Standard of education and skills should be given more importance when it comes to building new locations, because if the standards of education and skills is low of the employees, then Starbucks will have to train them a lot as they won`t have any idea how to run the cash register efficiently, how to speak to the customers, and serve properly the customers so this may lead to Starbucks losing more customers and falling into a loss, however if both the education and skills are high of the employees, then Starbucks will have to train them less as they already have lot of knowledge on how to run the cash register efficiently, how to speak fluently to the customers, and serve the customers properly which will gain Starbucks to make profit. Working conditions/safety.
People with higher income: Those people with the most disposable income, e. g. young single professionals etc. , will be familiarized to high standards. Starbucks must be sure that its shops are fresh and comfortable, service is of the main demand and health and safety issues are fully addressed.
For staff and customers transport is vital as where there is an easy access the staff and the customers won`t be able to provide a reason for staff to come late and for customers to have a look at the stores. Age distribution: It could be seen that majority of the people are getting older and the rates of the birth are falling down. Currently, Starbucks is focusing on selling their items to younger generation; however their opinions might change in long term as the proportion of the market for young people reduces.
The most effective way might be to expand the target market although there might be danger of separating the existing customers. Health consciousness: The development that is happening in western societies is crucial as this is where people want good healthy food as it is related with healthy living in the current market.
Starbucks can use this facts when they are thinking of selling extra products, also coffee, as huge number of their customers want healthy substitutes of cakes and biscuits, which have been related with the coffee in the past. Technological: IT development: Starbucks is offering free and unlimited Wi-Fi that is why their policy has changed as they are providing people to use two hours of the Wi-Fi to the cardholders of Starbucks. However, now people can take advantage of using the unlimited Wi-Fi any time when they want and as long as they want. New materials and processes: With the improvement of the technology in making the coffee machines and computers which Starbucks use to run the cash registers will help the staff to work more rapidly and capably. This will help to assists customers even rapidly and assist more customers in a day.
This will stop the customers not having to wait for ages as a result benefiting the relations amongst the customers and growing the base of the customers. Software upgrades: To keep ahead of the competition Starbucks must find effective software promotions. This relates to refining the websites they have and also developing the rapidness and the excellence of the service which are delivered on the shop floor. Rate of technological change: In today`s world market the speed of the change in technology is higher than it was before thirty years ago. Most of them have got to do with the internet and the rapidness from where around the world the information could be interconnected.
To remain ahead of their competitors, Starbucks need to spend heavily only to be immobile in increasing and improving market. Legal: 1. Employment law – Individual countries have different employment laws. Some countries may have restriction on how many hours should each of the employees work each week and every employees will be paid different salaries. When transferring to another place, Starbucks should take all this as an important issue. 1. Health and Safety regulations- Starbucks may find that in some countries Health and Safety regulations are not followed. It would a good idea to apply the health and safety regulations in all of the shops to maintain a good universal image.
Even if they do not keep the high standards they will have to pay large amount of money as they have to ensure legally that their customers and staff are safe while they are inside the stores. 1. Monopolies Commission- To control a larger proportion of the market, Starbucks would consider growing their operations further which they already have they will have to study the fact of breaching the monopolies law as they might have a larger share market. This would be biased as they can take over the other companies very easily. So, it indicates that they could enjoy the economies of scale and control the prices which were not competitive and escape because of the non-existence of the competition.
Land Use- As some of the areas of land maybe endangered, so that is why Starbucks may have to follow by the rules of the local planning when constructing shops or modifying the purchased locations. The local government would speak related with all of these problems. Environmental: 1. Pollution problem- The customers of Starbucks provides lot of wastes as they get out of the shop with the coffee in their hand and later on places on the street. As other resources could cause damage to the environment, so that is why the packaging should be done naturally. 1. Work disposal- As there are severe laws in majority of the countries to confirm the firm trading in their country which arranges the waste which are generated in their business in a exact and effective way.
If these laws are not followed by Starbucks then they may find themselves being certified, this will not only affect them economically but also creates a dull impression on the brand name. 1. Environmental pressure groups – Starbucks should be careful of the physical and influential power of the members which includes Greenpeace and Friends of the Earth. Any destruction to the animal or environmental rights from a company is basically rapidly followed. PORTER FIVE FORCES: 1. The Threat of Substitution: As there are lot of caffeinated beverages accessible in the market, so that is why the threat of the substitute is high. 1. The Threat of New Entry: As there are necessities for the capital, so that is why the threat of the new entry is high, as it is not expensive to open up a coffee shop.
Compared to brand identities the threat is low, as they have been achieving their ones successfully. 1. Competitive Rivalry: As the industry rises, competition is gradually growing in contrast to Starbucks. Competitors seek an advantage that is by reducing the price, bringing in a competitor’s product, extent the product to raise the share of the market or attach the alterations which the other competitors need to accept to save it. 1. The Bargaining Power of Suppliers: As Starbucks is a well- known company that is why any suppliers will supply goods to them, so that is why coffee beans suppliers have low bargaining power as they know that Starbucks can go to any suppliers to get those goods which they want.
So, Starbucks could get supplies of paper and plastic products, like cups, napkins, lids, etc. having very less power to bargain because they have large amount of substitute from where they could pull from. 1. The Bargaining Power of Buyers: When premium coffee came like Starbucks, the buyers did not have much of the power to bargain, this happened because of the sheer scale which causes the decrease of the power to bargain to any members of the groups of buyers. By new entrants coming in and competitors like Mc Donalds who entitles to give the finest roast coffee of sensible class for lower price, buyers now can influence to bargain more compared to the bargaining power they had before.
