The first Starbucks store opened on December 4, 1997 at 6750, Ayala Avenue. Measuring performance using SWOT analysis and balanced scorecard. 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. Our responsibility starts with being accountable to Starbucks stakeholdersour partners, customers, shareholders, suppliers, community members and othersand communicating openly about our business practices and performance. Internally, Starbucks stakeholders include the employees, the shareholders, subsidiaries and the management. For instance, small local competitors can develop beverages similar to the companys products. Internal stakeholders are individuals or groups within an organization with a vested interest in the success of a business. At the moment, Starbucks is ranked as the leading global coffee chain operator. Starbucks has a duty to maximize shareholder value by increasing profits and dividends, while also managing risks and complying with relevant laws and regulations. Managers perform stakeholder analysis to gain a better understanding of the range and variety of groups and individuals who not only have a vested interest in the . It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. 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. An analysis of Starbucks ( SBUX) can help to further illustrate and understand the value chain concept. This significant figure shows that Starbucks is effective in addressing its corporate social responsibility to this stakeholder group, although there is room for improvement. External stakeholders comprise of the customers, competitors, suppliers, creditors, public and the government. Analyzing Starbucks' Value Chain - Investopedia All rights reserved LCHW. Thus, Starbucks Coffees corporate social responsibility efforts fulfill the interests of this stakeholder group. Such an image can help reduce sociocultural opposition against the companys expansion. must. Starbucks operates in various industries that have different challenges to business growth. Burritt, C. (2007). Starbucks organizational culture emphasizes the employees-first attitude. There are two types of stakeholders: internal stakeholders and external . (2007). Dunkin' Brands engages with internal and external stakeholders about company strategy, current practices and future goals. However, as competition becomes stiffer, Starbucks has had to embrace various promotional strategies. Starbucks works with many suppliers around the world. The smaller boutique-style coffee shops are very popular with Australians because they offer personalized service, familiarity, and intimacy (Patterson et al., 2010). Delivering our very best in all we do, holding ourselves accountable for results. As the worlds most popular specialty coffeehouse chain, Starbucks effectively addresses this interest. A handful of strategic priorities makes it easier for external stakeholders to assess what matters most to the company. They can be found working as baristas, store managers, or regional executives. Wall Street Journal, p. A14. Starbucks SWOT Analysis & Recommendations - Panmore Institute Starbucks Company's External and Internal Analysis Case Study Nestle and Starbucks signed a global licensing deal in 2018 that granted Nestle the perpetual rights to market Starbucks packaged coffee and food service products globally The initial agreement excluded goods sold in Starbucks coffee shops and ready-to-drink products. These are standard stakeholders of almost every business that operates in the United States or overseas. Internal stakeholders include employees, board members, company owners, donors and volunteers Anyone who contributes to the companys internal functions can be considered an internal stakeholder. (2011). It is worth noting . Also, this SWOT analysis considers imitation as a major threat against the coffeehouse business. Shareholders are a major stakeholder group for Starbucks because the company's success or failure has a direct impact on the value of their investments. Most Starbucks coffee stores are located in neighborhoods with high traffic. Who are the External Stakeholders of a Company? - Chron Identify and Prioritize What You Want to Measure. Thus, the companys comprehensive corporate social responsibility efforts can be improved to address this stakeholder group. In addition, the company should consider diversifying to other food products besides coffee in a bid to cushion its revenue collection during harsh economic conditions. Excellence for Customers, 2. Also, Australian coffee drinkers had already developed a more sophisticated palate following years of drinking coffee, meaning that they demanded stronger and straighter flavor that did not require the use of flavors and syrup shots to disguise the taste. PDF RESPONSIBLE BUSINESS PRACTICES - Starbucks Coffee Company This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. currently have, or could potentially have, a material effect on the firm. The industry environment of Starbucks involves diverse challenges, especially because of the companys moderate diversification. It is also important for Starbucks to keep in touch with activist groups that include unions and environmentalists when considering sustainability matters. The related pricing strategy, an internal strategic factor, is a weakness because it limits the coffee companys market share, especially in areas with relatively lower disposable incomes. Internal stakeholders include the owners, managers, employees and investors of a company. Starbucks is also affected by the government of a country in which it operates. Internal stakeholders are, as the name suggests, stakeholders that exist inside a business. This is an expensive way to capture attention, but . One of the Starbucks guiding principles is "to contribute positively to communities and environment.". It is worth noting that it serves millions of customers every week which attests to an excellent customer retention (Starbucks, 2023). The main external stakeholders of McDonald's include the customers, suppliers, governments, and local communities. Your privacy is extremely important to us. Savvy Shoppers in a Brave New World. Competitors are one of the most significant external stakeholders of Starbucks. Starbucks Coffees main strengths are as follows: Starbucks Corporation has one of the worlds strongest and most popular brands. Weaknesses are internal factors that reduce or limit the capabilities of the coffeehouse company. In general, Starbucks complies with rules and regulations. Starbucks to Expand Premium Single-Serve Coffee Offerings. Copyright by Panmore Institute - All rights reserved. fourth. IvyPanda. An internal stakeholder is anyone who has a direct interest in you or your organization. The main difference between internal and external stakeholders is that internal stakeholders have more . external stakeholders are from outside of the company but Free Employment Stakeholder 803 Words 4 Pages Threats against the coffeehouse business are identified in this part of the SWOT analysis. We utilize security vendors that protect and The global financial crisis of 2008 greatly affected the operations of Starbucks in various countries. Starbucks should also continue to be produce innovative products in order to capture the changing tastes and preferences of its growing consumer base. The division contributed 13 percent of PepsiCos net revenues in 2015. Opening a new store can have a negative impact on the community because the local coffee shops may have to close down or be forced to change what they offer to compete with Starbucks. Since then, over 300 stores have opened. Starbucks has corporate social responsibility programs for environmentally sound business. To have a positive impact on the communities it works with and in, Starbucks develops community stores that partner with local nonprofits The nonprofits these stores work with offer services aimed to meet the needs of the communities theyre located in. Moreno, J. Dicarlo, L. (2004). Starbucks Redefined How We Drink Coffee Its one of the most successful companies in the world, not only in the coffee shop business. For CCPA and GDPR compliance, we do not use personally identifiable information to serve ads in California, the EU, and the EEA. Internal stakeholders often hold a percentage of shares, capital or other "stake" in the company, but external stakeholders play a different role in the company. In 2014, Starbucks boosted its CSR performance for this stakeholder group by giving scholarships to employees based on a partnership with Arizona State University. 6 Types of External Stakeholders and Their Roles Internal stakeholders are people who are on the inside of the business that already serve the organisation these include staff managers board members etc. Starbucks imports coffee beans from different countries and each of these countries has its own tariff and customs regulations. in a Red Bull. The main internal stakeholders of McDonald's include the leadership team, employees, and shareholders. Strategic Management- Chp 1 Flashcards | Quizlet Every office has the smart, witty person who knows whats going on and can always make co-workers laugh. The industry environment also presents the opportunity to strengthen the companys market position through additional partnerships or alliances with other firms. (2011). Companies keen on venturing into the international market must be prepared to encounter various obstacles (Cateora et al 2011). Frontiers | How Do Internal and External CSR Affect Employees Who are Starbucks internal stakeholders? External stakeholders are those who do not directly work with a company but are affected somehow by the actions and outcomes of the business. A good example is the companys VIA ready brew (Starbucks, 2011) and internet surfing srevices using Wi-Fi internet connectivity (Oliviera, 2011). How does Starbucks communicate with its stakeholders? Nestle Stakeholder Analysis - 918 Words | Cram It needs to know that some customers may prefer a more direct approach while others may prefer a more personal approach. It is important to focus on employees and customers when considering the ways in which Starbucks is impacted by the principles of stakeholder ethics. Internal stakeholders include your board of directors, upper management, and other departments in your company that may influence your flow of resources (e.g., human resources, finance team, etc. Some of the notable new products include Instant via Ready and Tazo Tea Infusions (Patterson et al., 2010, p. 44). Advantages and disadvantages of green marketing, Marketing mix of Costa Coffee (7Ps of Costa Coffee), https://www.statista.com/statistics/297863/leading-coffee-shop-chains-in-the-united-kingdom-uk-store-number/, https://www.theguardian.com/business/2021/may/26/starbuck-employees-intense-work-customer-abuse-understaffing. In this partnership, Starbucks pays for 56% of tuition fees for employees junior and senior years at the University. 3 pages, 1441 words. Starbucks global expansion and continued dominance in the coffeehouse industry indicates high financial performance. What to do when stakeholders matter: stakeholder identification and analysis techniques. External stakeholders still experience the effects of the business's activities but rarely hold any shares or ownership of the company. 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). Copyright 2017 2025. These shops provided personalized, individualized and intimate service, something that Starbucks could no longer provide. The external strategic factors in this part of the SWOT analysis show that Starbucks can improve its industry position by exploiting the opportunities, such as through diversification and alliances in the global industry environment. Starbucks is a global coffee company that has been in business for over 50 years.