Subject: Business Strategy Make a Presentation on the Following: . Understand th
ID: 370468 • Letter: S
Question
Subject: Business Strategy
Make a Presentation on the Following:
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Understand the process of strategic planning
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2.2 - Carry out an environmental audit for the organisation.
Guideline to achieve a pass on criteria 2.2
To complete this criterion you are required to review various external environmental factors which could pose challenges for Starbucks in the UAE. You need to complete:-
A detailed PESTEL analysis on the UAE
Competitor’s analysis using Porters 5 Forces theory on Starbucks’s industry.
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2.3- Assess the significance of stakeholder analysis when formulating a new strategy
Guideline to achieve a pass on criteria 2.3
Stakeholder analysis is important for the development of an organisation. To understand and explain the importance of stakeholder’s analysis in strategy planning, you have to complete the following points:
Identify and list at least 5 stakeholders for Starbucks.
Complete a stakeholder’s map explaining relationship and patterns of interdependence between Starbucks stakeholders.
State the interest of each Starbucks stakeholder.
Explain the role and importance of stakeholders analysis in strategy formulation
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2.4 – Present a new strategy for a given organisation
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Guideline to achieve a pass on criteria 2.4
Based on your previous criteria research and analysis prepare a strategic plan for Starbucks. State the objectives for Starbucks for the 2018 planning period. The plan could be made in any of the following fields
Explanation / Answer
SWOT Analysis of Starbucks
Strength
Weakness
Opportunity
Threat
PESTEL Analysis of Starbucks in UAE:
Political Factors
Economic Factors
Social Factors
Technological Factors
Environmental Factors
1.UAE climate is mostly warm, and people will mostly prefer the cold coffee over hot one
2.Starbucks operation should promote recycling, waste management and energy efficient process
Legal Factors
Porter 5 forces Analysis of Starbucks
Competitive Rivalry
Strong
Bargaining Power of Buyer
Strong
Bargaining Power of Supplier
Weak
Threat of Substitution
Strong
Threat of New entrants
Moderate
Competitive Rivalry: Starbucks faces intense rivalry from other multinational chain such as MacDonald and Dunkin Donuts etc.
Bargaining Power of Buyer: Due to availability of other store customer faces low switching cost and many substitutes are available. Due higher price point of Starbucks product we can also say that customer base is small with lower number of per transactions.
Bargaining Power of Supplier: In coffee industry ample number of suppliers are there to provide the coffee beans as raw material. Hence the overall supply chain is large with high variety of product quality which makes suppliers to have less bargaining power over product maker.
Threat of Substitution: Because of low switching cost, high competitive market with ample of availability of substitutes, put Starbucks in weaker position.
Threat of New entrants: High cost of Brand Development makes the industry less prone for new entrants hence until the incumbent players degrade the quality of offerings, they can enjoy the fruit of making money in the market.
Five Important stakeholder for Starbucks are:
Shareholders: As Starbucks is public- traded company and doing good business, meanwhile it also maintains great relationship with its stakeholders too.
Employees: Unlike US where employees are also the part of decision making process, the same is not visible in the UAE. Starbucks crucial challenge is to train the store managers and employees about the products quality and companies values, therefore the reputation of the same should not gets tarnished in the UAE.
Customers: High price with Quality product while operating in cosmopolitan country Starbucks needs to ensure needs to gauge the local taste along with varied consumer preferences in UAE.
Franchise: To maintain the positive brand image of the company across different geographies, Starbucks must maintain good relationship with its partner and Franchise and promote them to become the agent of Starbucks positive Brand image.
Suppliers: High quality end product requires the high quality of raw material, therefore wither Starbucks complete the backward integration or have good relationship with the farmers, Therefore the complete value chain have great quality products even operating in different geography too.
Starbucks should give prime importance to its relationship with different stake holders going forward. Although it maintains good relationship with its shareholders, but they need to focus on making it more transparent to outside the world using various media. Improve the communication and open conversation with local communities and involve more in Corporate Social Responsibilities.
Competitive Rivalry
Strong
Bargaining Power of Buyer
Strong
Bargaining Power of Supplier
Weak
Threat of Substitution
Strong
Threat of New entrants
Moderate