Table of Contents
Challenges did Starbucks face.
Evaluation of Supply and Demand analysis.
Impact of supply and demand analysis on Starbucks.
As per the context of the business industry, it is known that the selected organization namely, Starbucks is one of the largest coffee retailers. Following that, in the year of 2007 to 2009, the selected company have been responsible for dealing with the financial crisis. Also, this economic crisis for the given company has happened due to the loss of the world economy. Henceforth, the management authority of the selected company has decided to close many stores across the world to cope up with the financial crisis (Azriuddin et al., 2020). The primary focus of this selected context is to give a brief as well as a clear image on Starbucks to deal with this difficult situation.
As per the context of the business industry, there are presences of different challenges that the selected company has faced during the economic loss from 2007 to 2009. Following that, the foremost challenge that the given company has faced is to the closure of multiple stores across the world. These incidents have been happened due to absence of appropriate marketing strategy within the organizational context. Also, the selected company namely, Starbucks retailing shop has not been able to deal with the competition. Following the competitive business industry propagated by Taecharungroj, 2017 it is known that there are presences of different organizations such as Dunkin Donuts, McDonald, CostaCofee and many more give a tough competition in the global as well as the local market.
Besides, the selected company has not incorporated the pricing strategy to influence the customers toward their company. Moreover, this company also delivers its service on a high price which in turn, provides cost advantage facilities to other competitive companies. Following that, the selected company has implemented rigorous expansion strategy. The management authority has thought this type of strategy helps to promote the brand image of the company. However, this kind of activity does not allow the company to emphasize its products or service in the supermarket.
Following the context of the business industry, supply and demand analysis have been applied to identify the markets based on different factors such as labour, capital as well as other elements of production (Asfar, 2020). Following that, the supply and demand analysis is one of the most crucial frameworks to identify different ways to enhance the economic situation of a company. Also, this analysis or process helps the business organizations to identify the equilibrium price which in turn, help the business organizations with a stronger economy for the near future.
As per the context of the business industry, it is known that supply element in the supply and demand analysis has been recognized as the total amount of service good for the customers. On the other hand, demand stands for an economic principle which in turn, helps the company to identify the desire or willingness of the consumers to pay the price for specific products. Following that, the price aspect has been associated with the demand criterion. Increased demand for product results in the enhancement of the price of that product. On the other hand, if the demand for a service is reduced which in turn, lowers the price range of the service.
Also, per the law of the supply and demand analysis, it is known that people tend to avoid those products or services which are sold expensively. If the price of a product is increased then it will lower the opportunity of cost of buying criterion for the customers which in turn, results in lower demand (Wang et al., 2020). This same activity is gone for the selected company that received economy loss due to lack of proper strategies to earn more amount of money which in turn help the company to achieve more revenues from the competitive business industry.
Under the Coffee Drinker Statistics in 2012, United States has raised its demand for coffee as a basic beverage which in turn, helps the coffee suppliers to open their stores to sell the company (Basak et al., 2020). Also, by expanding the brand image through different types of promotional events and advertisements, the coffee sellers can be able to reduce or lower the average fixed costs. These activities help the coffee sellers to earn more revenues as well as lower cost for a long time. Besides, the selected company has also examined exchange rates and interest rates to identify the domestic economy as well as international trades respectively (Wang et al., 2019). During the period of economic loss from 2007 to 2009, several types of research have shown that the chosen company had paid more money to import the coffee beans. As the company delivers the premium quality coffee to the customers and hence, the company can influence more and more customers by implementing focus strategy (Jo & Kim, 2017). This strategy helps the company to lower its exchange rates which in turn, help the company to earn more money and revenues.
The selected context provided a clear image of different types of challenges that the given company had faced during the economic loss from 2007 to 2009. Also, the researcher had provided a clear concept about the supply and demand analysis that the selected company has implemented to increase the revenues for the company. Following that, this company had gone through Focus strategy and implemented strategically decisions under the international markets.
Asfar, O. (2020). Fiat and Starbucks: the Repurposing of Competition Law for Anti-Tax-Avoidance Schemes. Business Law International, 21(1), 69-77.
Azriuddin, M., Kee, D. M. H., Hafizzudin, M., Fitri, M., Zakwan, M. A., AlSanousi, D., ... & Kurniawan, O. (2020). Becoming an International Brand: A Case Study of Starbucks. Journal of the community development in Asia, 3(1), 33-43.
Basak, S., Ranjith, P. V., Prakash, P. A., Albesis, G., Quttainah, M. A., Shukla, S., & Pandey, R. (2020). Business Idea for Starbucks: Organic Yerba Mate Beverages. International journal of Tourism and hospitality in Asia Pasific, 3(2), 89-96.
Jo, A., & Kim, H. S. (2017). A comparison of Starbucks between South Korea and USA through big data analysis. Culinary science and hospitality research, 23(8), 195-205.
Taecharungroj, V. (2017). Starbucks’ marketing communications strategy on Twitter. Journal of Marketing Communications, 23(6), 552-571.
Wang, J., Zhai, T., Lin, Y., Kong, X., & He, T. (2019). Spatial imbalance and changes in supply and demand of ecosystem services. Science of the Total Environment, 657, 781-791.
Wang, N., Zhang, T., Fan, X., & Zhu, X. (2020). Game theoretic analysis for advertising models in dual-channel supply chains. International Journal of Production Research, 58(1), 256-270.
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