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Starbucks SWOT Analysis

International Business Project

Steve Alexis

on 7 May 2013

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Transcript of Starbucks SWOT Analysis

by: Steve Alexis Strategic SWOT Analysis Agenda Strategies Company Profile
General Information
Marketing Mix

Macro Environmental Analysis


Strategic Analysis Company Profile "To say Starbucks purchases and roasts high-quality whole bean coffees is very true. That’s the essence of what we do – but it hardly tells the whole story .." (Starbucks.com/Company Information) S1+O1: Starbucks is the largest Coffeehouse company in the world:
Over ~17,000 stores
Presence in 60 countries (65% of locations in USA) More than coffee Starbucks is "an experience":
Coffeehouses are a place to meet and for many part of a daily routine Mission Statement:
to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time Starbucks History 1971 1st Store Opens in Seattle's Pike Place Market 1984
Schultz brings the Italian coffee house culture to Seattle 1987 Il Giornale acquires Starbucks.
17 Stores 1992 Starbucks goes public
165 Stores 1996 First stores outside of USA
1,015 Stores 2004 First Farmer support Center
8,569 Stores 2011 40th Anniversary
17,000 Stores Marketing Mix Product Mix Coffee: 30+ blends
Hand-crafted beverages: coffee and non-coffee (e.g. Viviano Smoothies)
Merchandise: brewing equipment, mugs, etc
Fresh Food: baked goods, sandwiches
Consumer Products: Including
Coffee and Tea: VIA, Tazo, etc
Ready-to Drink: bottled drinks
Ice Cream Core Identity: Two-Tailed Siren. "For people all over the globe, she is a signal of the world’s finest coffee – and much more" (H. Schultz, CEO Starbucks ) Place World Presence:
Over 17,000 Stores in 60 countries.
~ 65% locations in USA
~ 50% Owned vs. 50% Licensed Location... The Starbucks Experience
Place to meet and socialize
Sustainability Efforts: New locations build according to the U.S Green Building Council's LEED certification
Design: Comfortable and luxurious, based on 4 main concepts:
Heritage: mirrors the style of the 1st coffeehouse in Seattle
Artisan: 1930's style industrial design
Regional Modern: Loft-like, trend-setting and comfortable
Concept: Unique and design to explore innovations Promotion Brand Image: Using philanthropy and sustainability efforts to attract customers that identify with their initiatives Other Promotional Efforts:
My Starbucks Rewards Card
Starbucks Card Mobile
E-gift Cards
Pick of Week: partnership with Apple iTunes
Seasonal Blends Price High Price due to
High Quality
Selling more than just a cup of premium coffee - Starbucks Experience Responsibly Grown Coffee Initiatives:
C.A.F.E Practices
Largest purchaser of Fare Trade Certified Coffee Corporate Social Responsibility One of the most socially responsible companies.
Heavily involved in:
Community Service
Environmental initiatives
Ethical Sourcing
Diversity Macro Environmental Issues Technology Economy Social Factors Competition Mobile phone Apps: track transactions, rewards, etc
Free Wi-Fi Average price: $3-$4
vs. McDonalds $1 coffe Coffee House atmosphere
Promotes a "lifestyle" Dunkin Donuts and McDonalds Financial Data SWOT Analysis Strengths Weaknesses Opportunities Threats 1. Number one Coffee House in the world
2. Very strong brand image
3. High quality of products and services
4. Sophisticated atmosphere: The Starbucks
5. Multiple locations in high traffic areas
6. Loyal customers
7. High market share and market growth
8. Relationship with their workforce (e.g. employees treated as partners)
9. Strong sense of Corporate Social Responsibility (brand building) 1. High Price
2. Considered "American Global" (resentment in some countries)
3. Highly concentrated in the domestic market (65% of locations in USA)
4. Health Concerns: Starbucks products can be high in calories and fat
5. Menu focused on the "adult consumer". Limited menu options for kids 1. International Expansion
2. Diversify product offering beyond coffee house (e.g. alcoholic beverages)
3. Take advantage of the "Home Brewing" boom
4. More Strategic Partnerships 1. Current state of economy
2. Rise in the market price of coffee and dairy products
3. Fluctuations in coffee supply
4. Entry of new competitors and "copy cat" brands
5. Success of lower priced competitors, like McDonalds and Dunkin' Donuts
6. Success of high-end competitors, like Caribou and Panera Leverage their strong brand image to further expand their presence in international market W2+O1+T5&6: Also, by expanding beyond USA, Starbucks can offset market share losses due to the strong market competition in both low and premium tiers S6+T1: Further develop the relationship with consumers that are loyal to the brand and are willing to pay a premium for their products. (attract consumers that are not price sensitive) W4 + O4: Develop new strategic partnerships with local farmers and other independent producers that allow Starbucks to include more healthy options to their menu while building further their image and sense of corporate social responsibility S4 + T4,5&6: Differentiate further their most important product offering "The Starbucks Experience" to make entry to the market more difficult and stop the success of competition in the low and premium tiers W5+O2: Expand the current menu to attract more customers, with options for "the mom on the go" or the "after hours" crowd looking for a sophisticated place to socialize ("happy hour") References 1. Cardenal, Andres, Starbucks SWOT Analysis: A Tasty Coffee Stock. Retrieved 11/10/2012 http://beta.fool.com/acardenal/2012/11/09/starbucks-swot-analysis-tasty-coffee-stock/16100/
2. Hispanic Wire, Gavina Coffee Helps Put the Accent on McDonald's Brand. 6 July 2005. 22 February 2011 http://www.hispanicprwire.com/News/in/14500/4/gavina-coffee-helps-put-the-accent-on-mcdonald's(r)-new-mccafe(r)-brand
3.LeTrent, Sarah. Starbucks Plans to Stir Up Coffee Market. 26 May 2010. 2011 February 2011 http://articles.cnn.com/2010-05-26/living/starbucks.coffee.battle_1_starbucks-chairman-starbucks-ceo-schultz-starbucks-plans?_s=PM:LIVING
4. Manize, Neni, Starbucks SWOT Analysis and Strategy-Tactics. Retrieved 11/10/2012. http://realswotanalysis.blogspot.com/2011/02/starbucks-swot-analysis-and-strategy.html
5. McGraw-Hill Higher Education,“Starbucks Corporation”. Student Resources. http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html
6. SEC, Starbucks Corp 10-K. Retrieved 11/11/2012.
7. Starbucks.com,“A look at the Future of Starbucks” Retrieved 02/15/2011 http://www.starbucks.com/preview
8. Starbucks.com,“My Starbucks Rewards Program Information”. Retrieved 02/11/2011. https://www.starbucks.com/card/rewards/program-information
9. Starbucks.com,“Starbucks Company Profile”. Retrieved 02/11/2011 http://assets.starbucks.com/assets/aboutuscompanyprofileq12011final13111.pdf
10.Tirella, Joseph V. Dunkin' Donuts' War on Starbucks. 29 January 2009. 22 February 2011 http://articles.moneycentral.msn.com/Investing/StockInvestingTrading/dunkin-donuts-war-on-starbucks.aspx
11. Wikipedia,“Starbucks”. Retrieved 02/11/2011. http://en.wikipedia.org/wiki/Starbucks
12.Yahoo! Finance, Starbucks Corporation Company Profile. Retrieved 11 February 2011. http://biz.yahoo.com/ic/15/15745.html BRIC Countries Brazil Russia India China Fastest growing and largest emerging markets economies. They account for almost three billion people. By 2020, all of the BRIC should be in the top 10 largest economies of the world. The undisputed heavyweight, though, will be China, also the largest the creditor in the world.
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