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Starbucks Administration Strategic Suggestion Essay

2296 words - 9 pages

When we make reference to weak points, it may be evaluated that Starbuck’s has affordable prices in supermarkets and also the truth that it only focuses on people more than 35 years old. Additionally, when the organization was established, the proprietors were living with the idea that they are the only people who can prepare fantastic coffee. As per Datamonitor (2011), Starbucks has been involved in different court proceedings, which taken overall provide a poor compliance function. For that reason in 2004, 2 of the company’s workers filled a lawsuit versus Starbucks telling that the organization moved into contradiction with the requirements of Fair Labor Standards Act or FLSA. While in October 2004, one more worker filled a lawsuit versus the organization proclaiming that Starbucks breached California’s Labor Code when it permitted shift administrators to get tips. One more similar case took place one year later on, in 2005, when a worker filled a lawsuit versus the organization by proclaiming that Starbucks breached FLSA requirements. A number of these happenings occurred inside Starbucks that denotes the truth that this is a company’s weakness. One more weak point to be pointed out is that the organization is marketing products in the following percentage: 77% drinks, 15% food items, 3% bean coffee, and 5% equipments as well as devices for making coffee. This is a weak point since an organization must not only count on one item since it might be adversely impacted when the buyers cease or decrease purchasing that item. One more weak point is that the workers of the organization have got a lower output and as Datamonitor (2011) describes “Starbucks’ income per worker was $53,408 in 2006 as compared with an industry average of $93,330 per worker”, which is substantially low. (p. 6)

When we go on with the SWOT assessment, Starbucks must be capable in order to find possibilities in untouched markets because it opened up many outlets in several countries from 2005 till 2010. One more possibility was the creation of a new record label with Concord Music Group named Hear Music. This occurs in 2007 when Hear Music label makes a direct connection with artist as well as distribute recording at Starbucks places. Additionally, the development of unique coffee market that required creating premium-price coffees is viewed as a chance for Starbucks.

Finally, in evaluating dangers, it may be stated that Starbucks has many strong rivals in the coffee industry, for example other unique coffee houses, doughnuts shops, as well as cafes. Unstable coffee market is considered as a threat since coffee is Starbucks’ largest input cost, comprising 10%-20% of the cost of goods sold. Possibly, among the most significant threats for Starbucks’ is the Forbidden City dispute that is concerning the fact that a store from Forbidden City of Beijing is in clash with the rich Chinese tradition of the city. Protest which are against Starbucks’ having a place in this area...

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