Strategic Management & Business Policy
Week Two Assignment: Starbucks
From its humble beginning to multi-billion dollar corporation, Starbucks has had its fair share of ups and downs. Many of which can be associated with the constant changes in public demand. By utilizing the SWOT, the company was able to not only tackle each of the obstacles it in countered, it managed to strengthen organization and stay ahead of the competition.
SWOT is an acronym that stands for a company’s strengths, weaknesses, opportunities, and threats analysis. This analysis tool is used by the strategic business unit (SBU) to identify the company’s internal strengthens and weaknesses, as well as external ...view middle of the document...
This is by far, the company’s greatest strength. The owners tinkered with various blends to create their own product that would set them apart from the rest of the competition.
Unfortunately, during the beginning years the company did not sell pre-made beverages. Instead they focused on selling the product and equipment needed to process the beans in to coffee. Although they would occasionally offer samples of their product to customers in order to attract more business. Either way, the public fell in love with their product, and the y soon had multiple locations in the Seattle area. Not too long after the company’s expansion an investor form the east coast ventured into their store and saw the potential to create a company that would be recognized nationwide. Howard Schultz approached the store owners with a business plan to expand their company outside of their hometown. Siegel, Bowker, and Baldwin were hesitant on the idea of expanding. This proved to be the companies greatest weakness, not only did the owners not want to expand beyond their city limits they were adamant to stay within the retail business.
So far the company’s strength is the expansive knowledge they have of the product. And its weakness is the inability to adapt and expand. Since the company has become well known for its product it continued to open up multiple locations within Seattle to reach as many customers as possible. The company also focused on building relationships with its customers in order to create a sense of familiarity, that would create customer loyalty. The area that needs improvement would be the lack of faith within the company. What the owners should have done was hired a market research team to identify possible outcomes would come from expanding the business. This would have allowed them to gather information to see if the expansion was worth the risk.
Schultz saw a promising future for the company’s product, but the three men were unsure and reluctant to change their business practice. The company was doing quite well and did not see the need to change. This did affect the business in the long run as the original investors acquired another chain, and began focusing their attention on the new company they had purchased. This would cause tension between the employees and management. While the owners began to express interest in other areas of business the employees began to feel abandoned. Eventually the employees unionized against the company in order to protect themselves. During this time Schultz also left the company due to the lack of support for pre-made beverages. He left the company to start a company that would sell coffee and other various beverages to busy customers, within a couple years he became the proud owner of a rather successful business.
After a couple years the owners decided to sell Starbucks and peruse their own interest. Schultz saw an opportunity to merge the two companies and mold it to fit the needs of the public....