Starbucks Swot Analysis

Topics: Starbucks, Coffee, Espresso Pages: 5 (1831 words) Published: December 13, 2005
Starbucks' Strategic Planning Using SWOTT Analysis
"Mirror, mirror, on the wall, who's the fairest of them all?" – The Queen in Snow White. Beauty is only skin deep, companies must also look within to secure longevity. Before a company can successfully bring a mission statement and vision to fruition, they must take a good hard look into the mirror. A company must reflect upon internal strengths and weaknesses, external opportunities and threats, and consider the trends associated with each (SWOT analysis). The fundamental process of strategic planning is through the encompassment of SWOT analysis. Taking a bite from the poisonous apple will be inevitable if a company fails to self-evaluate and strategically plan for the future. Starbucks Coffee Company is a paradigm of effective strategic planning through SWOT analysis. Astute analysis coupled with the ability to act swiftly has catapulted them to the position as the number one gourmet coffee retailer. They continue to document increased revenue annually and maintain a majority share of the gourmet coffee market. StrengthsWeaknesses

•Product diversification
•Customer loyalty
•High visibility•Self-cannibalization
•US market reliance
•Problems in some international operations
•Expansion into retail operations
•Technological advances
•Expand globally
•Brand extension
•Product distribution •Competition
•Prices of coffee beans and dairy
•Political tensions in global markets
Figure 1. SWOT Analysis for Starbucks Corporation
Starbucks serves up strong drinks and remains strong as the leader in the coffee industry market through product diversification, customer loyalty, and high visibility. Starbucks caters to the addictions and satisfies the needs of socioeconomic groups attempting to beat the daily grind. Got Milk? Starbuck does, and they put a spin on the famous marketing campaign to add calcium to the diet; they have created a dairy appeal for youths (Berry, 2002). Whether younger or older, customers with sundry palates may find something desirable amongst Starbucks' diverse products. They are sure to delight the senses with gourmet coffees, flavorful teas, baked pastries, and a myriad of seasonal hot and cold specialty drinks for any age patron. Starbucks has built a reputation and developed a loyal customer base. Where else can a complicated complex individual receive service with a smile when ordering a "triple-bypass-extra-hot-no-water-venti-½-soy-½-skim–no-whip-one-splenda-white-mocha-stirred-not-shaken-double-cupped-Mochaccino?" Starbucks has created a safe environment where people are free to design creative coffee concoctions; an environment that has instilled trust while in the company of comfort. Trust is a powerful tool that has provided Starbucks with the ingredients necessary to brew success. With up to 87 stores within a 5-mile radius in key locations, Starbucks has made their presence known and can easily sustain customer loyalty by means of convenient access (Starbucks, 2005). Weaknesses

Self-cannibalization, price, US market reliance, and problems in some international operations makes Starbucks vulnerable in the coffee market, but the Starbucks SWOT team is consistently trying to look in the crystal ball to avoid any set backs. Strategic planning includes identifying market areas and locations conducive to profitability. One key to retail prosperity is "location, location, location"; but with so many locations, possibly too many, this strategy could lead to "self cannibalization." A quick glance around the corner in any major city will reveal a Starbucks café at almost every turn. Although data are not available as to the impact of proximity, stores may eventually find themselves in a turf war competing for the same customer pool. The impact of propinquity may become more evident if the price of a cup-of-joe continues to climb. The...

References: Berry, D. (2002). Milk and sugar, please: One of the hottest trends these days is actually quite cold. Retrieved October 15, 2005, from
Griffith, E. (2003). T-mobile cut price of Wi-Fi. Retrieved October 7, 2005, from
Petrecca, L. (2005). Fast-food restaurants spruce up coffee. Retrieved October 15, 2005, from
Singer, J. & Fackler, M. (2003, July 15). Starbucks changes mix in Tokyo, Shanghai; as latte business slows in Japan, the chain may try new products: Beer, wine and coffee cocktails. Wall street journal, A6. Retrieved October 7, 2005, from ProQuest database.
The City Paper. (2005, June 29). The Starbucks effect: Luxury brands for everyone. Retrieved October 13, 2005, from Today. (2004). Starbucks to boost coffee prices in U.S. Retrieved October 10, 2005, from http://www.usatoday/money
Weber, G. (2005). Preserving the Starbucks ' counter culture. Retrieved Oct. 10, 2005, from
Wong, B (2004). Cup of Starbucks going up average of 11 cents Oct. 6. Seattle Post- Intelligencer Reporter. Retrieved October 14, 2004. from
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Swot analysis of starbucks Essay
  • SWOT Analysis and Tools Essay
  • Swot Analysis Swot Essay
  • Essay about Swot Analysis
  • Essay on Swot Analysis
  • Swot Analysis Essay
  • SWOT Analysis Essay
  • SWOT Analysis Essay

Become a StudyMode Member

Sign Up - It's Free