Running head: Starbucks SWOT 1 Milestone Two: Starbucks SWOT Efren Gonzalez Southern New Hampshire University Running head: Starbucks SWOT 1 SWOT Analysis Strengths Having been a company that is been in existence in this business for more than a couple of decades Starbucks has gained considerable experience in the industry and has created a financial muscle for itself. The brand image of Starbucks as coffee shop is one that is unparcelled and is one that has been the envy of many of its competitors, though many smaller players have tried to emulate the Starbucks model of business very few or none have been able to get the kind of success like Starbucks. The company has developed a robust supply chain which has been one of the greatest catalysts for it to grow itself internationally and expand in markets other than the US in a successful manner (Geereddy, 2015). The fact that the company has already moved itself to the online sales channels is a boon in disguise which can be capitalized given the present global circumstances. Weaknesses One of the greatest weaknesses that Starbucks has always been with company is that most of its product offerings are in a premium segment which means that the cost of its products at the outlets are expensive as compared to other quick service restaurants. Though Starbucks may not technically fall under the quick service restaurants it is an undeniable fact that it has evolved itself from being just a coffee shop to a quick service restaurant. Many of its products can be imitated in the market unlike that of its competitors in the quick service restaurant category which means there are many similar offerings from competitors which are low priced than Starbucks. Despite moving towards new markets such as China and India the company has failed to localize its product offerings and this could be a weakness and a risk. There are few pending Running head: Starbucks SWOT 2 litigations in Europe which could cause considerable financial damage to the company if there were to be a unfavorable court ruling(Prathap, 2017). Opportunities The recent expansion into other markets such as China, India and a few parts of Africa are a great opportunity for the company and these developing markets present a great opportunity for growth. There is considerable opportunity because of this expansion and the company has the scope to bring in new products in its existing markets as well as in the new markets where it has begun to operate. The company had started its online sales channels well before this pandemic hit all across the world and this presents a great opportunity because people may not want to visit the coffee shop and rather order product offerings on an online basis. The company can align itself with multinational food/beverages companies to co-brand their products to be sold in Starbucks outlets (Haskova, 2015). Threats The quick service restaurant industry is highly competitive and there is cutthroat competition from the competitors and adding to this is the fact that the product offerings of Starbucks can easily be imitated. Being in the premium segment would mean that other smaller coffee shops could offer similar products at a lower price which would be real threat. The global pandemic that is staring at our faces has caused thousands of coffee shops of Starbucks to shut shop which eroded considerable amount of business in the last 6 months. Global recession which is now a reality thanks to the pandemic has the capability of putting the quick service restaurant business into doldrums(Bush, 2016). Running head: Starbucks SWOT 3 Prioritized List Strengthen the online business channels and make more online food aggregators such as Uber Eats, Grubhub etc. as business partners for delivery of product offerings to customers. The company can operate its own channel of online sales and deliveries apart from the alignment with partners. The same can be done in both China and India as Uber Eats operates in both these countries and it can strengthen its online presence in these two countries as they are considered to have a good internet penetration and online food ordering business is doing well. The global recession is here to stay for quite some time and the global economy is going to take considerable amount of time to recover from the shocks and aftershocks of a global recession thanks to this pandemic. Hence the company should think of reducing prices of its product offerings to make it more affordable for its customers to reach out to the products, during a recessionary trend having a coffee/snacks ordered from outside of home or office would not just be a luxury it would be beyond the reach of a large section of the population. Product diversification could be a part of the above strategy and could be treated separately as well. It could be used as guise to reduce the price of product offerings and at the same retain its popular product offerings also. The diversification can be brought by bringing in technological advancements and innovations by which the company would be able to get back some lost ground (Devault, 2018). The marketing activities of the company should shift to the online media, social media and all such available media through the internet because the in-store footfalls would take quite some time to gather back in full steam and it remains a mystery as on date on when there would normalcy restored in this regard. The company already has creative advertising and marketing Running head: Starbucks SWOT 4 campaigns in place and these should more be diverted towards the online channels to ensure that the company seals its place in the minds of the customers through this. Readiness The company has already experienced the online business in the past couple of years and it needs to equip itself better to increase this sales channel. The existing partnerships with online food aggregators such as Uber Eats can be leveraged for the new markets like China and India. Price reduction can be brought in under the guise of product diversification and this will help to increase more segments of customers who would be able to but Starbucks products. Online marketing presence would need a bit of an investment where it would need to conduct a whole lot of online marketing activities such as creating a presence in social media, in app advertising etc. to name a few. Running head: Starbucks SWOT 5 References Bush, T. (2016). SWOT Analysis of Starbucks, the World’s Leading Coffeehouse Chain. https://pestleanalysis.com/swot-analysis-of-starbucks/ Devault, G. (2018). Starbucks Use of Research Makes the Brand a Market Favorite. https://www.thebalancesmb.com/starbucks-use-of-market-research-propels-the-brand2297155 Geereddy, N. (2015). Strategic Analysis Of Starbucks Corporation. https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf Haskova, K. (2015). STARBUCKS MARKETING ANALYSIS. https://doi.org/10.1515/cris-20150002 Prathap, A. (2017). Marketing Strategy of Starbucks: A Case study. https://www.cheshnotes.com/2017/01/marketing-strategy-of-starbucks/
