Analysis of Starbucks Corporation

Analysisof Starbucks Corporation

StarbucksCorporation is the biggest coffeehouse business in the United States.The company was founded in 1971 in Seattle and has since grown to bea global leader in the fast food industry. Currently, the company hasemployed about 180,000 employees and has over 20, 000 licensed storesaround the world (StarbucksCoffee Company,2016). Starbucks cooperation mainly sales premium-priced coffee, avariety of fresh foods, beverages, and tea. On top of the food items,Starbucks also markets its products brand name with portfolios suchas Starbucks Refreshers, Tazo, and Verismo among others. Being thatStarbucks operates a very fragile and very competitive business, onefactor that has contributed to its success has been effectivemanagement of internal and external environment factors. This essayis going to discuss five important target groups and how they affectthe organization.

Thebusiness environment of Starbucks

Businessenvironment refers to all the factors that have an impact on thecompany`s operations. These factors can be external or internal, andmost of them are usually beyond the control of the organization.

Internaltarget groups

Thisrefers to the immediate environment that has a direct impact on thebusiness. Additionally, most of the internal target groups tend to becontrollable because the company can manipulate them to serve itsgoals and objectives.

  1. Employees

Thestrength and determination of the employees have a very crucial roleto play at Starbucks. For the employees to work efficiently, theyneed to be motivated and have the necessary skills that are requiredfor maximum output. Starbucks is known for its highly trained andknowledgeable employees. According to the company’s chief operatingofficer, the employees are the main asset (Starbucks Coffee Company,2016). In order to empower them, they are usually given greatbenefits such as retirement accounts and free training. A criticallook at Starbucks case illustrates that effective human capitalmanagement often results in great customer experience and thus moreprofits. However, employee numbers should be kept moderate becauseexcess workers translate to increased cost of operations.

  1. Customers

AtStarbucks, everything is customer-centered (StarbucksCoffee Company,2016). This means that the management values its clients and will doanything to ensure that they remain loyal. The company has put inplace several reward programs such as the Starbucks card to driveloyalty. The benefits of holding a Starbucks card is that it providesthe customer with convenience and increase the frequency of storevisits. This internal target group has an impact on businessoperations in that when their numbers decline, the company is likelyto fail. Customer`s attitude and turnout can have negative andpositive influence because the business can use it to measurecompany’s success and failure (Brinkman, Navarro &amp Harper,2014).

Externaltarget group

  1. Suppliers

Starbucks`main input is coffee Arabica which is mainly imported from Asiancountries such as China and Saudi Arabia. Since there are othercompetitors such as Mc Donalds, it is evident that they need tomaintain close relations with their suppliers to ensure a constantsupply. Considering its size and scale, it is evident that Starbuck’scan take advantage of its suppliers and underquote the prices ofcoffee. Starbucks, however, adhere to internationally recommendedprices. Starbucks` size gives it a competitive edge over thesuppliers. The resultant impact of this is that suppliers usuallyhave a lower bargaining power. Suppliers heavily determine the amountof product that is available on the market for sale. In cases wheresuppliers command a lot of authority such as in the oil and petroleumindustry, they can cause temporary shortages so as to hike theprices.

  1. Competitors

Thefast food industry is very dynamic. Competition is steadily growingon a daily basis. Currently, Starbucks dominate the coffee market at35% while others share the rest. High level of competition amongbusinesses is likely to promote innovation because the companies willhave to find new ways of appealing to their customers (Brinkman,Navarro &amp Harper, 2014). A highly competitive market is likely tohave superior products because every company works hard to outdo theother and maintain client loyalty. Additionally, competition can alsoresult in price wars, and this can have a lot of negative impacts onsales volume and profitability.

  1. The political class

Inorder for Starbucks to operate in the United States and any othercountry, it must adhere to the laws and regulations that regulatetrading activities. Political decisions regarding taxes can affectbusinesses in that they can lead to a rise in prices of items beingsold and raw material. This is because companies are usually forcedto pass the tax burden to their clients. Consequently, governmentpolicies regulating imports and exports can also influence businessoperations because some can discourage importing products fromparticular countries or continents. Lastly, government policies suchas minimum salary wage can also affect business operations in that incases where the figures are set high, and businesses are usuallyforced to hire few people so as to reduce their operational costs.

Communicationbetween the Target Groups

InternalTarget groups

Effectivecommunication between various departments of a company is usually keyin determining its success. The organization needs to be respectfuland mindful of their target group`s culture before communicating withthem. In the case whereby the organization need to contact itscustomers, some of the things that will have to be different from theemployee`s conversation is the belief that the clients are alwaysright. This is because unlike employees who are dependent on thebusiness and has limited options, the customer is always free toexploit other markets before making his or her decision. When sellinga product to potential clients, it is important that the organizationunderstands the culture of its buyers and be equipped with the latesttechnologies so as to compete equally with other firms.

ExternalTarget groups

Communicationbetween the organization and external target groups is usually veryprofessional. For example, Starbucks may use emails, phone calls, andfax when communication with their suppliers, the government orcompetitors. These forms of communication are different from thoseused when marketing a product because in this case, the recipient isnot interested in buying the items. Additionally, when communicatingwith suppliers and the government, records are usually kept safely toserve as future evidence in case there are any disputes. Marketingmessages often use enticing words so as to capture the attention ofcustomers. Professionalism is encouraged when communicating withexternal target groups because it creates goodwill and trust betweenthe parties.


Starbucksis a multinational company that has specialized in the sales ofpremium-priced coffee, a variety of fresh foods, beverages, and tea.However, its success has mainly been influenced by various externaland internal factors or target groups. Efficient management of thesetarget groups have resulted in increased sales and customer’sloyalty.


Brinkman,J., Navarro, I., &amp Harper, D. (2014).&nbspUnlockingthe business environment.Routledge.

StarbucksCoffee Company.(2016). About us. Retrieved from