Term Paper: Tools for Strategic Planning and Competitive Analysis

Pages: 5 (1474 words)  ·  Bibliography Sources: 1+  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper


[. . .] Jockeying for position and market share among the current competitors in the industry -- The Juan Valdez Cafe coffee company that went after Starbucks market share right on the street corners of Seattle, the birthplace of Starbucks Coffee Company, is no longer in that location. The seller of Columbian coffee continues to operate internationally and has stores in Washington, D.C. And Manhattan.

2. Threat of new entrants or new customers -- Starbucks has weathered several concerted attacks from competitors, most notably fast food chains, but the company continues to reinvent itself.

3. Bargaining power of customers -- When fast food chains began serving specialty coffee beverages, Starbucks lost some customers. Market segmentation would show that the migrating customers were predominantly price sensitive, while many of Starbucks customers have not demonstrated price sensitivity, even during the height of the fiscal crisis. The Starbucks offering is as much ambiance and status as it is brewed coffee, and it is this service differentiation that undermines even the most concerted efforts of competitors to draw Starbucks customers away.

4. Bargaining power of suppliers -- A wide array of suppliers partner with Starbucks to fulfill their hot and cold snacks and bistro meals. There have been difficulties with suppliers in the past. Starbucks has acquired companies to produce their baked goods, and it has partnered with other companies, engaging in exclusive arrangements to feature products in the stores such as acquired food partner La Boulange, the San Francisco chainlet of Parisian-style shops previously owned by Frenchman Pascal Rigo and specializing in pastry.

5. Threat of substitute products or services -- Starbucks has effectively neutralized this force when it created and established new beverage products, increasing the product line to include Tazo teas, all manner of hand built coffee beverage, healthful blended drinks, decadent European hot sipping chocolate, and -- now -- specialized Starbucks stores that serve alcoholic beverages.

Core Competencies of the Organization

Starbucks core competencies include an expertise in coffee roasting and hand-built beverages, and the provision of the Starbucks Experience: The Third Place. Starbucks is competitive in personnel management, too. Starbucks' employee turnover is low with a 60% turnover rate compared to the industry average of 140%.

Strategic Advantages of the Organization

Starbucks exhibits the attributes of a change ready organization. Although it has undergone some hiccups with leadership and endured the fiscal crisis of 2008, the company once again has Howard Schultz at the helm. Schultz is beloved and respected by most of the employees in the company, however, he does periodically give the baristas grief over wages, and the matter of benefits to part-time employees. By and large, though, Starbucks executive team is effective and respected. Starbucks partners (associates) are encouraged to submit ideas about how to improve the company, and the suggestions that are enacted are publicized on the company website. Starbucks has mastered social media and, in addition to nurturing brand ambassadors, the company uses social media as a means of keeping in touch with customer sentiment and suggestions for product and service improvement. It would not be accurate to say that Starbucks is organic and nonhierarchical, but Starbucks does have a culture of accountability: performance is central to Starbucks manner of doing business. The company is so competitive that it cannibalized its own stores in order to claim sales territory before other coffee houses could be located in those places. For a time, it seemed that there truly was a Starbucks store on every corner, but the company felt the financial drain of decreased year-over-year sales in stores and many stores were closed.


Chen, J. (2013). 2013, The Year of Starbucks. Retreived http://seekingalpha.com/article/1103821-2013-the-year-of-starbucks

Starbucks (2013).Investor overview. Retreived http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome

Interbrand (2013). Best Global Brands 2012. Retreived http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx [END OF PREVIEW]

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Tools for Strategic Planning and Competitive Analysis.  (2014, May 10).  Retrieved June 17, 2019, from https://www.essaytown.com/subjects/paper/tools-strategic-planning-competitive/8462251

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"Tools for Strategic Planning and Competitive Analysis."  Essaytown.com.  May 10, 2014.  Accessed June 17, 2019.