Magnaye, Diane Ronalene C.
BSA III-01
STARBUCKS
SWOT
STRENGTHS
- Provides high quality and consistent
delicious products
- Well-known brand image
- Efficient operations and great strategic
planning
- Employees are treated well
- Has acquired well-known
companies/brand
- Number of stores and financial
performance has continue to grow and
increase
WEAKNESSESS
- Prices are higher than most coffee shops
- Products are not unique to the store, most
coffee shops also offer almost the same as
Starbucks
- Product recall of in-demand products due to
the risk of contamination. This has led to
lesser customer
OPPORTUNITIES
- Introduces new products and publishes
holiday flavors
- Develops alliances with major firms
- Offers regular coffee that is priced lower
to gain middle-class customers
- Strengthen their online sales channels
which has attracted more customers
- Orders can be delivered at home through
numerous food delivery services
- Global expansion in developing markets
THREATS
- Other coffee shops like McDonalds McCafe
offer almost the same products as Starbucks for a
lower price
- Products can be easily imitated by competitors
- Had to close thousands of stores due to the
pandemic
- Price of coffee beans have increased drastically
which can lead to a decrease in the profitability of
Starbucks
PORTER’S COMPETITIVE FORCES
Five Forces of Competition
HIGH
MEDIUM
LOW
1.Threats of New Entrants
2. Bargaining Power of Buyers
3. Bargaining Power of Suppliers
4. The Threats of Substitutes Products or Services
5. Intensity of Rivalry Among Competitors in the
Industry
1. Threat of New Entrants
o Starbucks has a strong brand image that is hard for new entrants to compete. It will take
years to reach the level of popularity of Starbucks. However, new entrants can provide
lower prices because they only need lower cost of operation compared to a big coffeehouse
like Starbucks. Thus, it’s a significant but only small issue.
2. Bargaining Power of Buyers
o Buyers can easily change from Starbucks to other brands or they can just use alternatives
like vending machines. This is considered a strong force for buyers who can influence
group of customers like vloggers or artists.
3. Bargaining Power of Suppliers
o Suppliers can aim more revenues by supplying raw materials to big companies like
Starbucks.
o There are a lot of suppliers of coffee all over the world which limits the influence of an
individual supplier which makes this component a weak force
4. The Threats of Substitutes Products or Services
o This component has a strong impact in Starbucks because the higher substitutes available
means that buyers can easily switch to other brands. Some examples are instant coffee,
vending machines, and other fastfood branches that offer much affordable price.
5. Intensity of Rivalry Among Competitors in the Industry
o Large number of competitors has a strong force in Starbucks. Majority of their competitors
offer almost similar products in a much lower price. It also doesn’t cost consumers much to
choose other brands instead of Starbucks.