Executive Summary

The following report aims to critically review the current strategic opportunities available to the Waterstones book chain when it comes to digital transformation. These opportunities arise as a result of various political, economic, social, technological, environmental, and legal factors present within the United Kingdom’s business environment.

With the recent outbreak of the Coronavirus Pandemic, firms are trying to shift to online operations readily.And the firms already having most of their operations online, are looking to capitalize on the opportunities that are present on the digital front. This report not only just reviews these factors, but it will also try to provide strategies on how to make use of these opportunities.

The incorporation of technology, or digitalization, of all business processes, is known as Digital Transformation. It is a structural change that completely changes how a business operates and delivers values to its customers.

Furthermore, some internal and external factors are at play. This report aims to analyze those factors thoroughly and looks to provide strategic solutions on how to counter or make use of such factors.

Lastly, one of the main focus of this report is to identify a new strategic aspect that the Waterstone book chain is yet to discover and capitalize on that before any competitor firm cashes in on that.

Digital Transformation

The digitalization of a business is known as Digital Transformation. Digital Transformation changes how a business conducts its operations and creates value for its customers. Apart from an operational change, a business that introduces digital transformation has to go through a complete cultural reboot. In recent times, the emphasis on e-commerce and the digitalization of businesses has grown a lot. Businesses have started to introduce digital transformation in different areas.

Every firm has a different sort of digital transformation based on its particular business conditions and demographics. However, there are a few common elements that all digitally transformed firms have. Firms having incorporated digital transformation are more customer-centric than other firms. Their idea is to enhance and enrich the customer experience at each touchpoint. A digitally transformed firm is very smooth and agile when it comes to operations. One of the main benefits and motivations for digital transformation is the fact that it enhances operational efficiency.

Lastly, as mentioned earlier, digital transformation means a change of culture. Digital Transformation is not about introducing the latest technologies. Instead, it is more about embracing change and leaving the old practices behind.

With developments made over the last decade, digital transformation is the way to go forward. It will be crucial to any business’s success.

Current Factors

Over the last decade, the world has increasingly been shifting to online businesses. The customers are satisfied with placing their orders online and paying through online channels. Items that can only be used physically are delivered at doorsteps. In contrast, the items that can be used in softcopies are simply being stored in the customers’ computers—for example, books and journals. With the outbreak of the COVID-19 in recent months, social distancing has become mandatory. Going out of the house is considered hazardous and dangerous. With all these circumstances, digital transformation has become even more critical. When it comes to Waterstones, it has been open to digitalization. And hence it seems to be in a pole position to capitalize on the current market conditions.

Politically, the UK government’s policies regarding the use of the internet for conducting online businesses have been somewhat flexible. Through various studies, the government has discovered the growing influence of digital services on multiple age groups across the country, which allows Waterstones, a healthy space online.

The UK has had a rather stable economy over the last decade, and this crucial factor allows Waterstones to introduce digitalization throughout its supply chain. And with the support of government policies, Waterstone can easily benefit through such measures.

Socially, the general direction of the whole world, and now especially with the Coronavirus, the preference has shifted mainly to online purchasing. Since Waterstones mainly sells books, it is a massive opportunity for it to go online.(Pînzaru, Zbuchea and Viţelar, 2019)

The concept of E-Books has become dominant because all the books can now be stored on a computer. This concept saves a lot of time that a consumer takes to make a physical purchase; it saves the space that hardcopies occupy. And for students, it saves the burden of physically carrying multiple books. (Pînzaru, Zbuchea and Viţelar, 2019)

And adhering to the guidelines laid out by the governments around to combat the Coronavirus, E-Books and softcopies comply with social distancing as well.

Although Waterstones is technically well equipped, with the current situation in light of the COVID-19, there will mostly be a sharp increase in the demand for E-Books and softcopies. Hence, Waterstones could benefit from more investment in Cloud or Artificial Intelligence. Technologically, it is an excellent time for Waterstones to expand digitally and adapt to digital transformation.

Through selling books and other related items online, Waterstones can significantly reduce its environmental footprint. For books, the first and foremost thing is paper, through hardcopies the manufacturers of books is directly linked to deforestation and hence leaves a critical environmental footprint. Furthermore, the transportation of raw materials and the deliveries of hard copies of books leads to large amounts of fuel emissions resulting in severe air pollution. Indulging in such practices can seriously taint Waterstones’ brand image. Environment preservation has continued to become quite essential in recent years, and customers prefer to opt for brands who are contributing to the environment. By emphasizing more on online operations, Waterstones can make a crucial contribution to the environment and reduce its environmental footprint to a great extent.(Shaughnessy, 2018)

On the legal front, the UK government, as discussed earlier, has been somewhat flexible and supportive with online businesses. And since most of the regulations and legal issues are related to the environment, conducting business online is considerably safer in that regard.

Implementation of Strategies

The recent shift towards technology and consumer preference of buying online, combined with the business atmosphere in the UK have presented Waterstones with a bunch of opportunities that it can use. (Berman, 2012)

Waterstones can look to increase investment on its online platforms. Since the government is supportive of such ventures, there is minimal risk of any political invention in Waterstones’ online operations. Having supportive government policies can also help Waterstones in expanding abroad. Since the business is online, Waterstones doesn’t have to have a physical outlet in overseas countries. The buyers from abroad can simply connect with Waterstones on its online platform and purchase E-Books and softcopies. (Matt, Hess and Benlian, 2015)

Apart from that, the UK’s stable economy means that the general business conditions are right, and firms are having a good time conducting business. Waterstones can use this opportunity to invest in digital transformation throughout its supply chain. With each touchpoint of the supply chain introduced to digital transformation, Waterstones can drastically increase its operational efficiency. The firm policy, inflation, and unemployment rates also mean that it will be more comfortable for Waterstones to expand through obtaining cheaper loans. Moreover, such stable conditions indicate that the customers will also have enough buying power to shop online in an instant without thinking twice.

Socially, with the COVID-19 situation, the growing awareness of the general population about using digital services makes it an excellent opportunity to go digital. Waterstones can develop its smartphone app that is accessible for almost everyone. This concept makes for a unique consumer experience since each user is carrying their virtual library in their pockets. The app is a quite convenient option since everyone has a smartphone in this day and age. Waterstones can earn a lot of revenue through its app downloads and then the in-app purchases.

Furthermore, through digital transformation, Waterstones has a massive opportunity to collaborate with online giants like eBay, Amazon, and Alibaba. With its books being displayed on their platforms, Waterstones can dramatically increase its market size. Moving on, Waterstones can partner with Universities and research centres and provide special discounts to the university’s students and the members of the research centre on their E-Books. This strategy will increase Waterstones’ customers base and help it to make a long-lasting mark. Lastly, one of the best strategies the Waterstones can implement is to partner with Schools, Colleges, Universities, and NGOs. Waterstones can provide digital library services to Universities and research centres. And with the increasing shift towards technologies, students prefer carrying their course materials on their computers rather than

coursebooks to the students through their digital application. This strategy will solve the students’ burden of physically carrying books while also providing the schools with a one-stop solution for coursebook provision across all levels of the school. All of this will do wonders for Waterstones’ brand positioning and market share.

By digital transformation and automation, Waterstones automatically becomes environment friendly. And with the increasing shift towards environmental sustainability, a brand that is contributing to environmental preservation outshines others. By merely conducting its operations online, Waterstones can attract a cumbersome amount of customers, which will increase its sales, brand reputation, and successful performance.

Challenges associated with Digital Transformation

One of the main challenges faced while shifting online and using digital transformation is that it is particularly hard to gauge consumer sentiment. In the business atmosphere today, customer experience matters the most. For an online business, it is harder to gauge customer experience. An unsatisfied customer may simply stop purchasing from your online store. (Schwertner, 2017)

The results of resistance to change, show themselves in a plethora of ways. Advanced ventures crucial to an organization’s going-concern can experience difficulty in getting subsidies, resources, or advertisements. These ventures might be changed so as not to compromise retail or accomplice brands. They are kept down by worries about tearing apart other income sources. They are approached to legitimize ROI to an unusual degree of conviction. They are sent through interminable lawful audits.

Kodak envisioned the automated camera, yet it was the inside assurance from a change that drove the association to cover it since it subverted the association’s legacy film business. Did mobile phones beat the landline business? The truth is out. Regardless, Bell Atlantic “guaranteed” itself by enduring that change was not very far away, and changed by choosing the irksome decisions required to conform to that change.

Another challenge that a company faces when adapting to digital transformation is the risk of employee pushbacks. The introduction of technology across the whole business might severely demotivate the existing workforce. With technology comes a massive threat of layoffs for the current employees. This threat brings the morale and productivity of the employees down drastically. There is a massive skill gap between those employees who know how to operate technology and those who don’t. The gap means that the skilled workforce already has hands full and hence, don’t have the time to train the old employees. (Digital Transformation- The Internet of Things- Opportunities and Challenges, 2020)

One of the most crucial challenges faced by companies operating online is the problem of substandard analytics. Whenever a customer visits an online store, they like personalization. They like to be shown what they’ve been buying or products of a similar nature. Substandard analytics ruin the customer experience, having the potential to convert profits into losses. (Digital Transformation- The Internet of Things- Opportunities and Challenges, 2020)

Associations that adequately “cross the void” to modernized reasonability consistently discover they need to oblige free what they used to charge for, sell as participation what used to be “independently.” Adapt through publicizing things that used to be paid for in various habits, and reconsider how they get pay from the value that they make. Those that do so deftly can every now and again find that the gathering of an electronic procedure offers more scale, pay, and advantage than the legacy approach. However, it takes experimentation, a notion of danger, and – to be uncaring – some mistake on the way. In spite of the fact that this approach is comprehensively recognized among new organizations, it is one that the organization and money related masters being developed associations, generally, fear. Notwithstanding, this is the gauntlet they should race to gain electronic ground.

Overcoming Challenges

Challenges are there to be faced and overcome. Hence is why the challenges that are present with shifting majorly to digital transformation can be faced. Its a fact that with online businesses, it is nearly impossible to gauge customer sentiment. If the customer has a bad experience, they might silently go away without any conversation at all. To overcome this crucial challenge, Waterstones can make sure that it is not just trying to achieve a higher sales target. The focus should primarily be on customer experience. By improving and enhancing all the touchpoints throughout the customer experience, Waterstones can firmly place itself in the minds of the customers. It will also help in automatically boosting sales, and retaining customers, providing stability in future growth.

To counter the employee pushback issues, Waterstones needs to think out of the box. It can tackle this challenge by incorporating a customer-centric culture. The focus needs to be on the customer more than anything. When a company strives to provide the best experience to its customers, there is a cultural reboot from top to bottom, which ultimately leads to employee training and development. Such actions help in massively boosting the morale of the employees, and they try to produce the best results as a result. (Borate and Borate, 2014)

Waterstones might not be able to delete uncertainty and vulnerability from employees’ brains. However, you can positively reduce them. Being steady and straightforward is vital. Keep your workers connected through the entire procedure. Engage them and paint them a future they would all be able to move in a specific direction. By helping its workers comprehend what’s in question, you can positively motivate them.

The issue of substandard analytics can be resolved through investment in better AI systems. Through introducing high-quality Artificial Intelligence systems, Waterstones can dramatically increase its database and gather more data efficiently. Through a comprehensive database, personalization becomes very simple and easy. When the customers are provided with interface personalization, they are displayed content of their interest, which enhances the customer experience and satisfaction significantly. (Pichan, Lazarescu and Soh, 2015)



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Borate, N. and Borate, S., 2014. A Case Study Approach for Evaluation of Employee Training Effectiveness and Development Program. SSRN Electronic Journal.

Journal of Xidian University, 2020. Digital Transformation- The Internet of Things- Opportunities and Challenges. 14(4).

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Matt, C., Hess, T. and Benlian, A., 2015. Digital Transformation Strategies. Business & Information Systems Engineering, 57(5), pp.339-343.

Pichon, A., Lazarescu, M. and Soh, S., 2015. Cloud forensics: Technical challenges, solutions and comparative analysis. Digital Investigation, 13, pp.38-57.

Pînzaru, F., Zbuchea, A. and Viţelar, A., 2019. Digital transformation trends reshaping companies—proceedings of the International Conference on Business Excellence, 13(1), pp.635-646.

Pînzaru, F., Zbuchea, A. and Viţelar, A., 2019. Digital transformation trends reshaping companies—proceedings of the International Conference on Business Excellence, 13(1), pp.635-646.


Schwertner, K., 2017. DIGITAL TRANSFORMATION OF BUSINESS. Trakia Journal of Sciences, 17(Vol. 15, Suppl. 1), pp.388-393.

Shaughnessy, H., 2018. Creating digital transformation: strategies and steps. Strategy & Leadership, 46(2), pp.19-25.




            The strategic analysis of a company is one of the most fundamental and significant tools that can be utilized by the management of the organization in order to gain a better understanding of business operations and activities. It not only enables the managerial leadership of any organization,irrespective of the size and theextensively of its operations and market stature, to critically analyze the processes and practices integral to the company operations, but also allows the management to align such practices and activities with the organization goals and objectives.


                Founded in 1971, Starbucks has grown rapidly over the past few decades to become the leading American Coffee brand. Today, the company operates with a global network of 31,256 coffee shops (Starbucks, 2020). According to recent studies from Statista, the company turned in about 26.51 billion US dollars in revenue during the past year. Similarly, Starbucks also ranked as one of the most valuable fast food brands in the world in 2019, second only to McDonald’s with a value amounting up to 45.88 million dollars, beating out competitors like KFC, Dominos, Subway, Tim Hortons, Pizza Hut, and Burger King etc(Statista, 2019)


                This report will focus on the performance of Starbucks in the American market. Despite Starbucks being a global brand, a restricted scope is required to establish accurate results in this analysis, limiting the effect of transnational factors to the result.


                This report aims to analyze the strategic issues faced by Starbucks in its bid to become the leading coffee shop in the world. The report will highlight these key strategic issues through the application of tools like the pestle analysis and the five forces framework. An evaluation of the coffee shop industries critical success factors and the unique capabilities of Starbucks to suggest the best routes of action will also be taken. The SAFe factors will also be used to predict the success of the remedies to the issues highlighted.          

The purpose of this report is to analyze the strategic issues and problems faced by Starbucks in its bid to become the leading and most preferred coffee shop destination of customersall over the world. The report attempts to highlight the key strategic challenges through the application of different analysis tools like the Pestle and Five Forces frameworks. Founded in 1971, Starbucks has grown rapidly over the past few decades to become the leading American Coffee brand. Today,the company operates with a global network of 31,256 coffee shops. According to recent studies from Statista, the company turned in about 26.51 billion US dollars in revenue during the past year. Similarly, Starbucks also rankedas one of the most valuable fast food brands in the world in 2019, second only to McDonald’s with a value amounting up to 45.88 million dollars, beating out competitors like KFC, Dominos, Subway, Tim Hortons, Pizza Hut, and Burger King etc(Statista, 2019).

Strategic Issue

            The primary strategic issue at play here is that if the rapidly changing technological factors hold the capability to either boost or damage the growth and progress of the organization in the long run. The consumers are increasingly becoming aware of the latest technological trends and developments. The Starbucks management and leadership drafted and implemented a very rigorous expansion and growth strategy that has seen the small coffee shop business grow into one of the leading food and beverage brands in the world.

Political – Labor Cost Increase: The minimum Wage Strike

                The increased labor costs for fast food workers in the urban areas in the United States has affected Starbucks. Below the poverty line wages and poor working conditions for the Starbucks barista, also led them to participate in the call for better pay (Scheiber, 2020). The 2012 fast food strike in New York that led to over 100 fast food employees striking in the fight for a better minimum wage has led to the adoption of the $15 minimum wage in most of the United States (Harding, 2018).The new laws have granted workers the increased minimum wage in most urban areas , the same areas where there is most traffic in Starbucks stores.

            The success and prosperity of many businesses fundamentally depends on the utilization of the latest technological trends and advancements. Therefore, it is imperative for the management and leadership at Starbucks to ensure effective and efficient implementation of the latest technological developments in order to ensure that the company is able to achieve its organizational goals and strategic objectives in the long run(Lemus et al., 2015).

While this growth strategy has been widely successful and enabled the company to account for exceptional growth numbers, the rapid pace has also posed a range of problems and issues that threaten to derail business operations and activities if not addressed in an effective and efficient manner. One of such strategic issues that occupies critical importance for future of the organization is the challenge of implementation and adaption of latest technological developments.

Industry (political)

While the Starbucks management has made various attempts and drafted new policies in order to implement and integrate new and innovative technology into its business operations and practices, much can still be done. The latest advancements in the field of technology such as machine learning, big data, automation intelligence, and blockchain technology can be used by the company to ensure that the strategic challenges posed by changing technological factors are tackled in an effective and appropriate manner(Sokolowsky, 2019).

For this paper, one factor of the pestle analysis is chosen, it is political. Political factors that can play their role for the company are regional integration of markets, red tape of bureaucraticin developing regions, and improvement in the infrastructure support by government. This is external factors that offers opportunity to company to expand and present accessible content(Donner &Loh, 2019). The business expansion is different under political atmosphere. Due to government involvement, the current trend of expansion in infrastructure will be attained. Tax policy and employment laws in US can alter the business process.

Thepolitical factors that can impact Starbucks are also linked with the ongoing recession, profitability, and labor & operational costs increase. This will decrease profitability by causing inflationary environment to prevail. Starbucks in the far environment can have opportunities to gain from high growth of developing regions. Other economic opportunity can be declined level of unemployment rate, so it can bring in more revenues. But rising labor costs are economic threats for Starbucks, as it sources many of its beans from the developing regions(Donner &Loh, 2019).

The impact of political factors may also impact Starbucks as far environment are key challenges that are associated to expand the customer base. It will be a way to expand the lower and middle income people. For instance, ethical chic and green consumers and trends related to ethics, changed family patterns, preferences, work patterns, lifestyle and education are key social factors that can impact Starbucks.It canbe increased use of mobile phones, technology use, and innovation in products, agriculture development and development in biotechnology.

Internal- Rapid expansion

In some strategic environments, thebusiness process vary, for Starbucks, for instance, the product safety regulations, increased regulation of employment and genetically modified organisms’ regulations are impacted under political realm. These are prevailing far environment related factors that can change the scope of performance for Starbucks (Donner &Loh, 2019). Starbucks operates in food and beverage industry so this pestle analysis offers a presence of stability as far external environment. This analysis also means that consumers cannot stop consuming the product but they can reduce it.

The simple and effective model by Michael Porter elaborates about near environment of Industry and presents strategic issues with Starbucks. The competitive rivalry of company is a force that moves from moderate to high level. In the industry, due to monopolistic competition, the firms are operating in competition, where market share is high. The share is linked with McCafe and Dunkin. The differentiation is based on products and premium quality(Nguyen, 2017). For the strategic analysis of Starbucks, bargaining power of suppliers is discussed under Porter’s five forces.

Starbucks is facing low bargaining power of suppliers that moves to moderate level. The brand has focused on high supplier diversity that is linked with ethical sourcing. The coffee brand is focused to control the power of supply chain by removing mediators. It is because of individual purchase, which is small so single buyers have no such influence over the company. The coffee brand has quality products so charges for high price level. It has a diverse customer base and quality sensitive dimensions, therefore, customers are willing to pay high level of pricefor premium quality. The product mix category of company is also diverse that indicates the low power of buyers.

 It is offering high quality products such as juices,non-alcoholic and alcoholic beverages. The restaurants are providing good quality products and convenient ambience which is a key fact for their quality. This provides that the cost of switching is negligible. These factors provide the substitutes facing moderate to a big threat. There are no high barriers for company regarding initial investment so saturation level in the industry can be considered high(Nguyen, 2017).The possibility for company to stay successful and remain in competition is moderate. It has grabbed a larger share in the market, where threats for new entrants is always there. The market share is attributable to the efficiency, infrastructure, quality of products and differentiation. The Starbucks mitigate a large extent regrading brand image and share in the market.

The five forces analysis provides that Starbucks has a competitive edge in performanceso it also has access to suppliers and raw materials. Moderate level threat is there for company to face because coffee is a universal drink and its size and scope varies in different regions. These factors determine the near environment of Starbucks which is managed by strategical framework(Nguyen, 2017).

Analysis of Strategic capabilities

Critical success factors in the Coffee shop industry 

Starbucks operates in an industry that is characterized by intense competition and rivalry between its players. The strong force of competition in the industry as measured through the Five Forces analysis given by Michael Porter gives rise to the second strategic problem for the company. While the industry is characterized by a monopolistic rivalry and Starbucks enjoys the majority share, other players such as Costa, Dunkin Donuts, and McDonald’s also operate with significant global market shares which keeps the management and leadership of the company under constant pressure. Since the switching costs are low and customers have the luxury of choosing between rival brands, the issues of product pricing and brand loyalty are significant strategic challenges for Starbucks.

Unique resources of Starbucks

            Over the last few years, the coffee retail and snack store industry has been characterized by high levels of consumer spending and significant market growth in the United States. The increased customer spending and buyer purchase power is backed up by the rise in disposable income levels and a growth in consumer confidence over the economic and financial outlook of the country.

Unique Capabilities

Similarly, the switching costs and factors between the products and services offered by these companies are also considered to be relatively low. It allows the consumers to switch between the offered products easily which ultimately results in the high competition and rivalry in the industry. The organization is only second to McDonald’s when it comes to be the most valuable food brand all over the world and is valued at 44.5 billion dollars (Statista, 2019).

Competitive advantage

            Every industry has its own set of unique factors and drivers that are critical for any company or business operating within that sector to achieve its organizational goals and objectives. These factors and dynamics play a substantial role in ensuring that the business is successful in the long run. The critical success factors can often be defined as elements and processes of a business that occupy a central role in driving the business to progress and prosperity. 



The quality of the product is one of the key drivers of customer preference in a highly competitive industry. Therefore, the Starbucks management has to ensure that the quality of its products is not only maintained but also improved and enhanced on a regular basis so that more and more customers walk to its stores for their cup of coffee.

Future Campaign

The level of customer service goes hand in hand with the quality of the products offered. Effective and efficient customer service can also transform into a competitive advantage for the company (Larson, 2008).

 Sharing cost

Buyers have increasingly become more sentient over the production practices and procurement processes of companies and businesses over the past few years. The policies for addressing climate change, energy consumption, and social responsibility that the business has in place can play a major role in attracting customers to business outlets today (Atzori et al., 2018).

 The availability of different loyalty and discount programs also play an important part in attracting the buyers towards company shops. Research over the years has also indicated that buyer purchasing behavior is influenced by presence of loyalty programs and other advantages at offer.

Evaluation and Improvement

            Starbucks has a network of more than 14000 coffee shops and outlets in the United States alone and such a high number of stores has led to some shops and outlets being located in close proximity to each other (Whitten, 2019). The third strategic challenge for Starbucks is concerned with the expansion and growth strategy that the company has implemented over the past years. While, the rapid expansion strategy that the company has in place has enabled to open new stores and coffee shops at a lightening pace, it has also resulted in sales cannibalization and supply chain complexities for the company. This phenomenon has adversely affected the sales of some of the coffee stores.

Starbucks Experience of The Future strategy

Another significant strategic issue for Starbucks is the changing customer preferences and requirements. Starbucks signature product, the Frappuccino coffee, saw a dip of 14 percent in sales in 2015, which went down further by 3 percent in 2018 and accounted for only 11 percent of the company’s aggregate revenue. Similarly, the procurement of quality resources and the distribution of resources to different locations in an effective and timely manner has also become a strategic problem for the company. Starbucks has also actively looked to expand and diversify its menu and product offerings recently in order to create some sort of differentiation between itself and the products offered by competitive brands. The company has added cold beverages and refresher energy drinks amongst other products to its menu in an attempt diversify products and attract more customers(Whitten, 2019).

Key Stakeholders

            While the retail coffee market has shown a significant growth rate over the last decade, it has not reached the summit just yet. The global coffee retail industry is forecasted to grow at a rate of 5.5 percent in the coming years(MarketWatch, 2019). Despite the recent growth trends, the coffee retail industry is still substantially susceptible to economic downturns and recessions as the sales that drive the coffee retail and snack stores like Starbucks and Dunkin Donuts are significantly dependent on the levels of disposable incomes of the buyers. During an economic slowdown, the disposable income levels fall significantly which adversely affects the coffee retail industry and ultimately companies like Starbucks, as evident during the global financial crisis of 2008(Geereddy, 2014).

Sustainability and Feasibility

Starbucks Corporation is one of the leading roasters and retailers of coffee in the world today. The company began its operations in 1971 with a single outlet in Seattle as a roaster and retailer of coffee, spices, and tea. Starbucks has since enjoyed exponential growth over the years and has grown into the leading coffee roaster and retailer all over the world. According to recent studies carried out by Statista, Starbucks accounts for approximately 39.8 percent of the United States coffee market with a network of over 15,000 outlets and coffee shops spread all over the country alone (Statista, 2019). Similarly, the company accounts for a 10.5 percent market share in the restaurant industry as per the data gathered by CSI Market (CSIMarket, 2018). The company today operates with a network of over 30,000 coffee retail outlets and snack stores in more than 80 countries of the world, hence making it a major player in the global marketplace (Starbucks, 2020).


The management has previously tried to tackle issues and challenges stemming from the intense industry rivalry by devising different strategies and policies targeted at improving product quality, enhancing customer experiences, and strengthening brand loyalty. While such policies and strategies have allowed the company to create and maintain customer loyalty to some extent, much can still be done to address this strategic issue properly (Haskova, 2015). Starbucks can primarily be classified as one of the biggest players in the coffee retail and snack store industry of the world. It has led to a higher rise in the demand for coffee when compared to the rest of the regular products available at any of the snack stores.


The report is about strategic analysis of Starbucks.By including three main strategic issues that company is facing, the research has supported key facts and decisions of business process. The first segment of strategic issues discussed pestle analysis and far environment of Starbucks. This extended to include near environment also, which is based on porter’s five forces framework. The internal advantage of company was discussed by explaining its key internal policies for business. The second strategic question was about strategic positioning, advantage and capability. It addressedposition of company in the industry, position of industry and organization and critical success factors which are essential for any company. The unique resources and company’s capabilities re also explained. Third strategic question discussed evaluation and improvement in the form of new strategy prevailed in company and its power to tackle the issues. Suitable evaluation under SAF tests was discussed regarding stakeholder’s positioning and its feasibility. The report discussed an overall competitive performance of Starbucks that has high market share and revenue in the industry due to its premium products and pricing.


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