Opportunities and Threats SWOT Analysis Starbucks is known for the extraordinary coffee that they have provided over decades. Although the coffee is great and the business is successful, other aspects can put a treat on the company just as any other business. When it comes to the downfalls “higher commodity cost, intense competition, and legal proceedings can have an adverse impact over the business” (Lemus, E.). Per Lemus in the article “Starbucks Corporation: Leading Innovation in the 21st Century” Starbucks current SWOT analysis is as follows: Internal strengths include: • Established 40 years in the market • Adequate financial sustainability • Company’s culture contribution • Ethical for best business practice • Experienced in the market …show more content…
However, it is very noticeable how good Starbucks handles these situations. They continue to add to their strengths, fixing their weaknesses, going for all their opportunities, and decreasing the threats that they are faced with. Starbucks Organizational Future Starbucks are planning to add to their organizations growth, by continuing to make Starbucks a top of the lie coffee distributor and business. Some of the ways that Starbucks plan to continue to grow their organization in the future is by growing the number of stores, elevating the coffee experience, creating new customer occasion, and driving at home coffee share and occasions. By growing the number of stores Starbucks plans to create and open “express stores which essentially function as walk-thrus in New York, Boston, and Seattle” (Speculations, G). By doing this the company’s plans are “aimed at increasing the company’s store penetration” (Speculations, G). After the growing plan Starbucks is sure to see a 5% minimum in growth when compared to the U.S. (Speculations, G). The graph below shows the total change in the franchised store, the graph is from the article “Let’s Look at Starbucks Growth …show more content…
It is safe to say that Starbucks should continue to grow globally. Although it has been proven that they are already doing great globally with their 22,519 store open to date. It will still be good for the company to expand due to their successful growth. Starbucks strengths are good and already leveraged, however their weaknesses could become a risk in the future. Two of the risk that they should watch for is the high price of coffee beans in the market. Because of this it is driving up the price of their product which is also a weakness that they
One critical obstacle for the Starbucks franchise is the over saturation of the market, they continued to build new businesses in local markets with out giving each the opportunity to solidify their customer base, some building as close as 2 blocks in large metropolitan areas. The economy could also have a direct impact on the Starbucks franchise. During times of prosperity and job security it is more comfortable to spend $2.10 on a 16 oz. cup of coffee than a $5.15 for a medium sized specialty coffee drink such as a Café Mocha or Carmel Macchiato. When the economy is down, the average consumer will cut
The organization can team with other organizations in order to create new products or grow revenues to the next level. Another option is to refocus on the home front and continue to growth domestically. With the competition that they currently face, Starbucks can push to gain bigger market segmentation. The company can also explore the expansion of their menu beyond just the “muffin mentality”. With that being said, they can also incorporate a full service breakfast & lunch and customers would be to get their coffee and a breakfast sandwich. Starbucks can focus on innovation by creating new items such as juice, gum, energy drinks, snacks,
Starbucks mission statement states: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” The corporation focus on the local communities and takes a proactive strategy to be a part of their lives. According to the Starbucks’ principles, every single store is a part of a community and it is a responsibility to live in a good relations with everyone. Instead of looking for an opportunities to expand in the most profitable places, it would rather be invited to do business in particular areas. Also, the company principle states that the business can take the lead in changing and helping in improving the society around. It is going to be a force pushing everyone ahead.
Shahi, T., Omar, J., Aufscla ̈ger, M., Schmerling, T. & Gassner, S. (2007). Case Study Report: How Starbucks Corp. should improve its business. Sydney: Macquarie University.
...y preserving the integrity of the core business is a prerequisite for sustainable growth when expanding into other products, channels, brands and markets (Starbucks Financial Statements 2013, 5). The year 2013 has seen a combination of growth strategies - serving iconic beverages as well as new menu choices, expanding in existing markets as well as venturing new markets. In 2011, Starbucks unveiled a new logo which it says indicates its intention to move beyond its core product.
With that store being there to help support new stores that would be entering the region. The goal was to have around 20 stores after two years of entering a market and have those stores expand even further into smaller cities and suburban locations. They also started to add drive-through because it made it more convenient for parents with small children. Some of the drawbacks of drive-through were that it took away from impulse buys and sometimes created bottlenecks in the line. Licensing the brand was also a great way that they expanded their business; by putting Starbucks in airports in malls they create a lot of foot traffic lead to successful stores. Starbucks carefully considered their image and the image they wanted to uphold when choosing licensees. The international market is now where Starbucks has the most potential to grow. As of right now Starbucks has plans to open 1,400 new stores in China. That’s more than half of the store it already has in China. The growth technique that I was most impressed with was that having two locations so close to each other would not saturate the market. The first store would see a drop in sales at first but would bounce back and the new store would grow. I notice we have that here, at Target in uptown you can actually see the Starbucks across the street while you are in line. Both seem pretty busy most of the time too.
Today, they have expanded lunch programs to a total of 4,150 stores and introduced the ability to warm pastries and provide hot breakfast sandwiches to stores across the nation. Starbucks retail stores are operated through a number of joint venture and licensing arrangements in South East Asia countries as well as Thailand, Singapore and China. When they do the business in foreign countries, the most important issues will have to be aware of the exchange rates. They are planning to open 2,400 stores internationally in 2007, and they have approximately set financial growth targets for total revenue 20 percent and annual earnings-per-share 20 to 25 percent for the next three to five years. In addition, they have proposed new stores count target to 40,000 worldwide (20,000 U.S. and 20,000 International) in the long-term (Starbucks Financial Release, 2007).
There is plenty of cheap coffee shop that steal Starbucks customers every day, but Starbucks is holding on strong to their loyal customers. Another reason why some people do not choose Starbucks is because of their advertising. People see Dunkin Doughnuts and McDonalds advertising so they chose them because people feel more comfortable with a company that shows them what they are about. If someone has never been to a Starbucks location they don’t know what to expect from that new place, but if that person saw an ad for a competitor shop, he/she would choose the competition. One other threat to Starbucks is the economy itself. If there was to be a crash in the market, people would become more aware of their spending, and probably cut down on expensive coffee drinks like the ones at
There are many topics that arise throughout the case with Starbucks Corporation. Starbucks Coffee is located worldwide and there are many different ways to look at this situation. The company offers a unique range of coffee, lattes, espressos, and café style drinks. The company intended to reach a specific target audience, but has ended up in many different markets and has been growing rapidly. Starbucks has greatly used the “youth appeal” strategy to gain entrance into new markets. However, such enthusiasm cannot be counted on indefinitely; other strategies are always in the works. Over time Starbucks has been able to acquire a solid brand reputation and has a world renowned company logo.
Starbucks did not escape the common practice of adapting and integrating the business to different geographic regions, but they did stick to their guns when it came to their standard product line-up and their no-smoking policy. Surprisingly, these conditions were met with wide acceptance. Analysts felt the real challenge would be in the European marketplace, what with coffeehouses on every corner to compete with. Again, the stores did very well, mainly because of the newer, cleaner environment they provided compared to the older locations of established houses.
According to Investopedia website, “a technique that reduces risk by allocating investments among various financial instruments, industries and other categories is known as diversification. Diversification is the most important component of reaching long-term financial goals while minimizing risk” (“Investopedia”, 2011). “Fundamentally, this strategy is about creating new products with new product life cycles and making existing ones obsolete” (Olsen, n.d.). With diversification, Starbucks would be able to enter new markets with new products. By having a diversification strategy enforced, this will create a path for effective growth for the business. As with any company considering new products in new markets, there are risks associated with it and Starbucks would need to be prepared to respond accordingly.
Starbucks core competencies can be defined as high quality coffee and products at accessible locations and affordable prices, providing a community to share in the coffee drinking experience, and variety of choices. They also value ethics and good business practices and is a consistent leader, being voted number one of 2012’s most ethical businesses by Ethisphere magazine for the 4th year running (“Starbucks”). The business strategy of Starbucks' is a single business company, focusing on only coffee-related products and retail store...
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded
I think the reason Starbucks is what it is today is because they listen to the customer. If they did not, they would probably lose business and customers like me. Another way would be if their coffee quality changed making them lose their customers to competition. Their coffee flavors and seasonal beverages make them very popular around the holidays and losing that variety or quality of the coffee would get rid of almost every customer completely. As well as their always new flavors and themes. People get bored with the old stuff and are more likely to try something new. I always love trying out new beverages from Starbucks and would be bored if I stuck to just one flavor each time. This is just a few ways of how Starbucks could lose customer including
Expansion of Domestic and International retail markets: With the target of 2000 stores by year 2000, Starbucks is on an expansion mode. They are expanding into the international markets and simultaneously they are diversifying in the domestic markets also. Initiatives like Frappuccino and the Doppio cart are part of this.