The history of Starbucks dates as far back as 1971 when Starbucks opened its first coffee store in Seattles Pike Place market (Patterson et al. A companys shareholders are the people and organisations who invest in it and share in the benefits or losses of ownership. Considering that Starbucks coffee is priced at a premium, the fact that baristas and the staff had limited time to engage with customers was proving to be counterproductive to the very premises on which Starbucks was built. Starbucks is also affected by the government of a country in which it operates. Starbucks purchased in fiscal 2001 and the contracts that Starbucks has negotiated for coffee purchases in fiscal 2002, Starbucks pays an average price of $1. In the case of Starbucks, the company became successful by selling experience, and not coffee, as epitomised by the insistence on baristas and staffs to great customers warmly within five seconds of entering a Starbucks store, and also recalling the names of the most frequent customers (Cateora & Graham, 2007). at Starbucks coffee as an example of a company that has both internal and external customers, and we should be able to apply some of the terminology that we introduced above. The company satisfies most of the concerns of stakeholder groups like customers, employees, suppliers, the environment, and investors. This competitive environment requires that the company continuously improve its business strengths to optimize its financial performance and growth trajectory. Also, the report shall endeavour to provide recommendations for the case study in view of the marketing issues raised. August 4, 2021. https://ivypanda.com/essays/starbucks-5/. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. Years of coffee drinking has seen many Australians develop a more sophisticated palate and as such, they are able to enjoy a stronger and straighter coffee with no need for flavours and syrup shots to disguise the taste (Patterson et al., 2010). Good organisations are mainly based on cultivating customer retention relationships, as opposed to the acquisition/transaction mentality. Starbucks's Weaknesses (Internal Strategic Factors) Business weaknesses are identified in this component of the SWOT analysis. Dicarlo, L. (2004). Starbucks Coffee Companys stakeholder management approaches are based on different programs for corporate social responsibility (CSR). Conduct Initial Stakeholder Outreach. The companys stores are normally located conveniently on busy streets and in major malls that command heavy traffic. IvyPanda, 4 Aug. 2021, ivypanda.com/essays/starbucks-5/. Companies keen on venturing into the international market must be prepared to encounter various obstacles (Cateora et al 2011). In some countries like New Zealand, Starbucks gives very low wages to juvenile workers (youth rates). Internal and external stakeholders are those within your organization and outside your organization, respectively. He is a lecturer in Management and Marketing. Wall Street Journal. What are Starbucks CSR initiatives? Our responsibility starts with being accountable to Starbucks stakeholdersour partners, customers, shareholders, suppliers, community members and othersand communicating openly . On the other hand, Dunkin Donuts offers customers a variety of coffee flavors to choose from, in addition to its emphasis on quality (Dicarlo, 2004). External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. In addition, many Starbucks products are imitable. The factors included competition, economic factors, and technological factors while the internal challenges included lack of work performance culture among the employees, lack of ingredients in some stores, and diminishing company values. Starbucks has a diverse set of stakeholders, and therefore, it is important for it to have an effective communication strategy with these groups. Advances in technology affect product innovation, product services, customers store experience, and the way organizations are able to interact with other business partners. A good example is the companys VIA ready brew (Starbucks, 2011) and internet surfing srevices using Wi-Fi internet connectivity (Oliviera, 2011). Trader Joe has a variety of both internal and external stakeholders, its internal stakeholders include the management, employees, and Investors. Launch Your Survey and Start Collecting Insights. For example, Starbucks Corporations marketing mix or 4P indicates product mix expansion to include tea, food, and merchandise, in addition to coffee. It needs to know that some customers may prefer a more direct approach while others may prefer a more personal approach. Starbucks boasts of a wide variety of over 30 coffee products that customers can choose from. This way, it can take advantage of any feedback from these groups and make changes as needed. These are stakeholders who are directly affected by a project, such as employees. It must abide by the rules and regulations, tax, and other relevant issues very carefully as any breach may be costly for it. How can corporate social responsibility activities create value for stakeholders? Starbucks prioritizes employees in its corporate social responsibility efforts. Suppliers. Innovation can make the companys products more difficult to imitate. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Stakeholders of Starbucks (Stakeholder analysis of Starbucks). Starbucks suppliers are composed of wholesale supply firms and coffee farmers. Starbucks has already implemented various corporate social responsibility programs for its stakeholders. Starbucks operates in various industries that have different challenges to business growth. This paper seeks to describe the relationship between strategic planning and financial planning in the case of Starbucks. World Bank. ensure the integrity of our platform while keeping your private information safe. The coffee industry is demand- driven and when economic conditions are harsh, consumers treat coffee as a luxury and this affects sales (World Bank, 2010). They are not employees and do not have any direct financial interest in the profit or loss of the company. Buckstein, J. The coffee culture in Australia is both mature and sophisticated. This part of the SWOT analysis of Starbucks Coffee Company identifies external strategic factors that impose challenges to international expansion and market penetration. They can be owners, shareholders, employees . There are many more stakeholders that need to be recognized when companies consider their strategic and operational decisions. Starbucks addresses the interests of these stakeholders through a number of corporate social responsibility programs. External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. We hope the article Stakeholders of Starbucks (Stakeholder analysis of Starbucks) has been helpful. This would also reduce cultural resistance. The first Starbucks store opened on December 4, 1997 at 6750, Ayala Avenue. Organisations make use of marketing communication as a strategy to differentiate, position, as well as tangibilise the service. The actions of the firm can affect stakeholders. Starbucks Ethics & Compliance supports our mission and values and helps protect our culture and our reputation by fostering a culture that is committed to ethical leadership and conducting business with integrity by providing resources that help partners make ethical decisions at work. . This is because by the time the company ventured into the Australian market, smaller boutique-style coffee shops in the country had already gained popularity with coffee drinkers since they offered personalized and services. How Much Caffeine Is In A Starbucks Mocha K-cup? Starbucks can also improve its CSR performance in addressing governments around the world by improving its tax compliance. Starbucks imports coffee beans from different countries and each of these countries has its own tariff and customs regulations. These stakeholders are said to have a vested interest in the success of the company because of their financial investment. Starbucks has many different stakeholders such as individuals, and institutions (hedge funds and mutual funds). This external strategic factor threatens Starbucks because such competitors can reduce the companys market share by competing based on low prices. The first Starbucks opened in 1971 at Seattle's historic Pike Place Market and went public two decades later in 1992. August 4, 2021. https://ivypanda.com/essays/starbucks-5/. The database is updated daily, so anyone can easily find a relevant essay example. "Starbucks Company's External and Internal Analysis." From there it . Internal stakeholders include the owners, managers, employees and investors of a company. If you're considering conducting a materiality assessment, below we offer seven basic steps that should be a part of your initiative: Identify Internal and External Stakeholders. Starbucks uses a network of locations in different European countries to exploit tax advantages. At the moment, Starbucks is ranked as the leading global coffee chain operator. More than $10 million in Foundation grants supported local and global COVID-19 initiatives. The internal strategic factors identified in this part of the SWOT analysis of Starbucks Corporation show that the business has strengths that promote resilience through diversification and a global supply chain. Successful marketing campaigns and branding strategies are needed to counteract the effects of these trends. This opportunity draws attention away from the U.S. market, where most of the coffeehouse companys revenues are generated. Starbucks should continue to be more innovative in the design and development of new products. . The recession resulted in an increase in the operational costs of the company (Bureau of Labor Statistics, 2011). However, Starbucks needs to improve its CSR performance to reach a 100% CAFE-certified supply chain to maximize environmental benefits. Stake: Health, safety, economic development. Starbucks mission statement is: "To inspire and nurture the human spiritone person, one cup, and one neighborhood at a time". Internal stakeholder group External stakeholder group As seen from the Fig. Starbucks offers such differentiation through an excellent customer experience and quality coffee The Starbucks Experience is achieved through its well-designed stores with good ambiance and well-trained staff. Starbucks continues to improve its corporate social responsibility practices to address the concerns of different stakeholder groups. Ontario, Canada: McGraw-Hill Ryerson Higher Education. These four words represent the major constructs firms need to consider to make the most of their internal set up and the external marketplace characteristics. Shaoul, J. Stake: Product/service quality and value, #2 Employees. Also, this SWOT analysis considers generalized standards a weakness that limits the flexibility of the coffeehouse chain business organization. It is characterized by multiple, overlapping chains of command and divisions. SWOT analysis applications: An integrative literature review. Effective capabilities for managing a global supply chain of coffee and related materials. It has operations in 44 countries, with over 15, 000 stores in operation (Patterson et al., 2010). The stakeholder will be directly affected by the success or failure of the organization. In this case, Starbucks uses high pricing to differentiate itself from the rest of the competition (Starbucks, 2011). The structure is fairly similar to Westpac's Code of Conduct, as it outlines four major values and how they achieve it. Starbucks, American company that is the largest coffeehouse chain in the world. By this time, the company already had 140 stores in operation. IvyPanda. This group involves owners, investors, customers, competitors, employees and suppliers. Until very recently, Starbucks has relied on word of mouth and its large store presence as its advertising and promotional and advertising tools (Patterson et al., 2010, p. 45). Web. This SWOT analysis of Starbucks Coffee considers the strengths and weaknesses (internal strategic factors) inherent in coffee, coffeehouse, and related businesses. Supports region/market specific efforts - unique product . In this partnership, Starbucks pays for 56% of tuition fees for employees junior and senior years at the University. Research reveals the most important stakeholder group of organizations are employees who come ahead of customers, suppliers, community groups, and especially far ahead of shareholders. However, it experienced supply shortages in the USA in the past, making many thirsty, and coffee-crazed customers unhappy. Internal stakeholders are people who are on the inside of the business that already serve the organisation these include staff managers board members etc. Internal stakeholders include employees, owners, shareholders, and managers They are simply anyone within the organization. They can affect how successful Starbucks is by doing their job and providing inputs into decisions that go into creating products and services that customers want. One of the lessons learnt is that it is always important to recognize and appreciate the importance of local culture. The internal customers will be the people that work within the business of Starb. In addition, the industry environment is subject to independent coffeehouse movements. Examples of internal stakeholders include employees, shareholders, and managers. The SWOT Analysis model is a strategic management tool for assessing the strengths, weaknesses, opportunities, and threats (SWOT) relevant to the business and its internal and external environments. Walters, D., & Rainbird, M. (2007). Some companies listed short strategic priorities like "invest in infrastructure" or "international expansion" without elaborating on the meaning of these objectives. Internal Stakeholders are directly influenced by the company's activities because they are the part of the organisation which is just opposite in the case of External Stakeholders. Stakeholders Businesses have different types of internal and external stakeholders, with different interests and priorities. Last name. Are You A 30% Or Greater Disabled Veteran Who Wish To Be Considered Non Competitively, How Do You Take Your Coffee In The Morning, #1 Customers. The two main competitors of Starbucks are MacDonalds McCafe and Dunkin Donuts. Starbucks seeks to sell experience, and not just coffee. Web. They buy products and provide the revenue that drives the coffee giant. These recommendations focus on minimizing the negative impacts of the internal and external factors enumerated in this SWOT analysis. These threats are external factors that reduce or limit business performance. As in any business, Starbucks must address investors as stakeholders. One of the fundamental requirements for successful promotion is to facilitate friendly and smooth interactions among the companys representatives and the market without compromising the efficiency manner in which a company is able to offer its services to the target market. Imitability of products, especially beverages. For CCPA and GDPR compliance, we do not use personally identifiable information to serve ads in California, the EU, and the EEA. Some of the lessons that other aspiring companies who want to venture into the international market can borrow from the failure of Starbucks in Australia is that it is important to study, adopt and embrace the cultural differences in a given country. Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. Please share the article link on social media to help us continue with this free academic research. School principals interact closely with internal stakeholders, teachers, students and employees On the other hand, there are external stakeholders, such as parents, school authorities, local policy makers, and donors. They also have a legitimate interest in the business, and are generally grouped into two; the internal and external stakeholders. External stakeholders are individuals or groups outside an organization who are vested interest in a company's success. Use a Multi-Channel Promotional Strategy Starbucks predominantly uses its website, social media channels and in-store displays to promote the brand and the products. Starbucks has also been successful because it has managed to create an atmosphere that enables customers to relax away from home. From its beginning as a single storefront serving fresh-roasted whole bean . It is becoming increasingly important for firms to work closely with competitors (Walters & Rainbird, 2007) and as such, Starbucks should also consider entering into a partnership with fast-food chains in a bid to improve its coffee offer, in addition to fighting stiff competition from such direct competitors as McDonalds. External stakeholders are those who do not have a direct tie to the company. A lot of service firms crossing international borders can learn a lot from the failure of Starbucks in Australia. Thus, Starbucks corporate social responsibility efforts comprehensively address the interests of this stakeholder group. The company is an advocate of CSR movements, especially those pertaining to sustainability in business. Web. Starbucks is a global coffee company that has been in business for over 50 years. Mason, A., Cole, T., & Goza, N. (2017). (2011). The statement is concise and inspiring, bringing the core idea of the business - be part of the community and grow together with internal and external stakeholder. This study discusses the internal and external business ethics practiced at Starbucks Corporation. Thus, the firm satisfies this stakeholder groups interests. Stakeholders, Mission, and Vision. Starbucks has a long-standing commitment to sustainability , and as part of our ongoing aspiration to reduce waste and become a resource positive company, we are continuously looking for ways to better manage our waste in stores and in communities; and developing more eco-friendly operations, from stores to supply chain. Starbuck's financial performance will be an analysis and comparison of its performance through the years 2007- 2014. Private: What Are Internal And External Stakeholders In Starbucks? It also uses sales promotions, events, direct marketing, print media, and PR in an integrated manner to multiply the impact of its promotions. The company should consider partnering with other firms in foreign markets so that it can ride on the success of the local company. Starbucks could also consider partnering with other unrelated firms such as airlines and multinational retail chains like IKEA and Wal-Mart, car washers, and cinemas. Australasian Marketing Journal, 18, 4147. The company has a growing population of loyal customers, which adds to the stability of the coffeehouse business. (2011). The main difference between internal and external stakeholders is that internal stakeholders have more . We can define internal stakeholders as those directly involved in running an organization or a given project and who have a legitimate interest. Moderate diversification through various subsidiaries and products, including merchandise. Starbucks failed to adequately analyze the existing coffee culture in Australia, and this could have precipitated its failure. Starbucks has long been recognized as a leader in employee relations. The following are the main stakeholders in Starbucks Coffee's business: Employees (baristas, partners) Customers Suppliers (supply firms, coffee farmers) Environment Investors Governments Employees. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. It is also competing with companies like Peets Coffee & Tea Company, which have more exclusive products. Internal stakeholders are people whose interest in a company comes through a direct relationship, such as employment, ownership, or investment. The 4 include 1. These consist of everyone involved in management, marketing, designing, manufacturing, assembly, and general sales. This is an expensive way to capture attention, but . Delivering our very best in all we do, holding ourselves accountable for results. On the other hand, external stakeholders are parties that do not have a direct relationship with the company but may be affected by the actions of that company. Kato, T. (2022). Customers. Such a move would impact positively on Starbucks business model. The company has had to contend with various legal, political, economic and social factors as it undertakes its business activities. Over the past four decades, Starbucks has become the undisputed leader when it comes to the retail, coffee business. Internal Stakeholder Roles Internal stakeholders usually have a financial interest in the organization These include shareholders, the board of directors and investors. You are free to use it for research and reference purposes in order to write your own paper; however, you The Starbucks journey began with a single store in Seattle in the year 1971. In 1992, Starbucks became a publicly-listed company. Communication from Starbucks happens through many channels including social media, press releases, websites, and customer surveys. Starbucks to Expand Premium Single-Serve Coffee Offerings. Imitability is a weakness that empowers competitors. 7 Examples of External Stakeholders. Pizza Hut, Starbucks, Domino's, Dunkin' Donuts, and Wendy's are some of those competitors. With being the leader in a multinational industry, Starbucks understands that it has to manage and maintain its relationships with all its stakeholders in order to continue its reign on coffee. All rights reserved LCHW. These shops provided personalized, individualized and intimate service, something that Starbucks could no longer provide. Those people or group affected directly is called internal stakeholders and those who are indirectly affected are .