Swot Analysis: Starbucks

SWOT Analysis: Starbucks

• Value Preposition:

Starbucks has been successful to build the “live coffee culture” and the premium coffee lifestyle brand image suitable for their target customers. Their value preposition focused on a brand strategy that was comprised on three key points. First of all, Starbucks was known for their “highest-quality coffee in the world”. Secondly, their friendly service philosophy, which includes simple things such as remembering someone´s name or drink order.  The third component is the comfortable atmosphere that they offer to their customers.

• SWOT Analysis

• Strenghts                                    

• Strong Market Position and Global Brand Recognition: Starbucks has operations in more than 60 countries and is the most recognized coffeehouse brand.
• Superior financial performance.
• Starbucks is known for high-quality products and the best customer experience in the industry: That´s why the company charges premium prices and still become the largest coffeehouse chain in the world.
• The location of their stores are also the pieces that help deliver a competitive advantage in terms of customer experience. Almost all Starbucks ´stores are located in high-traffic, high-visibility settings such as retail centers, office buildings and university campuses. This made Starbucks a very convenient coffee house

• Weaknesses

• Product Expensiveness: Starbuck´s main competitors, Dunkin´Donuts, McDonald´s and Costa Coffee are cheaper. Starbucks premium prices can prevent the company´s development  
• Starbucks is overly price sensitive to the fluctuations in the price of coffee beans. The company is heavily dependent on its key input, which is the coffee beans and hence, is acutely dependent on the price of coffee beans as a determinant of its profitability.
• Starbucks coffee isn´t widely accepted in some European and Asian countries.  

• Opportunities
• Expansion into Emerging Markets: Starbucks has already started this process expanding their business other countries, like India. They have great growth potential in the emerging and developing markets.
• Starbucks products have already been introduced in some supermarkets across the world. Selling their products in other stores, would be a good way to maximize their value and attract a new target of customers.  
• Co-branding: They have the opportunity to cooperate with other companies and co-brand. For example, it would be valuable the introduction of Starbucks in McDonald´s Restaurants.

• Threaths

• Increased Competition: Dunkin´Donuts and McDonald´s are two other companies which directly compete with some of Starbucks products. By offering products with similar quality and lower price, there are progressively trying to minimize Starbuck´s market share.
• Change of Lifestyle and Preferences: The shift of costumers toward healthier products represents a threat for the companies.
• The company faces threats from the rising prices of coffee beans and is subject to supply chain risks related to fluctuations in the prices of this key input

• Recommendations

• The company should consider pricing strategies that attract more customers.

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