Friday, October 20, 2017

Types of Strategic Analysis

Discussing Strategic Analysis

Value chain analysis is one such framework. Value chain analysis views a firm as a “chain” or sequential process of value-creating activities. The sum of all of these activities represents the “value” the firm exists to provide its customers. So undertaking an internal analysis that breaks down the firm into these distinct value activities allows for a detailed, interrelated evaluation of a firm’s internal strengths and weaknesses that improves upon what strategists can create using only SWOT analysis. (Pearce, J., Robinson, R. 2016)
Starbucks VCA consist of two chains. The First one ifs the Inbound logistics whick includes the obtaining of raw materials from the suppliers. The focus of Starbucks has been on maintaining excellent relationships with the suppliers. To ensure that it could get a continuous supply of green coffee it has started a number of programs to maintain and manage its supply chain better. Its farmer support centers are a key part of its supply chain management program that provide support to the coffee and tea producing farmers. Also includes roasting the coffee, operation, warehouse and distribution. (Prapta, A, 2017)
The second chain is the Outbound Logistics which entails Starbucks sells its products to the customers via the company stores and its licensed stores mainly. The ready products are shipped to the retail stores from the warehouses and distribution centers where they are displayed and sold. Apart from it Starbucks also uses online channels for selling its products and merchandise.  A limited range of Starbucks products can be found at Walmart and Target stores too. (Prapta, A, 2017)
The resource-based view (RBV) of a firm is another important framework for conducting internal analysis. This approach improves upon SWOT analysis by examining a variety of different yet specific types of resources and capabilities any firm possesses and then evaluating the degree to which they become the basis for sustained competitive advantage based on industry and competitive considerations. In so doing, it provides a disciplined approach to internal analysis.(Pearce, J., Robinson, R. 2016)
Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market. Today, we are privileged to connect with millions of customers every day with exceptional products and more than 24,000 retail stores in 70 countries.  Starbucks went public on June 26, 1992 at a price of $17 per share (or $0.53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21.50 per share .Starbucks was incorporated under the laws of the State of Washington, in Olympia, Washington, on Nov. 4, 1985. Starbucks Corporation's common stock is listed on NASDAQ, under the trading symbol SBUX. (Starbucks)
SWOT is an acronym for the internal Strengths and Weaknesses of a firm, and the environmental Opportunities and Threats facing that firm. SWOT analysis is a technique through which managers create a quick overview of a company’s strategic situation.(Pearce, J., Robinson, R. 2016)
Strength:  "Starbucks is a well-recognized brand throughout much of the world, and likely the most recognizable brand in the coffeehouse business. The Starbucks logo is easily identifiable, and attracts both new and repeat customers. Stores are typically in the most prime locations around the globe, with high traffic and visibility." (Dalavagas, 2016)
Weaknesses:  "Since Starbucks is dependent on consumer discretionary spending, its results are sensitive to changes in macroeconomic conditions. As a result, when the U.S. economy does inevitably begin to slow, softer results on the home front may not be able to be offset by gains in other geographic regions."(Dalavagas, 2016)
Opportunities:  "Starbucks has been branching out from its retail operations in order to boost profitability. Consumer packaged goods, including coffee beans and branded single-serve coffee pods used by home-brewing machines, including K-Cup portion packs used in the popular Green Mountain (GMCRKeurig machines, offer an exciting opportunity. Starbucks is already the number one premium coffee brand in the K-Cup category, and it hopes to further expand its market share in the coming quarters. Packaged coffee, teas, and ready-to-drink products can leverage the Starbucks brand to add business."(Dalavagas, 2016)
Threats: " The specialty coffee business remains highly competitive with respect to price, quality, service, and convenience. In the U.S., large companies in the quick-service restaurant sector have been increasing efforts to sell high-quality specialty coffee beverages. McDonald’s  has been making a big push into the coffee business in recent quarters, and this could become a big challenge for SBUX. Another major competitor is Dunkin’ Brands Group, which has been in the coffee business for a long time. This company has long had a strong presence in the eastern portion of the U.S, and is expanding in the western part of the country. Starbucks also has competition from smaller, local, mom-and-pop specialty coffee shops around the globe that may offer a more intimate setting. The market for packaged coffee, tea, single-serve packs, and ready-to-drink beverages has been heating up, as well."(Dalavagas, 2016)
References
Pearce, J., Robinson, R. (2016-01-02). Strategic Management, 13th Edition. [Kaplan].
Prapta, A; (2017). Porte's Value Chain Analysis of Starbucks. Retreived on September 9,2017 from; https://www.cheshnotes.com/2017/02/porters-value-chain-analysis-of-starbucks/
Starbucks Company Profile Retrieved on September 9, 2017 from:
  Dalavagas,I, (2016). SWOT Analysis: Starbucks Corp: Retrieved on Septermber 9, 2017 from;

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