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Analysis of Internal and External Elements that Affect the Supply Chain.
External elements are factors that can negatively or positively impact
the business beyond its control. All businesses are vulnerable to both the
internal and external factors. There are several external elements that affect
the business, such as economic, government, sociocultural, and competitors.
Economic trends can impact the company by causing unemployment or by
generating a booming business. The government can change the regulations
and law on how businesses should operate, such as taxes. This impacts the
businesses supply chain structure by how they handle employment taxes,
health and safety, and quality control regulations. Another major impact is
the international supply trade that can cause positive or negative challenges.
The sociocultural factor includes lifestyle trends which varies depending on
the location of the business. This can also include factors such as income,
ages of customers in the surrounding areas, and consumer preference.
Competition with other businesses alike can also have an impact of the
business. There may be other factors, not mentioned, that have an impact of
any business which is why it is important for businesses to be aware of their
SWOT analysis. The SWOT analysis is beneficial to any business, at any point
in time. It also allows the business to identify strengths, weakness,
opportunities, and threats that influence or impact the business, and make
changes that would positively impact the business. Conducting an external
analysis is essential for the operation of a business. It allows the business to
evaluate and analyze the environment to better operate and compete with
competition. One way to overcome negative external forces is to
high-quality coffee they seek. A disruption for this element will devastate the
supply chain and Starbucks will have to seek other suppliers. Starbucks has
major distribution centers that provide orders for stores all over the world.
Any delay for this internal factor will push back orders for stores and
eventually result in a loss for the organization. Now and days machines play
a more important role in many organizations speeding up the process to
produce and deliver products. At Starbucks the integration of machines, such
as Frankie Evolution machines, may cost up to $11,000 to produce special
coffees; however, this is being used every hour at a staggering pace. The use
of these machines is crucial to the supply chain and plays an important role
for employees as well.
It is said that external elements for the supply chain have a much
greater impact than internal elements due to the statement that internal
elements can be controlled and the organization can adapt faster. All in all,
the elements that may affect the supply chain for Starbucks should be
closely monitored and forecast to mitigate the issues.
Recommendations
Starbucks, being a sociably responsible company, needs to be in a
constant improvement to ensure that all the levels of the supply chain are
being operated as supposed to and make sure they meet the required
procedures. We have analyzed that the journey from bean to a cup is not an
easy one, and especially if the organization wants to deliver the best quality
product in the market. However, one of the mistakes that the company has
experienced in the past, is that while focusing on opening more and more
stores around the globe, the supply chain had to focus on keeping up with
that expansion rather than focus in the proper management of the supply
chain. While at times when operational costs fluctuate and sales are going
through a rough season, Starbucks has decided to follow a three step
method that helps improve the supply chain performance, cuts costs, and
prepares the organization for future. These three key steps are:
1. Reorganize its supply chain organization
2. Reduce its cost to serve stores and improve execution
3. Lay the foundation for future supply chain capability
As of this day, the mentioned method has greatly worked for
Starbucks. The organizations supply chain, in an effort to be more efficient,
has transformed to success. In an effort to sustain the success in a future,
Starbucks recently began an initiative to recruit top graduates of supply
chain education programs. This not only benefits the company by having
better employees; but also helps the overall economy and society.
Sources
Chapa, Sergio, Valley Biz Blog: Starbucks to open [its] 18th RGV Location,
http://valleycentral.com/features/valley-business-blog/valley-biz-blogstarbucks-to-open-18th-rgv-location, May 2014.
http://www.starbucks.com/about-us/company-information/starbuckscompany-profile. Retrieved Sept. 2016.
https://en.wikipedia.org/wiki/Starbucks, Sept. 2016.
http://www.smartceo.com/fast-growth-fails-starbucks-krispy-kreme-pets-com/
http://www.fool.com/investing/general/2014/06/24/3-glaring-problems-withstarbucks-us-strategy.aspx
https://www.americanexpress.com/us/smallbusiness/openforum/articles/business-growing-pains-7-ways-rapid-growthcan-kill-your-business/
http://www.management.ac.nz