The advancement in technology is also important. The introduction of WIFI internet and Starbucks digital network to retain and attract customers has made it possible to increase its revenues( Miller, 2010). The introduction of Starbucks card has provided the customers with quicker service and more visits to Starbucks (Starbucks Corporation, 2011).
The overall political situation of the world, the existing tension between United States and the rest of world in particular Muslim world has affected Starbucks performance. In the year 2002 Arab students called for a boycott of American companies and in the boycotted companies Starbucks was also included. This boycott affected the profits of Starbucks in Arab world significantly (Robert Fisk, 2002).
Starbucks is fully committed to social and cultural environment in which it is working. The Starbucks has adopted an environmental friendly objective where the aim of company is to serve the society at large (Starbucks Corporation, 2011).
Value Chain Analysis
Human Resource Management
Starbucks has its employees at the centre of all its activities. The Starbucks has empowered its employees and developed a corporate culture beyond the normal standards. This valuation and dependence of Starbucks on its employees for all the core activities has provided Starbucks with a unique competitive advantage. The corporate decision of Starbucks to empower its employees and award them free stocks has improved employees commitment and better services to customers (Zoe, 2011).
Traditionally the marketing expenditures of Starbucks are quite lower as compared to other companies. But the mounting competition has pushed Starbucks to advertise to enhance its consumer base. In the year 2005, Starbucks has spent $87.7 million on advertising (Starbucks, 2011) and is continuously enhancing its marketing budget. Starbucks adopts a new marketing strategy where employees serve a communicator of brand (Gulati, 2008)
Starbucks has created an image of high quality brand among its consumers; it provides value to its customers. The extraordinary services which Starbucks provides to its customers are the difference between Starbucks and its competitors. Almost 85% of Starbucks’ business revenue comes from its retail operations and it is crucial for Starbucks to keep on providing valuable services to its customers (Starbucks, 2011). The recent addition of Wi-Fi internet and Starbucks digital network where customers can access free of cost services of Wall Street Journal, iTunes, has increased sales of Starbucks.