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The Success of a Company

The success of a company is determined by numerous factors. The current paper will focus on Starbucks and it will determine the effect of its mission, vision, and stakeholders on its success. It will determine the five forces of competition and the SWOT analysis. There will be a discussion on different levels and types of strategies so as to maximize profits and competitive advantage. The paper will include an outline of a communication plan that can be used by the company in order to notify stakeholders about its strategies.

There will be a selection of two corporate governance mechanisms for evaluation of the controlling managers’ effectiveness. The leadership’s effectiveness will also be evaluated and recommendations for improvement will be made. Finally, the paper will assess the corporation’s efforts to be ethical and responsible and the impact of these efforts on its bottom-line.

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Mission, Vision, and Primary Stakeholders

The corporation’s mission statement indicates that senior managers understand the relationship between research and development. The vision of the company recognizes the essentiality of a key goal that Starbucks aspires to realize. It is this ambition that has directed the company’s vision over the years. For instance, the company envisioned having more than 2,000 stores throughout the United States by the year 2000, but the risks that they took did not make it possible. They restructured their objectives and simplified the goal by focusing on being the most recognized coffee house globally and they have since attained this goal. The company has a responsibility strategy focused on the improvement of the lives of coffee farmers and their families.

Farmers are critical stakeholders as they sell their coffee directly to the company. Other stakeholders include coffee trade organizations and other interested parties. In addition, human rights and environmental organizations also show interest. National governments in coffee-growing countries are major investors in Starbucks. The company buys most of its coffee from Kenya, Tanzania, Nicaragua, Guatemala, and Costa Rica. The company’s focus on stakeholders is an essential aspect that has contributed to its success.

The Impact of the Five Forces of Competition on Starbucks

Porter’s five forces of competition play a vital role in the determination of business-level strategies when dealing with the competition. They include the buyers’ bargaining power, potential entry of new entrants, suppliers’ bargaining power, the threat of substitute products, and competition among rivals. The economies of scale and the amount of capital required to limit the entry of new entrants who may pose competition to the company. When buyers have bargaining power, they have the ability to make or break the product. The suppliers’ bargaining power entails the concentration of suppliers and the availability of substitute suppliers.

These are significant factors in the determination of the power that suppliers possess over the company. The threat of substitute products is the power of alternatives and substitutes for the products of a company, which may impact changing costs and trends of the products. Rivalry among competitors states that competition in the industry depends on the actions of the industry players.

Starbucks is impacted by the five forces of competition. The company faces competition both domestically and internationally. The domestic competition emanates from Caribou Coffee and Tully’s Coffee, while the international competition emanates from Dunkin Doughnuts and McDonalds. The company has evolved over time to differentiate itself from the competition. It focuses mainly on word of mouth and social media for its promotional needs.

SWOT Analysis for Starbucks

The SWOT analysis of a company indicates its strengths, weaknesses, opportunities, and threats. The company’s strengths include its leadership, primary image, and reputation. The company’s clients are satisfied with the quality of service and products offered. Its stores and coffee shops are located strategically, especially along busy streets and corners, which makes them accessible to customers. The company does not franchise its stores, which enables its ability to control the quality. Its major weakness is its premium pricing. The company offers its products at a higher price than the existing competition.

As a result, a decline in the general economy has a massive impact on its operations. For instance, Starbucks had to close more than 600 stores in the USA due to the 2007 economic recession. The company has taken advantage of its opportunities to expand globally and it has entered the Asian market. The huge Asian population has played a significant role in increasing its revenue. There are still opportunities in international markets, especially in developing economies. The company’s threats emanate from the existing competition. There are numerous coffee shops throughout the world, which are implementing impressive marketing campaigns, thus attracting clients.

How to Capitalize on Strengths and Opportunities and Minimize Weaknesses and Threats

Starbucks is a profitable company and it can foster its profitability by concentrating on environmental leadership. It would be beneficial for the company to implement the economy of scale approach through the production of biodegradable paper products while reducing labor costs. The company can profit from its opportunities by partnering with other organizations in different industries so as to reduce its costs. It may also take advantage of the fair trade products and services that could be retailed in its cafeterias. It could co-brand with other food and drinks companies. It is an approach that the company can utilize in the expansion of its global market (Hitt, Ireland, & Hoskisson, 2013).

The company shows creativity in different aspects, but its sole reliance on retail coffee is a weakness. It slows down its ability to venture into other sectors. The company should deal with the competitive threat by maintaining its high quality of products. It is an approach that will foster its brand image and client retention. It should focus on its mission statement, which outlines a strategy to promote uniqueness.

Strategies to Maximize Competitiveness and Profitability within Starbucks

Diversity is one of the strategies that the company can utilize to maximize its profitability and competitiveness. The company has its products on shelves of various grocery and convenience stores. It has also stocked its shelves with a variety of items, including books, movies, and snacks. One of the most popular beverages in the world is alcohol. The company can stock wine in its stores so as to improve the variety of products available to its clients. Other than coffee, these clients can enjoy a glass of wine as they discuss their meeting issues. It would have a positive impact on the company’s revenue and profit margin. It is a strategy that is similar to what Burger King has done by selling beer in its Whopper Bar restaurants (Grant, 2013).

The company can concentrate on its partnerships with other companies. For example, it has current partnerships with Pepsi, as well as Barnes and Noble. It can also ensure that its ground coffee is available in numerous grocery and convenience stores globally. The company should continue with its research strategy like the one it conducts in partnership with Pepsi. It will benefit from the expertise, innovation, marketing, and other advantages of partners.

Communication Plan Outline to Make Strategic Recommendations Known to the Stakeholders

Communication is vital for the success of the planning and execution of any strategic project. Most projects fail as a result of the poor or the lack of proper communication. The stakeholders ought to be engaged in the project via early and consistent communication throughout. The communication plan should engage all the stakeholders and all the interested parties. All these parties have a vital role in the development of the plan, as well as strategies and they serve as the project’s impetus. The communication plan outline will have three stages, which include initial, process, and final stages.

During the initial stage, project managers will make sure that all the stakeholders have realistic communication expectations. They should be aware of the channels of communication available within the organization. Although some stakeholders, especially primary stakeholders, have direct involvement in the project and may expect high volumes and frequency of information regarding the project, other levels of stakeholders may prefer less frequent and detailed information (McPhail, 2014).

In addition, different stakeholders may prefer different communication channels, including instant messages, phone calls, and emails. They will require different types of information regarding strategies. The process stage involves communication preferences and needs that ought to be identified rapidly and then documented. Additionally, approaches that the project manager intends to use so as to meet communication demands should also be outlined within the official plan. Each of the stakeholders should receive a copy of the communication plan (McPhail, 2014).

The final stage begins after the communication is established and preferences are identified. The management should ensure that all stakeholders have received all the required information in time. It is also the responsibility of the management to ensure that different needs of the stakeholders do not create conflicts in the delivery of information.

Corporate Governance Mechanisms Applied by Starbucks in the Evaluation of its Effectiveness in the Control of Managerial Actions

In 2003, the company enhanced the diversity of its board through the appointment of new board members. It has also implemented an executive compensation approach as a part of a governance mechanism since then. It is a system that pursues the alignment of interests of managers and owners through salaries, long-term incentives, and bonuses (Hitt, Ireland, & Hoskisson, 2013).

The stakeholders take all risks as far as decision-making is concerned and therefore get criticized when decisions are unsuccessful. Such an approach differs from the location of stores. However, the company offers some highly competitive wages in the industry. The company trades on the stock market as the SBUX and it has maintained positive returns. It has been influential in the industry and it has had a large percent of the market share since its inception. It has expressed commitment towards the service of clients with the best quality brewed espressos and coffees.

For a decade from the 1990s to 2000, the company opened about one store every day, which promoted its global expansion. The company has continued to grow and develop its brand so as to remain successful even in the times of economic turmoil that has led to the closure of about six hundred of its stores. The company has maintained its focus and ambition during the period of entry into new markets. It has also remained competitive, which has enabled it to stay at the helm in the industry with a niche of new innovative products. The company’s mechanism of corporate governance has proved to be essential for its success (Hitt, Ireland, & Hoskisson, 2013).

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Effectiveness of the Leadership within Starbucks and Improvement Recommendation

The company utilizes an effective style of leadership, which is structured to incorporate all its outlets. Its structure includes Starbucks Coffee International and Starbucks U.S. The strategy involves covering all countries where the company operates. It involves the development of an organizational structure covering three regions (Grant, 2013). The regions include Chinese and Asian Markets, Americas’ Market, as well as European, Middle East, and African Markets (EMEA).

Each of the regions is overseen by a president whose responsibility is to manage the company’s retail businesses in addition to working closely with other business partners in other markets. Each of the regions operates independently in order to develop and hasten multi-brand growth opportunities in the corporation. Each of the presidents reports directly to the CEO for guidance (Michelli, 2013).

The recommendation for the improvement of the company will involve the independence of regional structures. Although they are effective in their operations, the regions are not covered in terms of economic reasons. Therefore, it would be better to eliminate the independence of the regional structures operating independently. It would be beneficial to the company if it operated as a single global force, which can foster and unify its development throughout the world. It will hasten the company’s multi-channel growth at the global level. The strategy would require the contribution of low-level managers throughout the company.

Starbuck’s Efforts towards Ethical Responsibility to Corporate Citizens and the Impact of the Efforts on the Bottom-Line

The company strives to be ethically responsible and to conduct its business in an ethical manner. The company’s approach to an ethical business covers different aspects, including community, sourcing, diversity, and the environment. The company relies and reflects on its mission and statement of values (Harnrungchalotorn & Phayonlerd, 2014). It expresses its commitment to social responsibility and to the provision of quality products and services to clients. The company also engages in fair trade, ensuring that suppliers receive their payments in time. It engages in CSR activities in different countries, including the U.K., Jordan, Latin America, and Ethiopia. Its CSR programs include the development of farmer support centers and other social facilities like schools and health facilities (Harnrungchalotorn & Phayonlerd, 2014).

The company displays its dedication to social responsibility. Conducting business in an ethical manner can benefit the company and promote its growth and performance. Normally, customers are willing to spend more and pay higher prices for the company’s products or services when they understand that the company is socially responsible (O’Riordan & Fairbrass, 2014). They take it as their way of supporting those projects. A corporation has various duties. A business should not deprive people of their rights, should assist them in case of such deprivation, aid the deprived, and avoid assisting in deprivation (O’Riordan & Fairbrass, 2014).

The company compiles an annual report, setting forth its corporate social responsibility. The company is reputed due to its commitment to the environment and fair trade (Harnrungchalotorn & Phayonlerd, 2014). These ethical efforts have impacted the company’s bottom line, making it one of the most successful companies in the world.

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Starbucks is one of the leading corporations in the world. Its mission and vision statements intended to benefit all stakeholders. It also has business- and corporate-level strategies, which are aimed at promoting its position within the industry. The analysis of the competition on the basis of the five forces of competition indicates that the company is facing massive competition within the industry, but it can maintain its position by differentiating its products.

Moreover, it should enter new markets so as to increase its market reach. The SWOT analysis shows the company’s internal and external situation. In order to take advantage of its situation and curb the impact of weaknesses and threats, it should diversify its products. It is an effective approach that will protect it from the effect of adverse economic conditions. The company’s leadership has proved its effectiveness in operations, which has led to the company’s leading industry position. Finally, it should continue operating ethically and being socially responsible as it develops a positive image for the company and attracts clients.

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