STRATEGIC HOSPITALITY MANAGEMENT

MODULE PERIOD: 1 / 2014 - 2015

WEEKLY REPORT
Internal Analysis
CBL
REPORT
NUMBER

WEEK

NAME OF CBL SUB-GROUP MEMBER

CBL GROUP
AND SUBGROUP

IH3SHMI
Group A

RELATION NUMBER

1. Anouk Nieuwenhuizen

311200

2.Larissa Brouwer

313629

3.Cynthia Boorsma

310093

4.Robert de Vries

315621

5.Maxime Den Houdijker

312827

6.Anne Jochems

308544

Table of content
Table of content

Page 2

Chapter 1
Vision, Mission, long-term goals, Objectives, Strategies and Business
Model
Page 3
Chapter 2
Business Model and the link with the Companys current Strategies
Page 4,5,6
Chapter 3
Strategic Capabilities
Page 6,7
Chapter 4
An Internal Factor Evaluation Matrix
Page 7,8,9
Recourses

Page 3

1.Vision, Mission, Long-term goals, Objectives,

Strategies and Business Model:
Starbucks vision:
A dedication of innovation and operational excellence. A foundation of
strong values. Together, these topics are driving Starbucks performance.
Starbucks mission:
Starbucks mission statement is inspiration and connection one cup at a
time. To inspire the human spirit is a something that cannot be served in a
cup with whipped cream.
Starbucks has principles and a mission that guides all of the employees as
they go about their daily business:
Coffee: It has always been, and will always be, about quality. Partners:
They always treat each other with respect. They hold each other to that
standard. Customers: When they are fully engaged, they connect and
laugh with the customers, even if it is just for a few moments. Stores: It is
about enjoyment at the speed of life, sometimes slow, sometimes faster.
Neighborhood: Bringing together their partners, and customers to
contribute every day. Shareholders: They are responsible to get each of
these elements right, so that Starbucks and everyone it touches can
endure.
Other missions are providing great work environment, apply highest
standards of excellence to the purchasing roasting and fresh delivering of
coffee and inspire human spirit.
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Long-term Goals:
A goal of Starbucks is to build 1,500 new stores in China, combined with
continued financial discipline and productivity improvements.
Starbucks want a long-term growth goal including an increase in its store
with a target of 40,000 locations.
Objectives:
In china people drinking a lot of tea, that is why Starbucks want to
introduce Teavana. In this way Starbucks has a new innovation for the
company. Starbucks want to commit and invest for the long-term.
Strategies:
A business strategy of Starbucks is to build new stores, foodservice,
branded products and other initiatives. Starbucks want to do it with
support of business partners, licensee and partnership relationships,
especially in the international markets. Another strategy is expanding the
retail business to increase the market share in a disciplined way by
opening extra stores in a new and existing market.
Working together with key partners, for example, local farmers, Tazo (tea
package), stakeholders and franchise holders.

The business model and the link with the companys

current strategies.
Above picture show the canvas business model. The canvas business
model is divided in different parts; infrastructure, offering, customers,
finances. The first part is the infrastructure, which explains the key
activities, key resources and key partners. Second part of the business
model is offering, which displays the value proposition. Third part of the
business model is customers and this displays the customer segments,
customer relationships and channels. The last part of the business model
is finances and this displays the revenue streams and costs.
Starbucks has many key partners and they are essential for their success.
The key partners of Starbucks are the local farmers, Tazo Tea Package, US
food service, Stakeholders, Franchise holders, Licensed partners like Pepsi,
Unilever and dreyer, Conservation international and Costo supermarket.
Second part of infrastructure is the key resources of Starbucks. Starbucks
has many physical resources like materials, financing, property and assets.
Starbucks is always growing and expanding on new markets and new
continents. This is made possible by their assets and their money. This is in
line with their strategy to expand and keep growing under financial
healthy circumstances.
Third part of the infrastructure is key activities. Key activities are the core
businesses for a company. Starbucks does a lot of marketing and branding.
Part of their strategy is to be known all over the world and with this
strategy they have developed a very strong brand. Starbucks does a lot of
marketing activities on different levels. They use television, internet,
newspapers and a lot of social media. They also do a lot of personal
marketing, for example they always ask your name when you order a
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coffee so it will be remembered and other people can see the brand on the
cup in your hand. Another important key activity is the supply chain
management. This means Starbucks is always trying to deliver their own
products to retail stores in a very efficient way. This means faster delivery,
more delivery and cheaper delivery and a decrease in costs.
The second part of the business model is offering, which displays the Value
proposition. This is very important for Starbucks. One of the main goals is
to create a unique experience for customers in their stores. With this
experience they create a very strong brand and therefore customers will
return and are willing to pay premium prices for their coffee.
the third part of the business model is customers, and displays the
customers, channels and customer relationships. The customers of
Starbucks are business people and traveling people. Starbucks aims at
business people who are traveling from home to work. The other target
group are the travelling people. Starbucks is located on busy areas like
train stations and streets in the city centers.
Second part of customers is channels. Starbucks uses different channels to
reach their customers. These channels are social media, digital distribution
channels and retail stores. With social media starbucks can reach lots of
people. Other digital distribution channels are internet and websites. With
retail stores Starbucks tries to reach other people who normally dont
come to the coffee shops.
Third part of customers is customer relationships. Starbucks uses a loyalty
program for customers to come back. With this program regular customers
can collect points and with this points they can get discounts of free
products. Personal attention is also very important for customers. With
the personal attention the customers of starbucks are getting a unique
experience.
The last part of the business model is finance and displays the revenue
streams and the cost streams. The revenue can be found on the income
statement. The revenue of Starbucks is increasing every year and this is
important for expanding the company. They make profit every year and
are financial healthy. The costs of starbucks are also increasing every year.
But this is normal because of the increase of revenue and the costs of
expanding and growing

3. Starbucks resources and capabilities

Starbucks has four main strategic capabilities. First, the strong brand
name. This strategic capabilities creates competitive advantages because
everyone wants to be seen with a cup of coffee of Starbucks. The resource
needed for this capability are the stores where the customers can buy the
products. The competence needed for this capability is well marketing,
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where for example the idea of Starbucks gives you status in China is
implemented in the minds of the customers.
Secondly, Starbucks has a high profit margin. This is because they are not
depending on coffee bean farmers but they grown the beans their selves.
This makes the costs of sales low, while Starbucks is selling their coffee for
a higher price then their competitors. The resources needed for this
capability would be money, to invest in the land and employees needed
for this production. The competence for this capability is that it is
necessary to be able to sell experience. Why would people buy such
expensive coffee? Because of the experience they get when buying and
drinking Starbucks. This capability could create competitive advantage but
also disadvantage. As long as people want to pay a higher price to
experience Starbucks it will be a competitive advantage. But when people
become more keen on cheaper coffee, the high price could become a
competitive disadvantage.
Thirdly, Starbucks is able to do research and develop. This strategic
capability creates competitive advantage because Starbucks is able to
constantly innovate because of their strong recourse: money. The
competence needed for this capability is to be able to actually identify the
trends. Starbucks has already proved they can. Nowadays the trend is to
eat and drink healthy, which is why Starbucks bought a tea and juice
company.
Fourthly, guest satisfaction which is highly important for companies. With
a high guest satisfaction the company is able to maintain a customers
base. The resource of guest satisfaction is employees. The employees of
Starbucks have different tasks to keep the guest satisfaction high. These
tasks are important to be done properly with high quality like making the
products excellent and keeping the customers happy with small waiting
time. For Starbucks it is in their advance to have satisfied employees
working at Starbucks. This can be done with HR policies. These polices
describe how employees can be satisfied in their work environment. Thus,
when the employees of Starbucks are satisfied with their work this will
show of in the performance of the employees. The employees are more
motivated and more willing to work for a high guest satisfaction. This will
lead to a competitive advantage, in a way that customers will more easily
come back to Starbucks and talk to other potential customers about the
experience at Starbucks.

Internal Factor Evaluation

Key Internal Factors

Weigh Ratin
t
g

Weighted
Score

Strengths
1.

High brand equity

0.20

0.80
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2.
Aims in delivering excellent
service/ Experience

0.18

0.72

3.

Keeps innovating

0.10

0.30

4.

High employee satisfaction

0.12

1.
Self-Cannibalization through
overcrowding

0.20

0.40

2.
Some products do not fit in the
concept

0.08

0.08

3.

0.12

0.36

Weakness

Total

Overdependence US market

0.24
2.90

Rating 1 = Major weakness Rating 3 = Minor strengths

Rating 2 = Minor weaknessRating 4 = Major strengths

Scores significantly above 2.5 indicate a strong internal position,

which is the case for Starbucks.

Strengths
1. High brand equity
Starbucks is worldwide present in more than 60 countries. 36.7% of their
market share is in the United States represented. The company brand is a
strong market position, and their brand is recognition al over the world.
Starbucks is the largest coffeehouse chain in the world. The position of the
brand is the main reason for costumers to visit the organization. Achieving
the satisfaction of a good status is one of the most important aspects by
costumers of Starbucks.
2. Aims in delivering excellent service/ Experience
The service of Starbucks is al about experience. Customers come back to
the coffee corners because they know the quality remains good and the
service is excellent. The little extra touch of deliver the names of the
customers on the cup is an excellent way of providing personal service.
Customer based loyalty is one of the head goals of Starbucks.
3. Keeps innovation
Being an leader on the coffee market requires a good approach. One of the
drivers for innovation is the Research and development department.
They provide new ideas for the company, and identifying trends. Such as
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the Tea & Juicy industry. Starbucks did bough the tea company Teavana
to reach an wider target group. One of the next steps provide the demand
of healthy juices by buying and recognized juicy company.
4. High employee satisfaction
Starbucks is well known about their high knowledge base employees. They
are provided with great benefits, such as an healthy culture and retirement
accounts. This great treatment of employees translates into great
customer services. Starbucks is also rated in the list of 100 best
companies to work for according to the list of 2014 (Placed 98ste).

Weaknesses
1.Self-Cannibalization through overcrowding
The long-term growth decreased targets of Starbucks. This especially is
happening in the United States where Starbucks operates with 8078
stores. Almost on every corner of the street a Starbucks shop can be
found. The company is making themselves an competitor of their own
company. In some kind of situation the Starbuck company and main street
is doing great business, but the Starbucks two blocks away is loosing
customers. These costumers choose to go to the Starbucks on main street.
Especially in the United states a lot of stores close, one after another. This
is an weakness for the company, but the company is already putting effort
in this problem. This is way the rating consist of the number 2.
2.Starbucks sells products via third- parties that do not fit in the
Starbucks concept.
Starbucks tries to expend their market with selling their products in
supermarkets, trains and during flights. But there is a downside of this
kind of service. The downside is a lower quality of the products. For
example in trains the quality of the coffee can not been guaranteed. The
reason for this is the use of coffee powder with hot water to provide an
Starbucks coffee. Thus, this product is not made the same way as the
coffee within the shops. The Starbucks products in the supermarket are
long lasting products, these products are not freshly made at the spot as in
the Starbucks shops. This means that Starbucks needs to add some Enumbers and/or extra ingredients to make the coffee longer lasting. All
these examples of third-parties who offering Starbucks coffee could be an
disadvantage for the business. Their strength of delivering excellent
service, experience and quality is in this case not true. To bring attention
to this issue would be not and bad idea.
3.Overdependence in the United States market
Starbucks expand to other parts of the world to develop their brand,
awareness of the to much dependency of the US market and to increase
their profit marge. This has no impact on their competitors liabilities,
expanding to another part of the world can be a strength for the company.
In the other hand, overdependences in the U.S. market what is already
said in step 1, is definitely an impact on their competitors liabilities.
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Sources
Farfan, B. Starbucks Mission Statement- Inspiration and Connection One Cup At a Time.
Retrieved 21/09/2014 from http://retailindustry.about.com/od/retailbestpractices/ig/CompanyMission-Statements/Starbucks-Coffee-Mission-Statement.htm

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