Internal and External Factors Affecting Starbucks

5278 words 22 pages
Internal and external factors affecting Starbucks
Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.
Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world, with over 16,000 stores in 50 countries (Starbucks Annual Report, 2009, p. 1). Starbucks sells high-quality
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Many loyal customers visit the shops twice a day, mostly on their way to work and during break hours.
(c). Supporting Social Issues
The company lives by its mission statement “Starbucks is committed to a role of environmental leadership in all facets of our business” (Starbucks, 2009). It supports several social issues including fair trade policies, access to clean water and many environmental issues such as recycling and renewable energy. One of the latest involvements is in ‘product red’ where each time a customer purchases a Starbucks red product or uses red card, a contribution is made to the Global Fund to help people living with HIV in Africa (Starbucks, 2009).
(d). Strong Financials
Starbucks saw consistent revenue growth over the years except for last year mainly relating to the economic crisis. However, the consistent revenue growth has provided the company with a strong financial base enabling it to undertake new business ventures (Starbucks Annual Report, 2009, pp. 40-43).
3.1.2 Weaknesses
(a). Over Expansion
The Starbucks phenomenon has expanded so rapidly during the last 10 years that the company has faced hardships in managing this. Several stores throughout the world including in UK had to be shut down (Starbucks Annual Report, 2009, p. 3). However, the company continues to venture out of the coffee industry with many brand extensions, which may have negative affects.
(b). Reliance on one Brand
Starbucks relies


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