and the recommendations for the firm. Comment by Murray Blank: There’s nothing wrong with this sentence; although it is in the passive voice. It would be much stronger if in the active voice.

Based on this situation audit, Starbucks should do the following: Comment by Murray Blank: How would you have them do it?

· Analyze its various competitive advantages

· Understand the customers’ requirements

Introduction

The situation audit exhibits a review of organizational mission, vision, and guiding principles. It also indicates the strategies, objectives, and competitive advantage of Starbucks. It is crucial to acknowledge that Starbucks Company is an international coffee brand that is extending its operations. There are several challenges to this Growth level, and the organization needs to take great care in the distinction of how stores are built in the United States and across the globe. The organization should assess various strategic options to develop brand longevity. An effective strategy can be selected relying on a situational analysis, financial analysis, and organizational objectives. After a final strategic recommendation has been made, a contingency plan will be developed to ensure long-term success.

The company needs to have adequate plans concerning its perfect growth and achievements. In this case, it has various aspects to consider and ensure that the organization has them. In the first place, organizational resources are critical within a company; thus, Starbucks should have reliable resources for its operations. Therefore, the audit should involve an analysis of the availability of resources within the company that promotes operations. It should ensure that the company’s management has a perfect plan for the help.

On the other hand, the ethical structure of the company is also another critical aspect that they should consider in all dimensions. This means that it is essential for the company to have effective ethics that guide its operations. The employees should understand the most applicable ethics that govern the organization and follow them effectively. The article addresses the issue and ensures that the company understands the importance of ethics. Again, it addresses various challenges that the company may face within the operations and in the market.

Fact Sheet

Starbucks’ initial store was developed in Seattle, Washington, in 1971, as ascertained by Starbucks Corporation (2019). According to Farr (2019), Starbucks was established by Gordon Bowker, Jerry Baldwin, and. Zev Siegl, however, was an inexperienced businessman. They met again earlier in their lives, where they met in Seattle, and they agreed on starting a coffee organization. The corporation in Seattle that was created in 1971 focused on selling coffee beans, teas, and brewing tools like grinders and teapots, unlike the current stores. They experienced low net income in their initial years, which triggered Baldwin and Siegl to open another branch in their second year of business, as Farr (2017) stipulated. The partners decided to roast their coffee beans and lease a building for their roasting plant. From this point, it was evident that Starbucks had started to grow gradually, although it faced numerous challenges from increased coffee beans due to issues experienced in Brazil. Comment by Murray Blank: There’s something wrong with this sentence. Comment by Murray Blank: I don’t understand how the beans could present a challenge.

Starbucks is a member of the UN Global Compact, a global network of companies that support ten universal principles. The corporation signed as a member in June 2004 as an extension of its mission statement that defines Starbuck’s commitment to social and environmental responsibility. Being a member of the UN Global Compact has enabled the firm to promote existing or establish unique internal practices and regulations. The ten principles include Human Rights. Starbucks is supposed to support and respect the protection of internally implemented rights such as Business Ethics and Compliance Policy, Global Human Rights for coffee and cocoa (Starbucks Corporation 2019). The second principle involves the firm ensuring they are not complicit in human rights abuses, and for Starbucks, it consists of labor standards like eliminating forced or compulsory labor.

It also includes protection of the environment and not entertaining corruption in the company. Starbucks has been associated with tax avoidance for several years now. In 2012, Starbucks in the United Kingdom experienced a public relations furor concerning its inability to pay British corporate income taxes. Starbucks’ tax avoidance practices were regular among multinational corporations. Still, Starbucks had been clear concerning its public commitment to being socially responsible and a responsible citizen of the society that it functioned. This also entails paying other aspects like fair wages to the workers and coffee farmers in developing nations. Starbucks operates, and its competition is in the retail coffee and snacks store industry (Starbucks Corporation, 2021). So, the organization is under the beverage industry, whereby it sells beverages, food, and other items in 83 global markets. Starbucks gains significant sales from beverages from America’s segment entailing the US, Canada, and Latin America. The firm functions with its subsidiaries as a roaster, marketer, and retailer of specialty coffee across the globe. Comment by Murray Blank: They “couldn’t” pay the tax, or they “wouldn’t” pay the tax?

The organization functions via three fragments as America’s International and Channel development. Its stores provide coffee and tea beverages, roasted beans including ground coffees, single-serve, ready-to-drink drinks, iced tea, and many food products like pastries, breakfast sandwiches, and lunch items. Starbucks Corporation licensed its trademarks via licensed stores and groceries, and foodservice accounts. The firms provide their products under Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brand names. According to its report on October 29, 2020, it functions in approximately 32,000 stores. Its corporation’s ISS. The governance Quality Score as of September 26, 2021, is 6. The pillar score includes 9; Board;1; Shareholder Rights; 2; Compensation; 9. Comment by Murray Blank: ????

The current CEO of Starbucks is Kevin Johnson, who is also the corporation’s chief operating officer, guiding the firm’s global operational business across America. He is a passionate leader who carries on the legacy of Starbucks, driving the firm’s core strategies for development and being of service to more than 400,000 shareholders who wear the green apron across the world. The CEO joined the corporation in 2009, but in March 2015, he assumed the role of president and the chief operating officer leading the organization’s worldwide operating businesses in all geographical locations. Kevin Johnson also effectively supports Starbuck’s supply chain sector, marketing, human resources, technology, and mobile, including digital platforms.

Mission, Vision, Values, & Goals

Starbucks’ (2019) Vision Statement was “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” This statement’s main components are Premier purveyance, Finest coffee globally, Uncompromising principles, and growth. Starbucks coffee’s vision is concise, clear, and inspiring to gain and control the premier status in the coffeehouse and coffee industry. It stresses leadership as a key motivator that challenges management and other members of its human resources. Starbucks’ vision is stable due to its applicability to future business events at Starbucks. For example, the premier purveyor element is designed to remain applicable for long-term purposes.

Starbucks’ values entail creating a culture of inclusion. The corporation values diversity and equity by promoting a culture of warmth and belonging to ensure every individual feel welcomed. The corporation has developed many regulations and strategies to generate a culture of inclusion by spending $1.5 million in the disadvantaged society to enhance their values. The second vital value of the company involves acting with courage, and the value has made the firm find numerous ways to grow by changing its status quo through its expansion in China. The corporation has also extended its operations in Jiangsu Province. It will provide the consumers with unique technology for roasting coffee beans that can decrease carbon emissions by more than 30%.

The third value Starbucks observes being present, which entails the organization’s transparency, social dignity, including environmental issues. Starbucks is an ambitious firm that has focused on the most crucial sustainable goal for 2030 for developing unique ways of operating, investment of resources, and urgent actions. The fourth value involves delivering its best by advancing and devising new technologies and practices to enhance its coffee, consumer experiences, and services. Starbucks has recently established Microsoft’s blockchain-based technology that will make consumers experience an exciting journey to the source of their coffee and where their beans will get roasted, bringing the consumers closer to their beloved beverage.

Strategy and Objectives

The Starbucks business strategy relies on the following four pillars. Firstly, Starbucks provides a third-place experience away from home and work where individuals can spend time in a relaxed and conducive environment, either alone or with friends (Tim, 2021). The consumers are allowed to get their work done at Starbucks stores since most of the stores have free wi-fi. The stores are organized to make the customers stay longer, buy more, and return for more due to its effective services. Secondly, Starbucks sells high-quality coffee and products that are distinct for their uniqueness and quality; therefore, consumers pay premium prices. Thirdly, Starbucks focuses on emerging economies as one of the vital components of its long-term international market expansion. This can be seen in the increase of the company's revenue from the China/Asia Pacific (CAP) universal market segment: 14% in 2016 from 7% in 2015. It resulted in 2719 new Starbucks stores opened from 2016-2018 (Mayer, 2018). Fourthly, strategies are based on combining technology into various business processes. The coffee chain gains technology-connected value through launches like the mobile order and pay feature, which permits consumers to purchase without getting in line, and the voice ordering app.

This paper will apply the following critical analytical strategic frameworks to the Starbucks Corporation: PEST, Porter's Five Forces, and Value Chain Analysis.

Political, economic, social, and technological elements can break the general environment and market conditions.

As a global firm, Starbucks is subject to the laws and regulations of every nation in which it operates its business, for it must consider the stability of governments, taxes, and labor procedures. Many of Starbucks' 29,000 locations are in the United States, which contains stable government and labor practices. Yet, alterations in taxation, like the Tax Cuts and Jobs Act of 2017, decreased the firm's tax rates from 35%- 21%, as ascertained by Peterson (2017). Starbucks stores 78 markets, including Egypt, Lebanon, and Mexico (Starbucks Corporation, 2019). These nations have ongoing political-related challenges like recovery from civil war and high levels of criminal violence due to drug trafficking. The situations can inform whether Starbucks will continue to function in such nations or not.

Since the bulk of Starbucks stores are in the United States, the economic climate in the US is an essential driver of revenues. The economy is stable and expected to continue with GDP slowing slightly from 2018 to 2021 but staying close to the ideal range of 2-3 percent (Peterson, 2019). In addition, the unemployment rate is expected to remain at 3.9%, which is below the Federal Reserve's target unemployment rate (Peterson, 2019). These aspects exhibit that the United States will progress as to a stable revenue source for Starbucks.

There is an extensive demand for ethically generated products, including a focus on corporate responsibility. Starbucks’ customers do not want to support discriminatory firms, destroy local culture, or mistreat the staff. Environmental influence is a crucial matter relevant to modern customers, and the corporations that are environmentally irresponsible or have a large carbon footprint have faced backlash from the public. It is also vital to note that millennial consumers, a group who heavily frequent Starbucks, value customization. Customers want to modify products to fit their individual needs, and it is one of the significant goals that Starbucks has ensured it provides its people.

In this era where technology is perceived as fundamental, it is vital for Starbucks' performance, productivity, and general success. Incorporating mobile ordering, mobile apps, and in-store ordering kiosks are all at the forefront of tech in the food industry. There is a rising trend towards enhancing customer experiences, and companies such as McDonald's have developed ordering kiosks instead of having traditional cashiers. In the coffee industry, technology is increasingly vital for speed and customization, and that is why the firm has also introduced mobile ordering and other technological tools for selecting and roasting coffee beans.

Starbucks experiences stiff competition from national chains, including the local coffee stores. The industry can be easily accessed, as renting a storefront and equipment is not quite expensive. Still, there is a concern in managing the resources of established coffee houses such as Starbucks. The threat of new national entrants is minor, particularly on coffee. These conditions make the threat of new entrants only a moderate challenge.

Starbucks provides quality coffees and teas, yet many options exist. Competing national chains such as Dunkin Donuts and McDonald’s also provide their consumers with affordable coffee drinks (Taylor, 2017). Conversely, many at-home options such as Nespresso and Keurig cost-effectively generate a high-quality beverage. On the other hand, Starbucks has tried to provide unique services by selling bottled drinks, boxes of Teavana teas, and bags of its coffee beans, including equipment for brewing drinks, like the Verismo Brewer and Milk Frother (Starbucks, 2019). But these products can still be replaced by other brands.

In 2018, Starbucks worked with roughly 300,000 coffee bean growers worldwide (Clement, 2019). This extensive network is a result of the corporation’s commitment to using only Fair Trade and sustainably grown products. Although the different suppliers keep bargaining power low, Starbucks can influence their supply orders to other growers if they price their product higher than Starbucks ' initial budget. Comment by Murray Blank: How so? I would think is the growers would consolidate and unite, they would soon develop a great deal of power in the marketplace. Maybe Starbucks is suppressing such efforts.

Starbucks presents itself as an affordable luxury, but it is still a luxury. The customers are not compelled to spend their money on coffee, giving them the authority to stop purchasing Starbucks' products. Also, there is no cost to consumers for choosing an alternative, which provides them with high bargaining power. Without consumers, Starbucks would not be able to exist.

Integrating the effects of the other four forces, the threat of competitive rivalry is a moderate to high challenge. The threat of substitution is a specific concern, as it comes from other coffee chains and at-home products. The high bargaining power of buyers and the moderate threat of new entrants to maintain the environment as competitive as there are many chances for customers to stop using Starbucks and smaller coffee shops to eat away at Starbucks' significant market share.

Following the Porter model of value chain analysis, we will focus on the five primary events: inbound logistics, operations, outbound logistics, marketing, and sales, including service. Starbucks has involved itself with numerous activities in its business framework, starting from its procurement of coffee beans to the distribution of its products.

Source:  EdrawMax Online

Figure 1: Value chain analysis

Inbound logistics entails the organization-appointed coffee buyers choosing the best quality coffee beans from the suppliers in Latin America, Africa, and Asia, which usually involve mostly unroasted coffee. The value gets added to the beans via Starbucks proprietary roasting and packaging, which helps to promote their selling value. These beans are then sent to the distribution centers, a few of which Starbucks owns, while logistics firms manage others. Starbucks depends on its native growers and does not involve third-party procurement, which ensures there are high-quality standards right from the selection point of the coffee beans.

The firm operates in more than eighty markets directly and through licensed stores. In other words, Starbucks does not have a franchise structure compared to the regular beverage and fast-food stores. The organization owns more than 32,000 stores across the globe and other brands like Teavana, Seattle's Best Coffee, including Evolution Fresh. The fiscal financial reports claimed that Starbucks generates 81% of its revenue from the owned stores and 11% from the licensed stores.

Marketing and Sales

Business Unit and Corporate Strategies

Starbucks Corporation's strategy relies on product differentiation with the stress on the quality of the products and services. The coffee chain giant has organized its stores as a third place away from home and works so that the consumers can interact with friends, relatives or enjoy alone company (Taylor, 2017). There is the utilization of technological advances in all the services offered in their stores, making it a crucial strategy for Starbucks, such as the implementation of mobile Order and Pay feature for which permits the consumers to without queuing.

Structure

The organization has its structure in divisions, and it combines geographic and brand-based divisions. For instance, the coffee chain giant's geographic divisions entail the Americas, Canada, the US, and Latin America; also, Europe, the Middle East, and Africa (EMEA), China, and Asia/Pacific (CAP) channel development, including other fragments. Similarly, the brand-based divisions of the organization entail Starbucks, Teavana, La Boulange, Evolution Fresh, Seattle's Best Coffee, and Tazo Tea brands (Taylor, 2017). Starbucks’ arrangement is tall and entails 35 senior vice presidents, 12 executive vice presidents, three presidents, and 2 group presidents.

Systems

There is a massive range of systems that inform the daily business of the world's largest coffee retailer, including but not limited to staff recruitment and selection systems, transaction processing systems, customer relationship management systems. Also, the business intelligence process, knowledge management system, and other crucial systems facilitate the daily operations of Starbucks (Taylor, 2017). The company has successfully combined a mobile ordering system.

Starbucks’ Corporation has utilized multiple strategies for effective business development that have been classified as intensive growth strategies. Firstly, they engage in market penetration, which supports the organization's intensive Growth by integrating revenues from existing markets and applying the same food and beverage products. Starbucks also uses Market Development as a secondary strategy for intensive Growth. The technique supports the business development by creating revenues in new markets by providing Starbucks' current product mix of food and beverages (Edrawmax, 2021). For instance, Starbucks coffee provides its existing products to more consumers by going to many nations like Africa and the Middle East. Product Development is another intensive growth strategy that informs Starbuck's development via new products or variants that contribute to business revenues.

In utilizing a more comprehensive Differentiation Strategy, the organization ensures a competitive advantage via products and ingredients that generate an image of specialty and uniqueness. The design exhibits various regulations and procedures to keep the coffeehouse business differentiated from the competition. Starbucks could use the generic competitive process with its current one to maximize actual development and competitiveness (Mc Namara & Moore-Mangin, 2015). For instance, the market segmentation generic strategy promotes a competitive advantage in functioning subsidiaries that complement other coffee stores. Yet, the cost of leadership might not work since the best-cost providers go against the premium brand image of Starbucks Cafés and merchandise. Starbucks expands its business via the intensive growth strategy of market penetration, market development, and even product development.

Its competitive advantage comes from its capability to innovate offerings and experiences that align with consumers' needs. Starbucks' key objectives involve its products and the expertise developed in its stores. The current CEO Kevin Johnson took over in 2017 after Howard Schultz, the longtime risktaker CEO, stepped down (Starbucks Corporation, 2019). Since then, he has directed the company via several scandals, responding to a 2018 racial bias incident in a Philadelphia store by closing all stores for one day to put employees through racial bias training (Tim, 2020), which is another competitive advantage to having such a leader. Moreover, with his demonstration and the ability to devise effective means to get solutions, Johnson has proved he is fulfilling his duty as a caretaker CEO by guiding the firm through technological innovations in the Starbucks app, a partnership with Uber Eats, and expansion into China (Tim, 2020). Kevin Johnson has experience with Starbucks, and he is the right individual to help the organization achieve its desired goals. Comment by Murray Blank: Or “through”?

The structure is a flatter hierarchy that is supported by learning and progressive organizations. There are fewer managerial levels but open access to the senior leaders, making the supporting staff feel secure and enhancing their performance and productivity. The flatter hierarchy permits a faster decision-making process for the firm and encourages commitment on the employees' part.

There is active coordination between various departments at Starbucks, which form inter-department teams for projects and the work that needs experience and expertise. The relationship between departments enhances a systematic process for developing and regulating coordination, promoting smooth operations to the easier achievement of desirable goals.

The company has a hybrid structure between centralization and decentralization. Starbucks encourages decentralization of the decision-making process. Workers set their targets with mutual coordination and comprehension with the supervisors. But the company is also centralized in making sure the supervisors manage and approve various activities and tactics to ensure that workers follow the company's strategy and values.

Starbucks has an intricate system that ensures communication between staff and other managerial levels is compelling. The communication system promotes the overall organizational structure, permits an easy flow of data, and ensures that no administrative tasks and goals are compromised due to miscommunication.

Critical Resources

Resource Dependency Theory (RDT) is based on the tenet that a company, like a business firm, must be involved in transactions with other stakeholders and organizations in its surroundings to gain relevant resources (Zona et al., 2018). It defines the resource acquisition’s impacts within an organization and the behavior change to the firm. This means that RDT is an essential tenet that an organization should consider in its various operations to ensure that they access adequate resources beneficial for their services and operations. Typically, the dependencies create multiple strategies to ensure that an organization acquires numerous resources without unnecessary challenges. Resource-Based View (RBV) notes that an organization’s resources contribute largely to a firm’s performance and achievements. The resources should show valuable, rare, inimitable, and organization (VRIO) attributes to ensure that the organization sustains and gains a competitive advantage in its field of operation.

Human Resources

For instance, Starbucks Human Resources are among its competitive advantages over other firms since workers are employed for specific roles and requirements that provide competitive benefits to the company. It requires adequate human resources to ensure that it achieves its operations and reaches all goals without challenges. In this case, the company depends on the theories to ensure that all resources are available. On the other hand, RDT asserts that organizations must create and monitor relationships with their consumers, suppliers, and other crucial personnel to gain significant resources. This is an effective operation that Starbucks follows to have an evaluation on the availability of human resources. The Coffee Company wants to ensure a competitive advantage over the other related companies in the same field. The company has adequate employees whom they depend on for their continuous operations. This drives them towards attaining their goals within the organization.

Financial Resources

Starbucks has operated for more than four decades, making it a better position to have more financial resources across the globe, enabling it to stay at the top and gain a competitive advantage over other competitors. The firm operates in more than eighty markets directly and through licensed stores. Therefore, Starbucks does not have a franchise structure compared to the typical beverage stores and fast-food stores. The organization owns more than 32,000 stores across the globe and other brands like Teavana, Seattle’s Best Coffee, including Evolution Fresh. The fiscal financial reports claimed that Starbucks generates 81% of its revenue from the owned stores and 11% from the licensed stores, according to the Fiscal 2016 Annual Report. They depend on bank deposits that they have kept and ensure that they improve different operations within the organization. In the same case, the company has liquid financial investments readily available whenever they need them for their operations. Comment by Murray Blank: Very little information of the financial performance of this orgnization.

Technology Resources

Another critical resource that has helped Starbucks gain its competitive advantage involves technological resources such as artificial intelligence, Big Data, Cloud Computing, Blockchain, and Machine learning. Technological advancements such as mobile ordering and effective machines for selecting and roasting coffee beans have enabled the organization to stay at the top. Technology allows the firm to encourage big ideas and forward-thinking solutions like the development of Mobile Order & Pay and Our Starbucks Rewards, and the Loyalty program enhances productivity and performance (Starbucks Corporation, 2019). The company has depended on reinforcement learning technology, a critical machine learning type that helps the company make perfect decisions in unpredictable and complex environments. Starbucks utilizes VRIN analysis to create competitive strategies that rely on its core strengths and resources to help it gain a competitive advantage compared to other competitors in the market.

Physical Resources

Starbucks has various physical resources that it utilizes to ensure that the company’s performance remains effective. It has an effective farmers’ support center network that improves their corporation to maintain the supply of coffee into the company. In the same case, it has various stores where they keep their products and access during use.

Management and Leadership Styles

Starbucks has a participative leadership style. With the application of this style, Starbucks engages its employees in the decision-making process and managerial decisions, thereby permitting the leadership to regularly interact with the workers and other organizational groups to locate any conflicts for resolution and get feedback concerning strategic tactics and functions. The style has worked effectively to the benefit of the company, for it has promoted employee motivation and enhanced organizational commitment and ownership among workers and other relevant personnel (Peterson, 2015). The leadership style is so effective for realizing the business goals and vision of the firm. The staffs feel valued since they can share their opinions, input, and feedback on any matter and feel appreciated. So that when they face a problem, it becomes easier for them to resolve it rationally.

Management and leadership styles are critical aspects that Starbucks considers within the organization. They have employed various styles from the CEO, which has different styles to ensure that its work takes place effectively. The current CEO of Starbucks is Kelvin Johnson, who is also the corporation’s chief operating officer, guiding the firm’s global operational business across America. He is a passionate leader who carries the legacy of Starbucks of human relation, driving the firm’s core strategies for development and being of service to more than 400,000 shareholders who wears the green apron across the world. He listens to the employees’ suggestions and ideas and initiates possible changes to create a quality performance. The CEO joined the corporation in 2009, but in March 2015, he assumed the role of president and the chief operating officer leading the organization’s worldwide operating businesses in all geographical locations (Starbucks Corporation, 2019). Kevin Johnson also provides practical support to Starbuck’s supply chain sector, marketing, human resources, technology, and mobile, including digital platforms. Since then, he has directed the company via several scandals, responding to a 2018 racial bias incident in a Philadelphia store by closing all stores for one day to put employees through racial bias training (Tim, 2020). This is another competitive advantage for having such as leader.

Management Control Systems

Organizational Leadership

But workers at Starbucks are encouraged to be team players and work well with one another, including forming healthy relationships with the organizational leadership. The company has a hybrid structure between centralization and decentralization. Starbucks encourages decentralization of the decision-making process in that job roles at Starbucks are created to be done with responsibility. The workers set their targets with mutual coordination and comprehension with the supervisors. But it is also centralized in making sure the supervisors manage and approve various activities and tactics that workers select to ensure that they follow the company’s strategy and values. Starbucks has an intricate system that provides communication between staff and other managerial levels is compelling. The communication system promotes the overall organizational structure. It permits easy data flow and ensures that no administrative tasks and goals are compromised due to miscommunication.

The structure is a flatter hierarchy that is supported by learning and progressive organizations. There are fewer managerial levels but access to the senior leaders, making the supporting staff feel secure and enhanced. The flatter hierarchy permits a faster decision-making process for the firm and encourages commitment on the employees’ part. Active coordination between departments forms inter-department teams for projects and the work that needs experience and expertise (Business Strategy Hub, 2021). The relationship between departments enhances a systematic process for developing and regulating coordination, promoting smooth operations to easier achieve desirable goals. Starbucks entertains teamwork and team-developed tasks where the work needs a person’s attention and scope, and the firm ensures they assign individuals responsible and job tasks.

Strengths

Starbucks Corporation’s coffee business has various strengths, such as its brand and reputation across the globe due to its lead in the coffee and café industry (Starbucks Corporation, 2021). Starbucks has branded itself as a reliable organization. It has developed robust regulations of social responsibility and committed itself to sustainability and utilizing its products ethically. Strength involves a loyal customer base that loves its products and provides positive feedback and referrals to others. Thirdly, Starbucks had practical technological innovations since it developed a loyalty program that rewards frequent users with free drinks (Starbucks Corporation, 2021). Finally, Starbucks’ human resources and structure has covered the Middle East, C.A.P., Africa, Canada, and other nations worldwide, which has helped enhance the reputation of Starbucks.

While Starbuck has several strengths, there are also a few drawbacks. For example, promoting local cultures through menu and store design, specifically in intentional locations, could prove a risk since not every culture prefers their coffee served Starbuck’s way. The corporate also produces expensive products, which makes them a challenge for the average person to afford, and it’s something Starbuck should investigate. Volatile and dynamic supply costs are also the company’s weaknesses since the supply cost should depend on the cost of the coffee beans. Whenever the cost of the coffee beans hikes, the supply cost also goes high to the consumers, which may reduce the supply effectiveness.

On the other hand, the product prices may be high, weakening the customers' purchase. On most occasions, they may purchase other drinks that may replace coffee, affecting the company. Most Starbucks’ drinks are rich in calories and sugars, which may be unhealthy to the consumers.

Starbucks has a perfect relationship with learning and change. The organization is very adaptable. This characteristic is illustrated by how Starbucks has dealt with the COVID-19 pandemic in the short- and long term. The corporation recently started laying a foundation for a transformational phase that will inform a new store format called Starbucks Pickup. The store format is designed for consumers who prefer to make orders in advance and pay via the Starbucks mobile app for pickup and delivery through Uber Eats (Starbucks Corporation, 2021). This initiative began when Starbucks closed 100 stores in a year due to lease expiration and other related circumstances and announced that it would shut approximately 400 coffee houses over the next 18 months (Starbucks Corporation, 2021). Starbucks has initiated a significant change due to its learning capacity. Such changes will ensure customers get their orders early enough and save time and energy going to the physical coffee stores.

The following conclusions and recommendations should be considered into account. Conclusion 1

Starbucks should develop various strategies that aim to improve their operations and use their competitive advantages effectively. The corporate should also enhance external investments and acquire the necessary resources that will promote its operations.

Recommendation 1

It is recommended that Starbucks invest internationally and ensure that they have reliable resources to promote their operations. This is an effective way that they should use to ensure that the company grows and overcome all possible weaknesses Comment by Murray Blank: Into what?

Conclusion 2

We cannot deny that Starbucks has a competitive advantage, especially in its quality compared to the generic coffee commodity. Yet, in terms of the convenience of the market, Starbucks should pursue substitutes that compete in crucial areas like America, Canada, and other parts of the world, such as a pre-packaged drink.

Recommendation 2

It is therefore recommended that Starbucks pursue products that compete in the market. The company should have substitute products that have a perfect demand to consumers within America, Canada, and the other states globally. This is also an effective strategy that will promote the company’s competitive advantage in the market. Comment by Murray Blank: For example? Comment by Murray Blank: Same question?

Conclusion 3

Starbucks has multiple competitive advantages that it can utilize to promote the company’s future success. They should adopt various strategies that will help the organization to grow ideally and achieve its goals effectively. Comment by Murray Blank: For example?

Recommendation 3

References

 Taylor, K. (2017) "There's one huge factor shaping Starbucks and Dunkin' Donuts' 'coffee shop of the future Business Insider.