Environmental Scan of Starbuck

Environmental Scan of Starbuck

The environmental scanning is the function of strategic management which analyzes the external functioning that directly affects the organization. The Environmental scanning is to scan the changes that are occurring in the environment and in order to monitor and identify those changes which include the new trends that result in causing the effect over the organization. Additionally, the environmental scanning with internal organization analysis include strengths, weaknesses, vision and mission that can further assist management the formulation of the strategic plans in order to gain control which may have significant affect. The Coffee shop Starbuck is the one which is dependent upon the leader's and employee's ability to adapt the rapid transformation to the external environment (Kooning. Karin, 2008).

The key contribution of workforce in the process of planning at Starbucks is conducting the environmental scanning. This scanning helps Starbuck business planning for the coming three to four years. The overreaching goal of the environmental scanning at Starbuck is the identification of the work force gaps and the prioritization of the actions which will ensure the meets of the organization talent needs.

Starbucks faces many of the environmental threats that create alarming pomp ups to the company. Few of the major threats Starbucks need to cater with are;

Starbuck produces only coffee which cannot be helpful for the company's survival in the long run. The other competitors like Tim Horton have extended their product extensions and has started other stuff to attract their customers. Starbuck is even exposed in rise of high cost in coffee and dairy products.

Preferences in society could change over time and substitute coffee with other beverages. The prices for coffee beans could increase. Another threat is that many companies try to copy Starbucks coffee shop experience and offer coffee for lower prices.

Non coffee related business such as ice-cream, liqueur, tea and so forth can potentially result in lots of brand identity and core business value- that is coffee.

Competition from local coffee outlet such as coffee bean will result in declining sales and eventually profitability.

Starbucks coffee can be imitated by its competitor as the coffee not significantly differentiated products.

Increase in raw materials such as coffee, sugar, creamer or tea will result increase in production cost and decline in net revenue.

Although the number of outlet opens and net revenue increase from 2000 to 2005, however the quantum of new outlet and net revenue is decline. This indicates that number of new outlet open have a positive relationship with increase net revenue.

When the economic climate is not well encouraging, people reduce buying a luxury or premium products. This explains in 2000 US economic recession (credit crunch) although number of new outlet increase, the net revenue remain unchanged at 29% in 2000 as compare to 1999. In addition Net earning reduce to 6% suggest increase in operating expenses.

Changes in import law in respect of importing coffee bean from other countries. This may jeopardize Starbucks business operation.

Apart from catering with major threats to the company, ...