Monica Ellis

Starbucks Analysis on External and Internal Environmental

January 19, 2015

STR/587

Brian Rowland

STARBUCKS ANALYSIS
History of Starbucks
Starbucks started out as a single store in Seattle's historic Pike Place Market in 1971. From then in 1982, Howard Schultz joins Starbucks as director of retail operations and marketing. A few years later, he traveled to Italy and was very impressed with the espresso bars that he experienced there. From then on they continued to grow. In 1984, they served their first Starbucks Caffe Latte. Then in Howard founded Il Giornale, offering brewed coffee and espresso beverages made from Starbucks® coffee beans. In 1988, they started offering both part-time and full-time employees health benefits. Their business was only continuing to grow however and in 1994 they opened their first drive thru location. At this time, Starbucks had a total of 425 locations. In 1996, they expanded internationally to Japan. Their brand continued to explode and continue to add new products and new locations on such an upswing. Currently, they have more than 17,000 stores in more than 55 countries and continue to be a growing business. Starbucks high-quality whole bean coffee, flavored teas, pastries, prepackage food items, such as warm and cold sandwiches.
Internal and External
Establishments typically function in a network and are not entirely independent because of the several environments that influence their activities and actions. Some examples of internal and external factors are micro and macro environment that influence Starbucks. Other factors are; suppliers, competitors, customers, finances, economic, political, social, environmental, as well as legislation (Starbucks, 2014).
Starbucks' home market is in the United States, which is critical to understanding the internal and external surroundings that impact the organization and its growth. Statistics indicates that coffee sales have grown by 20% percent each year and 8% of its contributed to the 18 billion dollar coffee market in the United States. At the end of 2014, coffee shops were expected to exceed well over $50,000 (e-importz.com, 2014) With the growth of coffee consumption and potential maturity of the American coffee market may have influenced overcapacity and may have intensified the organization's growth plan.
Competitors
With the economy on a downward slope, people are paying more attention to where they spend their money. Coffee is still on their mind however, but with many Americans now more closely watching their spending habits, this can take a hit on Starbucks.
McDonald's has taken a huge initiative to fill in that gap in coffee and price. They offer some of the same types of coffee at Starbucks, but at their low price. There is also the considerations of gas stations to take up some of that competition. Many users are simply exchanging their lattes and espressos for just plain coffee with maybe some flavored creamer and sugar such as 7 Eleven. Many other restaurants seeing how successful Starbucks has been, have also been "amping" up their coffee initiatives. Take McDonald's for example. While they have always have coffee on their menu, they have added popular Starbuck's imitations to their menu such as