SWOT Analysis of Starbucks

Starbucks is the biggest coffeehouse multinational corporation in the world, with over 17,000 shops in 49 countries. The Company initially started selling roasted coffee as its main commodity. Currently, it is a diversified company which deals in food and non-food items such as hot drinks and cold drinks, coffee beans and Panini, pastries, salads, hot and cold sandwiches, snacks, and various other items such as mugs and tumblers. Starbucks also deals in books, film, and music. Many of the company’s brands are seasonal or specific to the locality of the store. The Company is famous for its rapid growth and expansion since its inception. SWOT analysis of star bucks corporation is given below.

 

Strengths

 

  1. Starbucks is the most diversified corporation by having different divisions such as entertainment music, books, film etc. 
  2. In May 2010, Starbucks had signed an agreement with Southern Sun Hotels South Africa and a partnership with Algerian food company Cevital which helped the company to expand in African countries.
  3. Starbucks uses the community website to get feedback and suggestions from customers.
  4. Starbucks is the biggest coffeehouse company in the globe, with more than 17,000 stores in 49 countries.
  5. It has a strong brand name and is globally recognized.
  6. Best taste coffee products with highest quality and strong Brand Loyalty.
  7. It has strong financial position and innovative operations.
  8. Starbucks has widespread store network. Approximately, 8500 outlets are owned by Starbucks directly.

    It also franchises and licenses 6500 Outlets.

  9. Starbucks provide free Wi-Fi at most of its outlets in different countries which enhances its competitive position.

 

Weaknesses

 

  1. The Starbucks site in the ex-imperial fort in Beijing closed in July 2007. In 2007, it also cancelled the strategy to expand into India.
  2. Starbucks discontinued its hot breakfast sandwich products due to operational inefficiency.
  3. In 2008-9, Starbucks closed more than 1100 underperforming company-owned stores and also cut about 1,000 non-retail jobs.
  4. Although Starbucks is a diversified company but it has more reliance on coffee and coffee related products.
  5. The company has higher downsizing rate and has controversies with employees and social groups.
  6. It has higher number of shutdown all over the world.

 

Opportunities

 

  1. There are significant opportunities present in South Asia such as India and Pakistan which is the market of 1.5 billion consumers.
  2. Starbucks has the opportunity to diversify into the energy and non food items.
  3. Culture is changing towards the health- and cost-conscious consumers. It is a good opportunity for the Starbucks to come up with hygienic products.
  4. The company can adopt sources of economic marketing such as internet and different loyalty programs.
  5. Starbucks has the opportunity to introduce more fair trade brands to minimize its expenses.
  6. It can create joint-ventures to enter unsaturated markets.

 

Threats

 

  1. Starbucks has been criticized on issues such as labor relations, fair-trade policies, environmental impact, anti-competitive practices, and political views.
  2. Higher raw materials prices and superior rivalry from lower-price fast food chains, with Dunkin’ Donuts and McDonald’s.
  3. Starbucks serves beer and wine. This practice has been condemned as "local-washing".
  4. Starbucks is tagged as anti-competitive for retaining its dominant market position.
  5. The company is facing regulation from different countries and it is also facing different controversies.
  6. It is facing strong pressure of the underperforming outlets all over the world.
  7. Increasing number of health conscious consumers is also a threat.
  8. Recession in 2008-9 affected consumer expenses.  Smaller amount of disposable income compelled the consumers to shift towards lower price competitors. 

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