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Running head: STARBUCKS BUSINESS ENVIRONMENT 1

Starbucks Business Environment

Specific Key Environmental Forces

For a company to exist there must be environmental enablers. The opposite of this, is market constraints that ensure that a particular business cannot exist. Environmental enablers do not only make it possible for a particular business to be created but they also ensure the continuity of such a business.

One of the specific key forces that created an opportunity for Starbucks to exist is the government enabling tape. This enabling tape by the United States helps the business to open up and run smoothly because the government rarely interferes unless there is need for it to. This need is brought about when the company has been hurt or the company has hurt the members of the public. Some governments in the world has made it hard for businesses to exist due to the technicalities involved in opening the business and the harsh rules that come with operating the such businesses (Simon, 2009). This results in the business being deterred from opening up. The United States, however, ensures a very enabling environment for the companies and this was very beneficial to Starbucks.

Another example of a specific key force that created an opportunity for Starbucks is the existing gaps in the market. One of such gap is that when other companies that existed in the coffee industry concentrated on the coffee itself, Starbucks introduced a new dimension of targeting the customers. The company targeted the need for social interaction amongst the people as they sat to have a cup of coffee. This means that the company created an enabling environment for its customers to come and enjoy the company of each other while having a cup of coffee or other products that the company produces. This attracted many customers as the place now became a perfect spot to hangout. When the other companies were trying to emulate this move, Starbucks had already cut a niche for itself. This was a very important force for the company (Bussing-Burks, 2009).

Changes in the Purchasing Patterns

It is likely that the target market of a particular organization will have changes in their purchasing patterns of the organization’s products. This trend has also been experienced at Starbucks. One of the changes that have been seen with regard to the customer’s purchasing patterns is that most of the customers are now going for the specialty type of coffee as opposed to the situation that was in the past. The coffee industry has risen to levels that could not be foreseen in the past and this comes with different expectations from the consumers. As the consumers get educated on the processes involved in coming up with espresso-based coffees, most of them now are moving toward the direction of demanding specialty coffees. This is the major change that has been experienced with regard to consumer purchasing pattern.

Another major change that has been witnessed is that the consumers are now moving from ordering coffee because of the other additives that are added to go with the coffee. This means that now consumers are purchasing coffee not because of the additives it comes with but because of the need to have a cup of coffee. This change in consumer purchasing pattern shows that the consumers are now paying more attention to the quality of the coffee itself. Consumers do not purchase the flavored lattes and beverages that have been blended because they are also becoming prices sensitive. This forces the company to adapt the means of living to the customers’ expectations while still making profits. This has led to Starbucks changing the quantity of the coffee to make it smaller but of high quality.

Social Forces Affecting the Company

In being true to the company’s mission statement, Starbucks have developed ways in which it shows the members of the public of the willingness it has to ensure that it has a positive impact on the social environmental force. In doing so, the company has developed innovative ways that bring about change in the relations taking place in the surrounding. The company is advocating for lifestyle change that would see the generation X purchasing coffee the more as opposed to the current situation whereby only the older people in the society purchase coffee on daily basis (Pham-Gia, 2009). This has made the company to come up with different principles to help this to come into reality. One of such principles is how the company strives to produce products that are environmental friendly as the generation X has been taught to place much importance to the environment.

1. Economic

The world has experienced global economic problems and as such, the people are becoming more and more sensitive about the value they are getting from Starbucks. This is not only with regard to the customers but also to the employees of the company. This has led to the company to come up with measures of dealing with the high labor and operational costs. One of the ways in which the company wants to achieve this is by ensuring that it sells high quality products at small quantities to enable a lot of consumers to be able to buy the products (Schultz, and Gordon, 2011). This would see the company retain the customers and as such, it will continue making profits. These profits will be good in catering for the operational costs and thereby ensuring continuity of the company doing business in future.

1. Technological

For every business that wishes to make an impact in the business world, implementing technological innovations are the way to go. Starbucks has realized this and it has made decisions in the past that reflects this. Among the decisions that show Starbucks is aware of this need is the company’s provision of Wi-Fi in its outlets. This draws a lot of customers to the company as they can now surf as they take the company’s products. Enabling mobile payments is also a great move that reflects the company’s awareness of technological need. The company places a lot of importance on technological innovations and this is why the company has managed to do so well.

1. Competitive

One of the most competitive industries for a company to operate in is the coffee industry. This is because of the companies that exist in the industry and still the desire by more companies to penetrate the industry. Starbucks has devised ways of fighting competition in order to continue being relevant. It has offered differentiation with regard to the services offered by the company. One of the ways that the company has showed that it is well aware of the dangers of being beaten by competition is by the company’s move of partnering with Apple to create an app based discount coupons. This has done so well with regard to ensuring the consumer’s perception of the company as a world leader in the industry and this has helped the company in retaining its customers.

1. Regulatory

Starbucks is a company that has a lot of respect for the laws in place of a particular country in which it has its operations. This is because the company does not want to go against the laws since it would hurt its operations. Before the company opens up branches in foreign countries, it takes time to dig deeper and understand the laws of the land. The company has also maintained a good reputation of being in good books with regard to the laws. It has not introduced caffeinated beverages as this would go against the health regulations. This shows that the company pays attention to the regulatory force while conducting its business operations and this has helped in making it such successful company.

Differentiation Strategy

For a company to be able to rise above the competition in the industry, differentiation is the way to go. Every company that rises above the competition in a given industry knows this and puts in place measures that help in the same. Starbucks can also undertake a differentiation strategy that would see it encourage the target company to go the company’s products over the others available in the market (Fellner, 2008). Starbucks must concentrate in ensuring that the consumers view it as the best company in the industry. This will be achieved by differentiation and a lot of advertising on the same. If the consumers feel that they are getting a lot of value for their money they will choose the company’s products over what is offered by the competition. Among the differences is in the way that Starbucks deals with house roast while the competing firms, like MacDonald’s, deal with light roast.

According to Gilbert, (2008), Starbucks can introduce lighter roast for itself instead of house roast. This will go a long way in ensuring that the consumers are given a tastier product and the experience would be good for both the company and the consumers as many consumers prefer light roast to house roast.

Lessons Learn From the Geek Squad Case Study

Different lessons can be taken from the Geek Squad case study. One of the lessons is that a company should strive to keep its promises. One of the ways to keep the clients and customers of a company is delivering what the company has promised. It is not advisable for a company to promise something that it cannot deliver as this will make it seem incompetent in the eyes of the consumers and may make the consumers to choose the competition over it. This can be achieved by the company paying attention even to the smallest of details when it comes to its productions. This will help retain the customers as it is always easy to retain customers than attract new ones.

Another example of a lesson that can be learnt is that it is important for a company to accept when it is at fault. If the consumers sense that the company is ready to accept its mistakes, they will trust such a company as the company will seem honest to them and honesty is a very valued virtue when it comes to the company relating with the consumers of its products.

References

Bussing-Burks, M. (2009). Starbucks. Santa Barbara, Calif: Greenwood Press.

Fellner, K. (2008). Wrestling with Starbucks: Conscience, capital, cappuccino. New Brunswick, NJ: Rutgers University Press.

Gilbert, S. (2008). The story of Starbucks. Mankato, MN: Creative Education.

Michelli, J. A. (2007). The Starbucks experience: 5 principles for turning ordinary into extraordinary. New York: McGraw-Hill.

Moe, M. (2008). Finding the next Starbucks: How to identify and invest in the hot stocks of tomorrow. New York: Portfolio.

Pahl, N. (2008). The idea behind the Starbucks experience: The main elements of Starbucks' strategic diamond. Munchen: GRIN Verlag.

Pham-Gia, K. (2009). Marketing strategy of 'Starbucks Coffe'. München: GRIN Verlag GmbH.

Schultz, H., & Gordon, J. (2011). Onward: How Starbucks fought for its life without losing its soul. West Sussex [England: Wiley & Sons.

Simon, B. (2009). Everything but the coffee: Learning about America from Starbucks. Berkeley: University of California Press.