Starbucks SWOT
This document reviews the strategy of Starbucks. Here is a SWOT analysis of Starbucks:
Strengths:
• Renowned organisation
• Dominance- change of logo but consumers still recognising the company
• Very powerful brand in the coffee industry
• Worldwide stores- ability to capture key locations with many stores in close proximity
• Strong ethical values
• Has the lowest staff turnover in the industry
• Offers other products
• Stores are in visible places
• Market leader- highest share in coffee industry
• Strong financial foundation.
• Brand associated with high quality coffee
Weaknesses:
• Dependent on one product line (coffee)
• Not much focus on the business internally, most focus on expansion
• More competitors are coming into the market
• High prices, even when high quality is considered
• Closed down some outlets due to not many sales in some areas
Opportunities
• Whole bean sales in supermarkets
• Providing Wi-fi
• The ‘App’ for smartphones
• Starbucks coffee for use in Tassimo home coffee machines
• They are still looking to open new shops in key areas.
• Expanding out of just coffee into other industries- alcohol, clothing etc.
Threats
• Competition from other coffee chains
• Lack of ownership on coffee farms can lead to price fluctuations
The main factor that has affected the recent economic climate has been the recession that has just ended. During this recession thousands lost their jobs and this affected many businesses because people had no money to spend and started spending more wisely. Starbucks didn’t struggle during the recession.
Howard Schulz (2010) stated that even though the UK has been in a recession, Starbucks was still an affordable luxury to people and while they may not be able to afford a luxury car or go out for a fancy meal, he claims that most people should be able to afford a great cup of Starbucks coffee.
Howard Schultz (Starbucks Chief Executive) realised that it is difficult to maintain
Strengths:
• Renowned organisation
• Dominance- change of logo but consumers still recognising the company
• Very powerful brand in the coffee industry
• Worldwide stores- ability to capture key locations with many stores in close proximity
• Strong ethical values
• Has the lowest staff turnover in the industry
• Offers other products
• Stores are in visible places
• Market leader- highest share in coffee industry
• Strong financial foundation.
• Brand associated with high quality coffee
Weaknesses:
• Dependent on one product line (coffee)
• Not much focus on the business internally, most focus on expansion
• More competitors are coming into the market
• High prices, even when high quality is considered
• Closed down some outlets due to not many sales in some areas
Opportunities
• Whole bean sales in supermarkets
• Providing Wi-fi
• The ‘App’ for smartphones
• Starbucks coffee for use in Tassimo home coffee machines
• They are still looking to open new shops in key areas.
• Expanding out of just coffee into other industries- alcohol, clothing etc.
Threats
• Competition from other coffee chains
• Lack of ownership on coffee farms can lead to price fluctuations
The main factor that has affected the recent economic climate has been the recession that has just ended. During this recession thousands lost their jobs and this affected many businesses because people had no money to spend and started spending more wisely. Starbucks didn’t struggle during the recession.
Howard Schulz (2010) stated that even though the UK has been in a recession, Starbucks was still an affordable luxury to people and while they may not be able to afford a luxury car or go out for a fancy meal, he claims that most people should be able to afford a great cup of Starbucks coffee.
Howard Schultz (Starbucks Chief Executive) realised that it is difficult to maintain
References: Adamy,J & Wingfield, N. (2009). Starbucks to Present Recession Strategy. [online] Last accessed on 31st March 2011 at: http://online.wsj.com Baker, R. (2010). Starbucks investment in staff creates brand advocates. [online] Last accessed on 31st March 2011 at: http://www.marketingweek.co.uk Berfield, S. (2009). It’s Schultz vs. Schultz at Starbucks. [online] BusinessWeek, 10th August 2009, Last accessed on 3rd April 2011 at: http://www.msnbc.msn.com/id/32336151/ns/business-consumer_news Constantineau,B (2008) Starbucks launches campaign to reward faithful latte lovers in Vancouver [online]. Nexis UK. August 2008. Last accessed on 3rd April 2011 at: http://www.lexisnexis.com.lcproxy.shu.ac.uk DailyRecord (2010). Starbucks bounces out of recession by trebling profits. [online]. Last accessed on 3rd April 2011 at: http://www.dailyrecord.co.uk Kavilanz,P (2011). Starbucks unveils a new logo. [online] . Last accessed on 3rd April 2011 at: http://money.cnn.com Kotler, P. et al. (2005) Principles of Marketing 4th Ed. Harlow: Pearson Education Limited Schultz,H. (2010). Starbucks boss Howard Schultz on beating the recession. [online video]. Last accessed on 31 March 2011 at: http://news.bbc.co.uk.