- 1 Starbucks SWOT Analysis
- 1.1 Strengths in the Swot Analysis of Starbucks
- 1.2 Weaknesses in the Swot Analysis of Starbucks
- 1.3 Opportunities in the Swot Analysis of Starbucks
- 1.4 Threats in the Swot Analysis of Starbucks
- 1.5 Limitations of SWOT Analysis for Starbucks
- 1.6 Weighted SWOT Analysis of Starbucks
- 1.7 Recommendations for Starbucks
- 1.8 References
Starbucks Swot Analysis: Nowadays every business is increasing rapidly, due to that the business has a lot of competitors in the same products in the same area with only different names.
If any brand wants to survive as the best then they need to update day by. In addition, They also must know the status of their surrounding market.
The Swot Analysis is the best way to distinguish the company’s positive and negative aspects which need to improve.
The Starbucks Swot Analysis 2022 represents the Strengths, Weaknesses, Opportunities, and Threats of the company. If you want to find out more about the SWOT of Starbucks, you’re in the right place.
Before we undertake an in-depth SWOT analysis of Starbucks, let us understand a bit of the background of the company Starbucks.
An Overview of Starbucks:
Starbucks Corporation is an American worldwide strongest and popular coffeehouse chain. It’s headquartered in Seattle, Washington. Starbucks is seen to be the main symbol of the United States’ second wave of coffee tending.
|Industry Type||Public Coffee shop (Restaurants)|
|Founded||March 30, 1971|
|Headquarters||2401 Utah Avenue South, Seattle, Washington|
Number of locations
Current CEO & Chairman
|Products||Coffee beverages, smoothies, tea, baked goods, sandwiches|
|Revenue||US$26.50 billion (2019)|
Number of employees
|Main Competitors||Caribou Coffee, Costa Coffee, Dunkin’ Brands Group, Inc., Green Mountain Coffee Roasters, Luckin Coffee, McDonald’s, Nestlé S.A., etc.|
Starbucks SWOT Analysis
The SWOT analysis Starbucks 2022 separates all the main strengths, weaknesses, opportunities, and threats that give guidance to the company to grow to a better position.
Strengths in the Swot Analysis of Starbucks
- Starbucks Coffee Company is the most famous and largest brand in the food and beverage industry worldwide.
- China will become the second major Starbucks market in the future and is the second-fastest-growing Starbucks market behind the U.S. already. Most importantly, Starbucks is well-positioned to compete in China.
- The widespread global supply chain strengthens Starbucks by supporting operations. It has a proper process of its timely delivery that takes care of supplying its raw materials.
- To fulfill the best client experience Starbucks has to excel at many things, including quality of its coffee and tea; menu choices; quality of its customer service; location, and quality of its stores.
- Starbucks has observed annual revenue of about $26.5 billion and a profit of about $3.6 billion. It does highlight its performance, this is a huge strength for the brand.
- Starbucks spends its profit again to expand its business to many other locations. It adds new outlets in many locations that would also increase its name.
- It maintains strong relationships with Suppliers so it has a low risk of non-delivery.
- Starbucks is known for handling its hundreds of thousands of workers very well and has previously been listed as one of Fortune’s Top 100 Places to Work For.
Weaknesses in the Swot Analysis of Starbucks
- After consuming the Starbucks products the customers think about the health issue.
- Over the years, Starbucks has been reassembling many products that are in huge demand products. It may create negatively affect the brand image and lead to the loss of customer base.
- The hefty price tags on some of their products prevent lots of customers, who just don’t have that much money to spend on a cup of coffee.
- The company was criticized by many environmental and social activists for its bad practices with regard to the obtainment of coffee beans from needy third-world farmers. As well, it’s violating the basic principle ‘Fair Coffee Trade’ and not trying to be honest with the customers.
- It is fully dependent on the US operating segment. Most of the revenue is becoming from the US.
- Other companies copied many products because they don’t have any unique products in the market. It provides similar products like McDonald’s, Dunkin Donuts, etc.
Opportunities in the Swot Analysis of Starbucks
- It has a lucrative opportunity to open a branch in emerging markets like India, Central Europe, and some regions in Africa, including its profit.
- It can additionally increase its business operations to improve overall revenue growth opportunities. Besides, developing new unique products as per the customer choices in the particular target business.
- Starbucks can offer regular coffee at lower-priced to obtain middle-class customers and also it can offer premium coffee for different classes. Some coffee shops are expanding their customer base quickly by offering regular and premium coffee.
- Currently, for its Starbucks coffee transportation, customers totally depend on Uber Eats, Grubhub, and Postmates. It can start its personal coffee distribution service for a bigger customer experience.
- The COVID-19 pandemic has hindered in-store consumption with more coffee drinkers opting for take-away. To attract more customers Starbucks can strengthen its online sales channels.
- Co-branding always benefits, to flourish more. Starbucks has the opportunity to develop partnerships and alliances with major firms. This would be a big success for Starbucks.
- The company is quite popular, still, it has a chance for launching new products and vacation flavors under its name, it would be profitable and greeted in the markets.
Threats in the Swot Analysis of Starbucks
- A large number of competitors in especially coffee brands are a big threat to the company. McDonald’s and Dunkin Donuts are directly competing with Starbucks by providing the same products.
- Also here listed the other big competitors like Caribou Coffee, Costa Coffee, Green Mountain Coffee Roasters, Luckin Coffee, Nestlé S.A., etc. This would naturally affect its profits as well.
- There are many affordable price resellers in the market with provide quality. Due to this, people might think twice before entering to Starbucks outlet.
- Because of the recent COVID 19 issue, Starbuck has been closed many outlets in China and other places due to the explosion of this virus globally. As this is a global issue, it does impact the brand’s financial condition.
- All its products can be easily reproduced by other companies. Actually, Starbucks does not have any special unique product which will distinguish it from other companies.
- Natural calamities largely affect the supply of products to customers.
- Outer factors can have a significant impact on the cost of coffee. For example, weather, wars, an infestation of crops.
- If the prices of Arabica (the world’s most commonly produced coffee) Coffee increased drastically then it would be affected Starbucks’ profitability.
Limitations of SWOT Analysis for Starbucks
While it is true that the SWOT analysis is extensively used to plan strategic strategies, However, it has its fair share of drawbacks.
- Certain abilities or aspects of an organization could be both a strength as well as a weak point at the same. This is among the most important limitations in SWOT analyses. Changes in environmental regulations could be an issue for the company but however, it could also be an opportunity in the sense that it allows companies to be on the same level or gain an advantage over its competitors when it is could develop the product more quickly than its competitors.
- SWOT doesn’t provide a way to get a competitive edge It is not a strategy to gain a competitive advantage, therefore it should not be a complete solution.
- The matrix is merely an initial point of reference for an analysis of how the proposed strategies might be implemented. It also provided an evaluation window, but it did not provide an implementation plan based on Starbucks’ strategic competitiveness. Starbucks
- The SWOT model is a static evaluation and analysis of the current conditions with only a few potential modifications. As the environment, circumstances, as well as threats and strategies, alter, the dynamic of the competitive landscape cannot be analyzed in one single matrix.
- SWOT analysis could cause a company to focus too much on the importance of a single external or internal element in formulating strategies. There are interrelations between the most important external and internal elements that SWOT cannot reveal that could be crucial in determining strategies.
Weighted SWOT Analysis of Starbucks
Due to the previously stated shortcomings of the SWOT analysis or matrix, the management of corporate determined to give an appropriate amount of weightage for each of the strengths and weaknesses of the company.
They also consider the likeliness of happenings in the near future, and the impact they can be on the performance of the company.
This technique is known as a weighted SWOT analysis. It’s superior to simple SWOT analysis as With weighted SWOT analysis Starbucks managers can concentrate on the most crucial elements and ignore the less crucial ones.
It also eliminates the problem of a long list that causes organizations to make an extensive list, but with none of the elements are considered to be crucial.
Recommendations for Starbucks
Here are a few recommendations for Starbucks for their further improvement:
- They can definitely work more on their money management skills.
- Getting their own shop space instead of renting could be a great option for them.
- They should most definitely get more equipment in their shops.
- They try to cut prices off of some of their items which will help them oh so obviously.
- They easily use creativity in their campaigns across the market.
- They can also try to convince people to be a member of their community.
- Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis-where are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215-251.
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- Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), 801-830.
- Koehn, N. F. (2002). Howard Schultz and Starbucks Coffee Company. Harvard Business School.
- Mason, A., Cole, T., & Goza, N. (2017). Starbucks: A case study of effective management in the coffee industry. Journal of International Management Studies, 17(1), 43-48.
- Piercy, N., & Giles, W. (1989). Making SWOT analysis work. Marketing Intelligence & Planning, 7(5/6), 5-7.
- Smith, M. D. (1996). The empire filters back: Consumption, production, and the politics of Starbucks Coffee. Urban Geography, 17(6), 502-525.
- Starbucks Coffee Company – Menu.
- Starbucks Corporation – Form 10-K.
- U.S. Department of Agriculture – Economic Research Service – Food Service Industry – Market Segments.
- U.S. Department of Commerce – International Trade Administration – The Consumer Goods Industry in the United States.
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This poll reveals the SWOT Analysis of Starbucks Company which will surely help out to know where Starbucks stands in the current market. The SWOT Analysis Starbucks represents the business strategies of the company.