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Environmental Scanning
MGT 498
May 22, 2017
Patricia Dues
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Environmental Scanning
Introduction
Starbucks is a well-known coffee shop throughout the United States and abroad. They
have been successful throughout the changes the world has seen over the last 30 plus years.
Environmental scanning is what organizations used to monitor internal and external
environments to identify opportunities and threats that may influence objectives and plans. The
environmental scan can be used to create a strategy that outlines value and the competitive
advantages. Having a measurable way to gauge strategic effectiveness helps the Starbucks to
ensure they are going down the right path for the future.
Internal and External Environments
Starbucks internal environment consists of where their coffee beans are farmed, the
accessibility, as well as its own roasting plants they build. If Starbucks has to find new beans for
some reason, the location could potentially cost more money, or the beans could be of lesser
quality.
Another internal environment is its employees. “Starbucks has always had a social
consciousness, as opposed to other multinational companies. A proof of this can be seen in how
well it treats its employees,” according to “Starbucks is Maintaining its Competitive Advantage”
(2016, para. 4). Starbucks started a new initiative where they are supporting economic
development in low to medium income communities in America to help with jobs that will aid
the lower income areas.
Starbucks has a few external environments, one of which is social ways of life. People
want to enjoy their sinfully delicious coffees and teas but want the option of being “healthy” at
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the same time. Starbucks has answered this call with different alternatives for dairy to help
people be healthy while still enjoying their favorite Starbucks beverage.
Another external environment is seasonal drinks. Life is much more enjoyable when
Thanksgiving is here, and you know you can enjoy a special limited time offer of a Pumpkin
latte that only comes this time of the year!
Competitive Advantage
Starbucks isn’t just relying on their coffee to keep a competitive advantage.
Mourdoukoutas (2013) stated, “good coffee, quality service, and a nice environment to hang
around” (para. 2) is a competitive advantage. Starbucks prides themselves on their customer
service. “We have to get back to what has made this company great,” Jackson stated (2008), he
was referring to the in-store customer service experience. Starbucks opened several new stores,
got too big too fast, and lost sight of its customer service for a while. They had to put the
customer service back in the forefront of their vision and get back in control of their advantage
they once had.
A second advantage, as mentioned before, is healthier eating. Starbucks did move to
offering alternatives to dairy, such as almond milk and soy milk, which keeps them heads above
their competitors ("Almondmilk Is Coming to U.S. Starbucks Stores", 2016). According to
“Starbucks is Maintaining its Competitive Advantage,” when other restaurants felt a pinch in
sales, Starbucks did not (2016, para. 1). Instead, they saw an increase in sales.
LYet another way to stay competitive, Starbucks is innovative with their seasonal drinks.
Everyone loves a drink designed for a special occasion. As mentioned previously, at
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Thanksgiving, Starbucks has the pumpkin latte or teas. They also offer peppermint drinks and
other specialty drinks at Christmas time, as well. While their competitors are trying to create
their own brand of specialty drinks, Starbucks is the most successful at it.
Strategies to Create Value and Gain Competitive Advantage
Because people’s taste changes, Starbucks changes with the tastes to remain competitive.
Having the ability to be flexible and open to changes keeps their customers coming back, as well
as new customers coming in. This is how they maintained the competitive advantage with the
almond milk. Starbucks actually created their “own almondmilk recipe to complement our hot,
iced, and Frappuccino blended beverages,” said "Almondmilk Is Coming to U.S. Starbucks
Stores"(2016).
Measurement Guidelines of Strategic Effectiveness
SWOT analysis is a way to measure the effectiveness of Starbucks strategy. Some key
business contrasts are brand loyalty, outstanding service, atmosphere, and a quality beverage. A
balanced scorecard helps to measure the performance of the company and helps decision makers
gather information needed to adjust strategic plans.
Effectiveness of Measurement Guidelines
“Starbucks is a performance driven organization through the lens of humanity. That’s
what I’ve imprinted on the entire organization over the last 2years” wrote, “Starbucks Details
Five-Year Plan to Accelerate Profitable Growth at Investor Conference” (2014, para. 4). In 2007,
Starbucks stock was at $7.17 per share. In December 2014, Starbucks share was up to $80 per
share. This shows that Starbucks’ measurement guidelines are leading them down a successful
path.
Conclusion
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Using an environmental scan to determine the opportunities and threats of a company,
looking at their internal and external environments, as well as the competitive advantage and
how Starbucks can create more value through competitive advantage, strategic effectiveness
measures and the guidelines of those measurements will ensure that Starbucks is on the path to a
successful future when some other companies are not as fortunate.
References
Almondmilk is coming to u.s. starbucks stores. (2016). Retrieved from
https://news.starbucks.com/news/almondmilk-coming-to-starbucks-stores
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https://www.forbes.com/sites/greatspeculations/2016/10/13/how-is-starbucks-maintaining-its-
competitive-edge/#5b6139f3759c
Mourdoukoutas, P. (2013). Starbucks and mcdonald's winning strategy. Retrieved from
https://www.forbes.com/sites/panosmourdoukoutas/2013/04/25/starbucks-and-
mcdonalds-winning-strategy/#5b32a506adb5
Starbucks details five-year plan to accelerate profitable growth at investor
conference. (2014). Retrieved from https://news.starbucks.com/news/live-blog-starbucks-
path-for-growth-outlined-at-2014-biennial-investor-day
Stuart E. Jackson , (2008) "Making growth make sense for retail and franchise
businesses", Journal of Business Strategy, Vol. 29 Issue: 3, pp.48-50, doi:
10.1108/02756660810873227
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