Strategic Management

1 Introduction

Strategic Management analysis is done to assess the strategic fit between a company’s competencies and its strategy. This analysis also includes a match of the internal strengths of the company with the external drivers or the external environmental factors to understand how they stack up against each other. This report analyzes the strategic fit between Starbucks and its business segment in the country selected for this report, which is the United States. This report examines in detail how Starbucks competes in the United States with reference to the market analysis in the chosen country, an analysis of the company’s internal and external environment, and finally, assessing the strategic fit between the company and its business drivers (Grant, 2011, 17).

Starbucks Coffee Company, which was founded in 1971, is a specialty coffee retailer which is one of the leading coffee brands in the United States. The company, headquartered in Seattle, WA, operates in 37 countries all over the world. The backbone of the company’s operations is its company-owned retail stores, which are hubs for consumers to consume coffee and related products. The key aspect of Starbucks’ business is a strong differentiation strategy, which would transform a $0.5 commodity into a $4 experience (Harding, 2010, 32).

The report is divided into three tasks, Task A, Task B, and Task C, with each task representing one specific focus area. While the Task A analyzes the external market environment in the United States, the Task B analyzes the internal capabilities of Starbucks from the strategic perspective. Finally, the report provides some recommendations as to how Starbucks can implement its strategy better in the United States.

1.1 Mission Statement

The mission statement of Starbucks is as follows:

Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

2 Task A

2.1 Market Environment Analysis

The country chosen for Market Analysis is the United States. The importance of market analysis lies in the fact that the strategy of Starbucks has to be formulated in such a way that it addresses the external determinants in the market. For instance, the PESTLE analysis done below would indicate what the external drivers for Starbucks are. Similarly, the Porter’s Five Forces model would indicate the impact of the external drivers on the company’s strategy. Third, the BCG matrix and the Industry Life Cycle analysis would indicate the stage at which the portfolio of products that Starbucks’ markets are positioned. Apart from this, the significance of external market environmental analysis is that it provides a snapshot of how the external