Starbucks SWOT Analysis
Christina Penn 46077
BA 440 Marketing Analysis
Starbucks has long enjoyed the top spot as the premier specialty coffee retailer in America. However in recent years the company has begun to see a trend in sales that puts them on the downhill slope. Although there are a great many strengths that the company maintains in the marketplace, there are also several weaknesses. In this paper I will discuss the SWOT analysis of Starbucks to include the strength and weaknesses of the company and several courses of action to correct the drop in sales that has had a hold on the organization in recent years.
Starbucks SWOT Analysis
Starbucks employs over 149,000 workers and brought in a profit of $1.38 billion in 2012 (www.strategicmanagementinsight.com). The company is a household name that has been featured in television and movies and a brand that is sought after by countless celebrities. Although the company is the top retailer of coffee in the United States, Starbucks has shown a trend in sales since early 2009 that allude to the fall of the “great coffeehouse empire”. Because of this troubling news, executives at Starbucks have began to look deeper into the strengths and weakness of the organization and have tried to build courses of action that will help propel the chain back to the top of their market. The “Starbucks experience” is described by www.sosemarketing.com as being one of the strongest advantages of the company. It is “the experience delivered to its customers with perfectly blended coffee, premium music, friendly staff and warm atmosphere, which results in incomparable customer service”. The laidback atmosphere that Starbucks offers its customers is a direct reflection of the target audience that the organization is trying to acquire. The brand sees a majority of its profits from the 18-38 age brackets. I would advise the company to dig deeper into new market strategies that directly promote to their target audience. For example: this age bracket in particular would be more apt to the consumption of alcoholic beverages. Starbucks should pursue new menu options that include alcohol but still stay true to the brands taste. Other opportunities that Starbucks should explore to fully engage their core audience is new distribution channels such as the incorporation of delivery services in large metropolis cities such as Seattle, New York, Washington DC or Los Angeles. Often times young professionals will drop by their local Starbucks before work or at lunch and place a large order of beverages for their coworkers. Starbucks should head a market research poll to find out if loyal customers in these areas would be willing to pay a small fee for the convince of delivery services. As many true strengths as Starbucks has over their direct competitors such as McDonalds, Tim Horton’s and Duncan Donuts, the company is not without their fair share of weaknesses. One such glaring weakness for the company is the expensive product pricing. Compared to McDonalds, Starbucks coffee products are over 20% higher in a cost comparison model. (www.sosemarketing.com, 2011) Although Starbucks delivers the top quality product available to their customer, the company would be wise to take into consideration the current economic state of this country and the direct affect that has on their customers. Starbucks misses many opportunities to connect with an older customer base that is thriftier and less willing to spend their hard earned money on products that can be purchased elsewhere at a lower cost. A course of action for this dilemma is to offer customer loyalty memberships that give discounts and coupons to customers that sign up with their email address at www.starbucks.com. Customers could receive free beverages on their birthdays or coupons for certain deals and specials...
References: Ferrell, O., & Hartline, M. (2011). Marketing Strategy. : South-Western.
SWOT analysis of Starbucks. (n.d.). Starbucks SWOT analysis 2013. Retrieved June 16, 2014, from http://www.strategicmanagementinsight.com/swot-analyses/starbucks-swot-analysis.html
About Us. (n.d.). Starbucks Coffee Company. Retrieved June 15, 2014, from http://www.starbucks.com/about-us
Starbucks SWOT Analysis. (n.d.). Coffee Marketing:. Retrieved June 17, 2014, from http://www.sosemarketing.com/2011/09/22/starbucks-swot-analysis/
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