Swot Analysis Of Starbucks

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2. SWOT Analysis

Short for Strengths, Weaknesses, Opportunities and Threats, the SWOT analysis is a tool “commonly used in marketing and business in general as a method of identifying opposition for a new venture or strategy” (Goodrich, 2013). In using this tool, professionals are able to “identify all of the positive and negative elements that may affect any new proposed actions.” The SWOT analysis of Starbucks Coffee Company is conducted below in Table 1.

Table 1: SWOT Analysis on Starbucks Coffee Company

Strengths

- Top contender in the coffee industry
- Consistent international market growth
- Environmentally friendly
- Brand recognition is strong
- Use of high quality products and services
Weaknesses

- High product pricing
- Very dependent on sales of coffee products
- Do not have as much control over stores out of the U.S.
- Operation costs are high
- Lacks internal focus due to expanding too much too fast

Opportunities

- Start selling whole beans in supermarkets
- Expand product variety
- Expand distribution channel
- Expand into growing economies
- Take on more countries to get coffee bean supply from
Threats

- Competition
- Recession
- Bad publicity
- New changes in consumer trend
- Different countries have different political/cultural differences]

The first point from Table 1 that I would like to address and elaborate on is their high prices, a weakness of theirs. As compared to McDonald’s and many other places, coffee is a main focus of the stores, and because the focus is not on the food, there’s hardly any focus on preparing food to match such pricing.

Another point I have chose to point out is the threat of competition. Competition is so high in the coffee industry today and many companies are catching ...

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...nscious as some consumers are. However, Starbucks uses their preferences and adapts to it so as to satisfy their consumers.

Lastly, the developments in machinery impact the company tremendously. Machines are meant to decrease manual labour workload. Hence, Starbucks has to question if these developments will affect the standard of quality products, and will manufacturing, thus, be cheaper?

4. Porter’s Five Forces Analysis

Porter’s five forces model is “an analysis tool that uses five forces to determine the profitability of an industry and shape a firm’s competitive strategy” (Strategic management insight, n.d.). It helps to classify and analyze the most crucial forces impacting the rivalry among existing competitors in the same industry, and how it can better profit itself. The table below depicts how Porter’s Five Forces is conducted for Starbucks in Singapore.

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