Environmental Consciousness of Starbucks: Analysis

Starbucks Corporation is a well-established retailer of specialty coffees, primarily selling fresh, rich brewed coffees, Italian style espresso beverages, pastries and confections, coffee related accessories and equipment, and a line of premium teas. Products are sold through company operated retail stores, specialty operations, and an online store. Operating primarily in the United States, Starbucks is headquartered in Seattle, Washington and until recently employed 172,000 individuals (Data Monitor, 2008a).

Starbucks is positioned in what Data Monitor (2008b) characterizes as the domestic hot drinks market although it also retails a variety of products and accessories that are not directly related to this market segment. Data Monitor (2008b) reported that the hot drinks market in the United States grew by 0.6 percent in 2007, reaching a value of $9,120.5 million. It is expected that by 2012, the domestic market will have a vale of $9,711.4 million, up 6.5 percent over 2007.

The purpose of this analysis is to examine the environment in which Starbucks functions, including the social, cultural, political, technological, and demographic aspects that impact upon the company. Next, a competitive analysis of Starbucks from a microeconomic perspective will be presented, followed by a summary of the organization's current situation and the identification of three to four strategic long-term objectives that should be integrated into a companywide strategic plan.

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witching costs attract newcomers. Substitutes in the form of soft drinks are not a significant threat to the hot drinks market. The market has extended from urban areas into suburban areas and is now being taken up by non-specialist competitors. Buyer power is weakened because consumers are likely to be strongly influenced by brands. Data Monitor (2008b) described Starbucks' financials. In 2007, Starbucks' revenues totaled $9,411.5 million. Net income for that year was $672.6 million with a profit margin of 7.1 percent, total assets of $5,343.9 million and total liabilities of $3,059.8 million. Starbucks has a strong brand image, a wide geographic presence, and until recently, robust financial performance. However, Starbucks' financial performance is highly dependent on its U.S. operating segment. As of the third quarter of 2008, Starbucks recorded a decline in operating and net profit. The higher cost of sales coupled with declining consumer traffic in U.S. stores led the firm to lay off a number of employees and close a substantial number of underperforming stores- about 500 in the U.S. alone; partially responsible for this retrenchment was a recessionary domestic economy (Dransfield, 2008). Stores have also been c

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