A Swot Analysis of Starbucks

Topics: Coffee, Starbucks, Coffeehouse Pages: 10 (3374 words) Published: November 18, 2009

Starbucks is a famous coffeehouse. Until the mid-1980s it was only a provider of coffee to fine restaurants. Thereafter Howard Schultz, director of retail operations and marketing, was impressed of the popularity of coffee in Milan while he was in Europe . His idea was born. He wanted to bring the coffee bar culture to the Americans. So Starbucks started to realise his idea and so created a new trend. The clue is not only to sell coffee, but to sell an experience. Today Starbucks has got about 20 million customers each week in about 5500 coffeehouses all over the world . While haunting to increase sales more and more, Starbucks has got a special growth strategy. They open a lot of stores in a very short period of time, expanding numerous food offerings and also getting into new segments, for example supermarkets. They develop new products like bottled coffee or Starbucks-flavoured ice cream. In addition to that, Starbucks tests new coffeehouse concepts, for example with live music. Since a few years, Starbucks opens more and more stores outside America.

The important question is, if Starbucks’ growth rate will continue within next years because on the one hand critics say that Starbucks grows too fast and is loosing the focus while on the other hand some critics compare Starbucks’ coffee with Mc Donald’s´ hamburger and believe that they will grow up more and more as the dominant player on this market .

With the help of the SWOT analysis and the BCG matrix the situation of Starbucks can be analyzed after finding out, why people pay more money for a coffee, than in other coffeehouses.

What has suddenly made people across the world willing to pay three to four times more for a cup of coffee than they used to?

Starbucks has created a new trend. They do not just sell coffee, they sell an experience. To drink coffee at Starbucks is different from drinking coffee in another coffeehouse according to a Starbucks executive who said, that “Starbucks is not in the business of filling bellies but in the business of filling souls” . They recognised that they were getting into a new niche, which did not exist before. While having great success, Starbucks grows rapidly to have an advantage according to a bunch of competitors who also entered this new niche. With the high-quality coffee, Starbucks creates besides a new brand a new lifestyle which is known all over the world. Furthermore, they offer a lot of different flavours which differs from other coffeehouses. But coffee is not the only reason why people are willing to pay a lot more there than in other coffeehouses. The mission statement declares that the employees’ job is not only to sell coffee. They should enthusiastically satisfy every customer to give him the special feeling and experience at Starbucks . All in all Starbucks recognised a new niche and satisfied the customers with their special flavoured and high quality coffee.

To get an idea of Starbucks’ success, it is necessary to take a close look at the company by using the SWOT analysis and the BCG matrix.

A SWOT analysis of Starbucks


The company has a strong presence in the United States of America and a good reputation for creativity and coffee. Starbucks has started a real trend and many people enjoy drinking a Starbucks coffee. However, it is not just coffee but rather an experience Starbucks sells.

Starbucks operates in more than 5,500 stores worldwide. This presence provides a wide and strong customer base. It is a global brand and is widely known. Starbucks built up a reputation for fine products and the name is a common brand label and this gives Starbucks a competitive advantage because people connect coffee with Starbucks. Every week more than 20 million customers visit Starbucks to get a coffee once or twice a day. In the last years the company could tripled their earnings. Another strength is that Starbucks has a strategy they follow. These strong...
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