Starbucks SWOT Analysis PDF

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Summary

Strong brand image – Starbucks Corporation is the most popular and strongest brand in the food and beverage industry. Its size, volume, and the number of loyal customers have kept growing over time. It has a brand value of $11.7 Billion as per 2019 Interbrand ranking....

Description

Starbucks SWOT Analysis Strengths Strong brand image – Starbucks Corporation is the most popular and strongest brand in the food and beverage industry. Its size, volume, and the number of loyal customers have kept growing over time. It has a brand value of $11.7 Billion as per 2019 Interbrand ranking. Extensive international supply chain – Starbucks is known to have an extensive global network of suppliers. Starbucks sources its coffee beans from three coffee producing regions, Latin-America, Africa, and Asia-Pacific. Weaknesses Generalized standards for most products – Some of its product offerings are not aligned with the cultural standards of other markets. For example, in some areas, its crafted beverages do not associate with the consumer preferences. Imitability of products – Starbucks doesn’t own the most unique products in the market. This makes the imitability of products quite easy for other companies. Other coffee shops and food chains like McDonalds McCafe and Dunkin Donuts offer almost the same products.

Opportunities

Business diversification and Products Specifications – It can further diversify its business operations to improve overall revenue growth opportunities. Besides, developing products as per the customer preferences in the specific target market is also a profitable opportunity. Introducing new products – As the company is quite popular, introducing new products and holiday flavors (Peppermint Mocha, Eggnog Latte, Gingerbread Loaf) under its name would be profitable and welcomed in the markets.

Threats Competition with low-cost coffee sellers – Many coffeehouses offer products at an affordable rate. This can threaten the future’s stability of Starbucks which offers higher prices. Coronavirus – Starbucks has temporarily closed estimated 2000 stores in China due to the outbreak of coronavirus. Considering Starbucks has 4123 stores in China, and almost half the stores are closed, it will have negative impact on their financials in 2020.

Starbucks PESTLE Analysis Political - The main political factor is about sourcing the raw materials. This has gathered a lot of the attention from politicians in the West and from the source countries. For this reason, the company wants to adhere to social and environmental norms. It is willing to follow the sourcing strategies. It gives importance to fair trade practices. Economic – The ongoing global economic recession is the prime external economic driver for Starbucks. As I already mentioned, this factor dented the profitability of Starbucks. This has convinced buyers to shift to cheaper alternatives. As they did not quit buying coffee, Starbucks should seek an opportunity here. Social - The baby boomer generation is retiring. This means spending by older consumers will decrease. Now, Starbucks will have to tap the Gen X and the Millennials as customers. Technological - The company introduced Wi-Fi capabilities in its outlets already. Internet is important to the consumers. They can now surf the web and do work while sipping Starbucks coffee. This is an added value to the brand. It enhances the overall consumer experience.

Legal - Starbucks must ensure that it does not violate any laws and regulations in the home market and countries from where they buy raw materials. It should also stay alert about introduction of caffeine production and consumption related policies and regulations by health authorities. Environmental - Many Starbucks business practices concern activists and international advocacy groups. Even the consumers have expressed issues. So, the company should take these into account to continue holding consumers’ trust....