...SWOT Analysis: Starbucks Hawaii Pacific University Jennifer Rocha Abstract Starbucks Corporation, is a retail super chain whose specialty is selling a variety of hot and cold coffee. In addition to its retail coffee, Starbucks sells coffee brewing machines, tea, merchandise and hot and cold food items. The store began in 1971 with a single store in Seattle and has expanded to 23,305 stores in 65 countries and territories, including 13,049 in the United States, 1,909 in China, 1,555 in Canada, 1,089 in Japan and 927 in the United Kingdom (Wikipedia 2014). Howard Schultz, Chairman, Executive and Chief Executive Officer, has been at the helm of this coffee supergiant since 1987. Mr. Schultz is the dreamer behind the “place for conversation and community” experience that Starbucks provides (Starbucks Heritage, n.d.). Although Starbuck’s is a global corporation, it primarily operates out of its United States headquarters located in Seattle, Washington. Below I will provide a Strengths, Weakness, Opportunity and Threat (SWOT) analysis of Starbucks from a managerial perspective. SWOT Analysis: Starbucks Starbuck’s management team has done a phenomenal job of ensuring that they dominate the domestic and international coffee retail markets. The company’s global presence is one of their strongest attributes. It could be argued that morning commuters, soccer moms and college students across the globe wouldn’t be able to get through their days without...
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...Introduction Starbucks is the biggest coffeehouse multinational corporation in the world. This corporation started out as a retailer solely of whole bean coffees. On a trip to Italy in 1983, Mr. Howard Schultz, an employee of Starbucks, was inspired by the numerous coffee bars in Milan. Upon his return to Starbucks he presented the idea to expand the company into a coffee bar. Mr. Schultz’s idea was rejected, and he parted from the company to start his own coffee bar. After years of great success he purchased Starbucks name and all of its assets. Their coffee service system was built on three principles, which were: hospitality, education, and production. The company is now considered “a premier roaster and retailer of specialty coffee, and operates in more than 50 countries through its company-owned stores as well as licensed retail stores” (Datamonitor, 2011 p. 4). Through a SWOTT analysis, we will see some highs as well as lows of Starbuck along its journey of being a Fortune 500 company. Strengths Diverse product portfolio Knowledgeable employees Brand Image and presence in other distribution channels Customer bond through value-added services Opportunities Entry into the health food market Emerging international retail markets Expanding in the single-serve coffee market Weaknesses High sales costs Weakening US segment Brand image affected recalls Threats Competition Rising prices of supplies and commodity Economic state of US ...
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...Company Overview • CEO Howard Schultz joined in 1982 • Company became public 1992 • Over 16,000 stores in 50 countries 1 Mission Statement • “Inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” – Starbucks, 2010 2 Primary Issues • Coffee bean prices • Increased competition • Drastic changes in company culture – Employees & Standardization 3 Macro Environmental Issues • Political - Taxation policy (coffee beans), politics with countries • Economic – Economic state (Depression), growth rate, currency exchange rate, Emphasis on service • Social/Demographic – demographics, income, working conditions, age, health conscious, convenience • Technological – Research and Design, distribution centers • Legal – Employment Laws, Health and Safety, regulations • Environmental – Pollution, Environmental groups • Global – Recycling, Political Stability, Cultural differences 4 Industry conditions So what? 5 SWOT STRENGTHS • • Wide range of coffee products sold globally R&D capabilities leveraged to strengthen product portfolio (innovation) Strong customer base/following (quality) Strategic supplier positioning WEAKNESSES • Retail price • Overexposure of stores • • OPPORTUNITIES • • • Reduction of cost through economies of scale (closure of stores, globalize) Market other products different from coffee (cross selling food, products Green Perception THREATS • • Rapid expansion...
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...(internal) Starbucks has become one of the strongest and most popular brands in there industry. The company has grown dramatically over the years and has developed a loyal customer base that continues to grow domestic and international. Starbucks strong brand image has given them the opportunity to partner and acquire companies such as Seattle’s Best Coffee, Teavana, and Green Mountain. Starbucks has a strong competitive position in the limited service restaurant industry, and that is why they are using (related) diversification to grow and expand their company. Store Expansion International Opportunity (external) Starbucks has great growth potential internationally. Markets like Indian, Africa, and the Middle East are prime locations for expansion. These countries’ economies and middle class are growing much more rapidly than developed nations like the US. Starbucks should expand their product line to fit the customers taste and needs. Starbucks could also use their strong brand image to partner with existing companies in the area because this would give Starbucks creditability among locals. Starbucks needs to invest research and money into understanding the market and culture they want to pursue. These actions can lead to Starbucks having a competitive advantage and a major opportunity for growth globally. Information Technology Weakness (internal) Starbucks has always appeals to the young business and tech savvy consumer. Ironically though Starbucks information technology...
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...Starbucks Starbucks is an extremely well-known business, which most of us enjoy on any given day (some more than others). In my own opinion, Starbucks is highly successful company because they provide such a high quality product. All of their employees appear to be knowledgeable about their products and enjoy creating those products for customers. However, the prices tend to be on the high side, and I can only indulge on their coffees every now and then. Strengths Starbucks has many internal strengths, which are visible to the public. Starbucks values and appreciates its employees, unlike many other businesses. Howard Schultz fought to get all part-time employees the health benefits that full-time employees were receiving. This shows how much he valued his employees, and makes Starbucks a more desirable workplace. If you have ever been to a Starbucks, you are well aware of the type of atmosphere the company provides. This is a major strength for the business because there are not many other companies that provide this type of experience (at least in the U.S.A., in my opinion). The mere experience of being in a Starbucks café is unlike most other coffee shops. The positive treatment of their employees is detectable in the customer service and the quality of their products, and it keeps consumers coming back. Weaknesses Even though Starbucks has many strengths, they also have some weaknesses as well. One weakness would be the pricing of their products. Although their products...
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...Week Four Starbuck’s SWOT Analysis Karen Mueller Upper Iowa University Chris Worley 11/12/2014 A SWOT Analysis of Starbuck’s Organizational Introduction Starbucks got its start in 1971 by three academic teaching professionals. English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, all three love coffee and decided to open Starbucks Coffee, Tea, and Spice in Pikes Place Market, Seattle Washington. The three partners shared a common love for fine coffees and exotic teas. They believed they could build a customer base in Seattle that would appreciate the best coffees. With this being the case, they borrowed the money and Starbucks’ was born. Since the first stores grand opening, Starbucks has made the fortune 500 list, they had a goal of opening 30,000 stores by 2013 and half of those are going to be outside the U.S. (Starbucks, 2014) Starbucks is the largest coffeehouse chain in the world with presence in 50 countries and about 15000 stores (Starbucks, 2014). The Seattle based company sells espresso based hot drinks; drip brewed coffee, coffee beans, snacks, Panini and pastry (Starbucks, 2014). The company also sells items such as tumblers and has an entertainment division which markets music, books and films. The company has diversified on its product range in order to gain a competitive advantage over other similar companies. According to Starbucks, (2014). Starbucks Corporation is a dealer in coffee retailing, its product is known as specialty...
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...Introduction Starbucks is a famous coffeehouse. Until the mid-1980s it was only a provider of coffee to fine restaurants. Thereafter Howard Schultz, director of retail operations and marketing, was impressed of the popularity of coffee in Milan while he was in Europe . His idea was born. He wanted to bring the coffee bar culture to the Americans. So Starbucks started to realise his idea and so created a new trend. The clue is not only to sell coffee, but to sell an experience. Today Starbucks has got about 20 million customers each week in about 5500 coffeehouses all over the world . While haunting to increase sales more and more, Starbucks has got a special growth strategy. They open a lot of stores in a very short period of time, expanding numerous food offerings and also getting into new segments, for example supermarkets. They develop new products like bottled coffee or Starbucks-flavoured ice cream. In addition to that, Starbucks tests new coffeehouse concepts, for example with live music. Since a few years, Starbucks opens more and more stores outside America. The important question is, if Starbucks’ growth rate will continue within next years because on the one hand critics say that Starbucks grows too fast and is loosing the focus while on the other hand some critics compare Starbucks’ coffee with Mc Donald’s´ hamburger and believe that they will grow up more and more as the dominant player on this market . With the help of the SWOT analysis and the BCG matrix...
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...The Global Rise of STARBUCKS from casual coffee drink to a Gourmet Beverage Andrew W. Knowles DeVry University Professor: Michelle Lawson Management 303 SWOT Analysis Abstract As we trace the halls of “father time” there we come across a company that may not have the rich history of serving North America and the rest of the world for over 100 years. Or cannot be traced back to the establishment of our constitution, providing a strong wake up call to our founding fathers as they crafted the declaration of independence during the 1800’s. But what we find in history is a company that took its humble beginnings at Pike’s Place and crafted a casual drink into the world’s most recognizable brand. Whose customer base are loyal to the brand, and whose logo stands apart from all others. It has weathered the storms of a down economy, poor management, competition, weaknesses and threats to define its own brand and category. CEO Howard Schultz said “Starbucks is committed to evolving and enhancing our customer experience with innovative and wholesome food offerings”. Starbucks History Starbucks opened its first store in 1971 in Seattle’s Pike’s Place Market. At its inception it was a retailer of whole bean, ground coffee, tea and spices. Today that one store has blossomed to over 20,000 stores in 65 countries brewing the best coffee arguably by many of its loyal customers. Starbucks got its name from the first mate in the Herman Melville’s Moby Dick story, and its logo from...
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...Swot Analysis- Starbucks Co. SWOT Analysis Strengths Starbucks Corporation is a very profitable organization, generating revenue of about $7.8 billion in 2006. During the same year, revenue from company-operated retail locations accounted for 85% of the company’s total revenue. • Starbucks has an established a logo, developed their brand, trademarks, copyrights, and a webpage. • It is a global coffee brand that consists of about 9,000 locations all over the world, including in the United States • The company’s goal is to build a strong relationship with their customers by greeting them or with nice gestures, which made their customers feel important. This is why Starbucks has chosen to invest in in-house training and retention for their employees. As a result, the company has become one of the most stable and customer-oriented employees to serve their daily customers. • Besides building strong relationships with their customers, Starbucks has written policies to encourage open communication between employees and managers. The working relationship helps to motivate the employees to be more efficient in performing the job duties. • Starbucks improved their technology by using software developed by a stuffing management technology system called Taleo. With this technology, Starbucks has the ability to maintain a database of hundreds of thousands of candidates that applied for jobs. This technology helped the company to increase its efficiency in screening...
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...SWOT Analysis Strengths Starbucks Corporation is a very profitable organization, generating revenue of about $7.8 billion in 2006. During the same year, revenue from company-operated retail locations accounted for 85% of the company’s total revenue. • Starbucks has an established a logo, developed their brand, trademarks, copyrights, and a webpage. • It is a global coffee brand that consists of about 9,000 locations all over the world, including in the United States • The company’s goal is to build a strong relationship with their customers by greeting them or with nice gestures, which made their customers feel important. This is why Starbucks has chosen to invest in in-house training and retention for their employees. As a result, the company has become one of the most stable and customer-oriented employees to serve their daily customers. • Besides building strong relationships with their customers, Starbucks has written policies to encourage open communication between employees and managers. The working relationship helps to motivate the employees to be more efficient in performing the job duties. • Starbucks improved their technology by using software developed by a stuffing management technology system called Taleo. With this technology, Starbucks has the ability to maintain a database of hundreds of thousands of candidates that applied for jobs. This technology helped the company to increase its efficiency in screening out the potential...
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...Substitutes……………………………………………………………..7 Opportunities and Threats……………………………………………..8 Internal Analysis………………………………………………………………..8 Strengths………………………………………………………………8 Weaknesses…………………………………………………………...9 Value Chain, VRIO Framework, Core Competencies……………….10 Key Strategies………………………………………………………………….11 Investment Recommendation………………………………………………….12 References…………………………………………………………………….13 2 Executive Summary Starbucks Coffee Company, founded in 1971 is headquartered in Seattle, WA and operates in 37 countries around the world. The backbone of Starbuck’s business is its company-operated retail stores. Starbucks has employed a strong differentiation strategy in order to turn a traditional $.50 commodity into a $4 experience. This following report provides an analysis of the strategies used by Starbucks to stay on top of its growing and volatile industry. Starbucks’ governing principles are based on three strategic stances: the third place experience, creating a human connection, and providing a quality everyday experience for customers. The specific strategies used by Starbucks include: • Horizontal Integration: acquisitions of Seattle’s Best, Torrefazione Italia and Coffee People • Market Penetration: differentiation and product placement outside of retail stores • Market Development: educating the consumer about specialty coffee • Concentric Diversification: release of bottled drinks, Ice Creams, and Liqueur • Conglomerate Diversification: expansion into music and...
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...STARBUCKS HISTORY As with any corporation in America or throughout the world, Starbucks started out as a dream or a vision ready to be delivered to the world. Starbucks was born in the early seventies (Starbucks, 2005). In 1971, three friends, Jerry Baldwin, Zev Siegel, and Gordon Bowker got together on numerous occasions to discuss what type of business would be successful during their time. During the early 1960s coffee was a major success in the US Market; however, overtime the popularity declined due to the dreadful taste of the coffee. Jerry, Zev, and Gordon together had the opportunity to travel to Europe where they had the chance to indulge in the dark, rich coffee made there. It was not until Jerry visited a coffee store in Berkley, California that he was reminded of their trip to Europe and of the luscious coffee there. Moreover, this convinced the three friends that they should embark in opening a gourmet coffee shop. The three friends followed the appropriate procedures for establishing their vision. When asked to for the name of the company they were unsure and deliberated for names. They finally agreed to name the shop after Seattle’s seafaring heritage, Starbucks. However, it was also said that they named it after the coffee loving first mate Herman Melville’s Moby Dick (Starbucks, 2005). Starbucks was no longer a dream or an idea but an organization in the making. By the 1980s, four stores were up and successfully running in Seattle. It was...
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...Background + Category Starbucks Corporation is an American coffee company. It falls under the restaurant category. It operates as a marketer, roaster, coffeehouse chain and it is the world’s leading specialty coffee retailer. It retail products includes more than 30 types of the world’s top coffee beans, handmade espresso coffee, a variety of hot and cold beverages, fresh food and delicious pastries, coffee machines, coffee mugs and other merchandise. The first Starbucks was founded in 1971; it was a single store in Seattle, Washington. It did not sell brewed coffee and espresso, but only coffee beans. In 1983, Howard Schultz, a former employee of Starbucks traveled to Italy and attracted by Italian coffee bars and the romance of the coffee...
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...Starbucks is a leading company and a niche in the coffee business, especially popular in the United States, Canada and Japan. Since inception in 1985, its growth has been attributed to its national and global expansion strategies, innovative product development and increasing sales in current markets (Starbucks Corporation, 2009, p.1). According to the 2009 annual report (Starbucks Corporation, 2009, p.2), the company’s 16,635 stores in over 50 countries generated $9.8 billion in revenue, a figure indicating a negative growth in sales. As a result, current restructuring efforts by CEO Howard Shultz aimed at increasing revenue to $23 billion by 2012 (Helm, 2007, para.4) have necessitated an evaluation of the business model and growth strategy. In this report, we will perform a SWOT analysis on Starbucks, followed by recommendations that can be implemented to improve the sales and strategies of the firm. 1.1 S.W.O.T Analysis Strengths * Starbucks has developed to outshine other coffee retailers in the market through its outstanding financial performance, and the ability to maintain its high end standards of offering premium and exotic coffee beverages. * They have managed to develop a “Starbucks culture” amongst customers by creating an atmosphere that makes the customers feel sophisticated, welcomed and more knowledgeable of their product information. When the customers feel that they are of top priority, it also helps to create a strong sense of loyalty...
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...the world. Since 1996, coffee consumption witnessed a steady rise reaching 85,000 tons in 2005. According to the statistics show that, although tea is famous in India, but also the world's fifth largest coffee exporter. All these facts prove the Indian coffee market has the potential for Starbucks to explore. 2. Political effects The Indian economy has been experiencing more stability as far as the Government and political scene is concerned. There had been reduced internal turmoil resulting from political influences and this has created a better working environment for industries and business in India. 3. Lifestyle trend Similar to China, India is also a mainly tea drinking country. However, Indians regard drinking coffee and experimented with various flavors as a fashion statement. It’s more like a lifestyle attitude, which is just accord with Starbuck’s concept of ‘selling a experience’. Threats: 1. Competitor intentions There are many competitors in the Indian coffee market as case stated. All these competitors entered Indian market before Starbucks, thus they have established a certain degree of basis already. Besides the coffee market, Starbucks also has to compete with other traditional Indian tea companies. 2. Joint-venture Model 3. Diseases |External Factors |Weight |Rating |Weighted Score |Comments | |Opportunities ...
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