Swot Starbucks

Topics: Coffee, Starbucks, Coffeehouse Pages: 4 (1316 words) Published: June 4, 2008
Strong brand image
Starbucks is a global brand. High quality products and a consistently-positive consumer experience have helped the company build a strong brand image. Starbucks, for instance, was ranked 91st in the 100 Top Brands 2006 ranking of BusinessWeek and Interbrand, an international branding consulting firm. The BusinessWeek-Interbrand combine valued the Starbucks brand at $3,099 million in 2006, up from $2,576 million in 2005. Starbucks uses innovative and cost effective marketing strategies to build its image including billboards, freestanding inserts in newspapers products and samplings, as well as innovative schemes such as paying for a day of free parking in a downtown area. Strong brand image helps the company attract new customers to its stores, which leads to additional revenues. Robust financial performance

Starbucks has recorded robust financial performance in the past few years. During 2002-2006, the company's revenues, operating profit and net profit grew at a CAGR of 24%, 28.6% and 28.6% respectively. Moreover, the company's average return on equity and return on investment during 2002-2006 were 19%, and 18% respectively, significantly higher than the industry averages of 15.3% and 11.3%. Robust financial performance enhances investor confidence and strengthens the financial position of the company. Large scale of operations

Starbucks has over 13,000 locations in 39 countries, which witness more than 44 million customer visits per week. The company employs over 146,000 people. Its competitors such as Diedrich Coffee, Green Mountain Coffee Roasters (GMCR) have a lower scale. Starbucks generated revenues of $7,787 million in 2006 against Diedrich Coffee's $59.5 million and GMCR's $225.3 million in the same period. Greater economies of scale provide a cost advantage to Starbucks in the marketplace. Weaknesses

Weak compliance function
Starbucks has been involved in several legal proceedings, which taken overall indicate a...
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