Starbucks SWOT Analysis

Starbucks

SWOT Analysis

Starbucks is a leading coffeehouse which have outlets globally.  The following is SWOT analysis of Starbuck.

Strengths

• Stores growth
• Diversification
• Strong company image
• Extensive global supply chain
• Proper treatment of employee
• Loyalty program

Weakness

• Products imitability
• High pricing
• Stands for most products are generalized

Opportunities

• Expansion of range of products
• Diversification of business
• Expansion into developing and new markets.
• Adoption of new technology.
• Differentiation of prices
• Delivery services

Threats

• Imitation
• Competition
• Rising coffee bean prices
• Recession internationally

Every business experiences challenges and Starbucks is no different despite its strong image internationally.

Development of alternatives

1. Expansion of range of products – Starbucks a renown organization globally and therefore adding new products to its menu would be highly acceptable by its customers. More products would mean higher profitability since it will attract new customers.
2. Diversification of business – the company has the chance to diversify its operations further to increase the profitability. Diversification would mean addition of new products, modification of existing products to suit client preferences.
3. Expansion into developing and new markets – Starbucks is mainly based in America where most stores are found. Expansion internationally into developing markets such as China, India among other states would be a great opportunity.
4. Adoption of new technology – there are numerous opportunities presented by the dynamic technology. Adopting new technology will keep the business relevant in the and enhance customer service. Starbucks might be doing well in matters technology but there is always a room for improvement.
5. Differentiation of prices –Other competing brands are offering premium and regular coffee to ensure that different social classes are catered for. Starbucks has the opportunity to sell regular coffee that has lower prices than the premium one to capture customers in the middle class. This will increase the number of customers globally.

Evaluation

Business diversification is the best opportunity for Starbucks to grow its revenue both locally and internationally.  Starbucks has a strong image and good reputation and therefore introduction of new products to its menu may not be a problem (Mason et al., 2017). The company is accepted internationally and so are products. The new products only need to be customized to in a way that the customers’ preferences are met. Diversification will attract more customers as they will be willing to try out the new products. It will also win customer loyalty since there are satisfied with the company’s products and services. Starbucks has an extensive supply chain which would push the diversification agenda further. This means the company is in a position to source needed materials for the new products on time and competitive prices. Employees shall welcome diversification warmly since they are treated in the right way. Happy and satisfied employees translate into a productive company.

Recommendation

One of the major recommendations for Starbuck is investment in technological innovations and be innovative. It will enable the company to cope with the growing imitation of its products and services, and competition. It is also recommendable for Starbucks to lower the products’ prices so as to lure more clients and ensure affordability to the larger population (Helms & Nixon, 2010). It would be better if Starbucks implemented branding strategies, marketing and promotional campaigns to increase its acceptability in local markets and avoid negative profiling of the company.

References

Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis-where are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215-251.

Mason, A., Cole, T., &Goza, N. (2017). Starbucks: A case study of effective management in the coffee industry. Journal of International Management Studies, 17(1), 43-48.

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