Internal Environmental Scan/Organizational Assessment

Kenawa E. Jigba

Module 5 Assignment 1

B6028 Solutions to Organizational Challenges: A Capstone Experience

Argosy University

Instructor: Dr. Andrea Banto

Due July 31, 2013

Starbucks Internal Environmental Scan/Organizational Assessment

Introduction

Internal environmental scan, also referred as organizational assessment is whereby companies and organizations take a step back to reflect on, as well as look at the various regions of the company or organization, in regards to what is currently working or what could be different (Aaker & Joachimsthaler, 2000). It is important to carry out an organizational assessment as it helps create an objective perspective of a company’s or organization’s present reality according to its work flow processes, organizational structure, board development among others (Keller, 2001).

The environment of any given organization is inclusive of both external and internal factors. It is therefore important for organization management to regularly scan the environment so that they can determine development as well as forecasts of factors that would possibly influence organizational success (Kim & Kang, 2001). Environmental scanning must be in a position of identifying various threats as well as opportunities that exist in the environment.

Starbuck’s Mission, Vision and Values

Starbucks Corporation is considered to be one of the largest retail coffee companies in the world. From what has been observed in the past, the mission, vision and values statement of companies tend to be different in that they distinctively define their culture, brand and customer experience (Aaker & Joachimsthaler, 2000). Each of these factors is as different as the companies themselves. Similar to any other company, Starbucks possesses a mission, vision and organizational values. The company’s mission and vision statement is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Keller, 2001). A value proposition refers to a marketing or business statement that usually gives a summary of reasons why customers should buy a product or use a particular service (Kim & Kang, 2001). For Starbucks, customers should buy their product as it is of the highest quality and has originality. No other company has so far matched Starbuck’s quality standards in as far as coffee is concerned. The Company’s long-term goal is becoming the world’s most recognized and respected brand of coffee (Aaker & Joachimsthaler, 2000). It has so far firmly established itself as a leader in the area, having an estimated 1,000 locations in more than 30 markets. Starbuck also has a competitive advantage in that it is able to offer innovative products as well as services using espresso bar set up in its retail shops (Keller, 2001). It is also currently able to utilize different techniques in providing superior products in addition to customer service.

Strategy Clarification

As is the case with any given company or organization, there are certain unwritten rules and shared values that tend to govern the behaviors in the company or organization. Starbucks is no different. The company acts as enablers to the strategy since it consists of a diverse population of employees who hail from different cultural and ethnic backgrounds.

Starbucks Company has a strategic way of locating the youths because normally it is positioned in or near colleges where students meet to socialize with each other or write term papers. With respect to adults, Starbucks’ main audience includes women and men that are older and whose age frame range between 26-41. In addition, 49% of the company’s total supply goes to adult consumers. The company on the other hand tries its best to appeal to this class of customers through adverts and a kind of contemporary design that best works at attracting the older customers.

Cultural Assessment

Considering the fact that it has branches all over the world, Starbucks Company possesses a cultural information sharing and collaboration that allows it to respond quickly across structural boundaries to solve problems for its customers. Thanks to the Internet and other technological advancements, Starbucks can comfortably trust its designated staff in various parts of the world to communicate and share information regarding customer preferences, tastes, concerns as well as current trends in the ever changing business environment (Kim & Kang, 2001).

The Starbucks culture has also infiltrated almost every part of American society as the most successful coffee chain in the nation. Informal mechanisms such as letters tend to be rather slow and communication between the company staff and their customers takes longer than usual. Therefore, structural behavior has allowed the corporation to have successful communication upward, downward, and laterally with its employees.

Value Chain Analysis

In Starbucks Company, there are a few direct and indirect activities that bring about and also deliver their product to their customers. Some of the direct or primary activities that the company involves itself with are marketing and sales, service, inbound logistics and operations (Aaker & Joachimsthaler, 2000). The indirect or support activities that it deals with are Human Resource Management (HRM), technological development, infrastructure and procurement (Keller, 2001). By understanding how the company brings about value as well as looking for ways to add more value, Starbucks has grown to learn how to develop a competitive strategy. While primary activities directly deal with the physical creation, sale, maintenance and support of a particular product, support activities generally support the primary functions (Kim & Kang, 2001). Currently, there is an area where the business may be at a competitive disadvantage. Starbucks is experiencing competition from upcoming businesses that are taking the risk of venturing into the same product.

Summary of Findings

From what has been discussed above, Starbucks is still the largest coffee chain in the world. It has a few strengths as well as weaknesses that have made it what it is today. Some of its strengths include the fact that it still has the capability of capturing potential customers through its innovativeness and uniqueness. The company has also gained positive reputation which it has maintained until now. No matter where one is across the globe, they are sure to enjoy quality coffee from Starbucks. Apart from these strengths, certain weaknesses are also present within the company. One of these weaknesses is that following recent modifications to the organizational structure of the company, Starbucks may experience financial declines. Additionally, expansion of the company means the need for more human resource to function. The Company may not have enough funds to sponsor more human resource. Due to the current competition in this particular field, customers want to differentiate between Starbucks and other vendors. If the company does not seriously consider such weaknesses, it may find itself at a competitive disadvantage where its hard earned reputation will be ruined.

References

Aaker, D.A., & Joachimsthaler, E. (2000). The Brand Relationship Spectrum: The Key to the Brand Architecture Challenge. California Management Review, 42(2). Pp. 8 – 23.

Keller, K.L. (2001). Building Customer-Based Brand Equity. Marketing Management, 1092). Pp. 14 – 19.

Kim, Y.K., & Kang, J. (2001). The Effect of Ethnicity and Product on Purchase Decision Making. Journal of Advertising Research, 41(2). Pp. 39 – 48.