Starbucks Strategic SWOT Analysis

Melody McGuirk

January 10th, 2021

Starbucks! A coffee company that started small in Seattle’s ‘Pike Place Market’ in 1971 and is now the world biggest coffeehouse chain with over 30,000 stores worldwide.

With the help of this very interesting video called “Starbucks SWOT Analysis” by 365 Careers, I will conduct a brief SWOT Analysis of Starbucks and add my own input along the way.

You may be wondering, what is a SWOT Analysis? Well, it is a strategic planning tool that managers use to “identify those internal strengths and external opportunities that an organization can leverage to accomplish its objectives, while also seeking to mitigate internal weaknesses and external threats (Lewis and Littler, 1997).” [Leigh, D., 2009.]

Strengths

As you can imagine due to the huge success of the franchise, it has many strengths. The leading strength is their strong brand recognition. Starbucks has been declared the most recognizable coffee brand in the world with their signature logo, atmospheric coffee shops with free Wi-Fi and take away cups with commonly mis-spelled names.

Personally, I think that Starbucks’ baristas commonly mis-spell customers’ names as a free marketing tactic, customers would then post about their experience on social media, spreading the company’s name around, creating a buzz and increasing customer outreach.

Starbucks has over 30,000 coffee shops around the world which allows customers to easily find it when traveling abroad. I think this is very valuable, as customers will always return because they are familiar with the brand and have a good relationship with the company.

Weaknesses

Unfortunately, due to the huge amount of Starbucks coffee shops globally, there is a lack of personalization. They don’t customize their drinks according to the different geographical preferences they are in. I think this takes away from the individual experience of the customer and instead makes Starbucks appear more corporate.

Opportunities

Due to the huge success of the brand, Starbucks franchise managers can easily apply their current business model to new shops. I feel that this is a huge opportunity for Starbucks as it can allow them to quickly set up new franchises in different geographical areas and (hopefully) have a similar positive outcome.

I also think that Starbucks has been very smart to make agreements with movie producers for product placement. Depending on what deal they receive, this can be cheaper for them in the long run, rather than a large marketing campaign.

Threats

The main threat for Starbucks is that the American market (where most of their coffee shops are located) is completely overloaded with competitors. Some large competing franchises and many smaller, local coffee shops have saturated the market with very similar products/experiences as Starbucks.

Conclusion

I hope you liked reading my fourth blog post of this academic year. This blog was a little different than my previous ones, but I hope it was enjoyable nonetheless. As you probably know by now, if you liked this please leave a comment and share with all your friends. See you all next week for my second last blog!

References

Monticellllo. Composition with cup of Starbucks coffee [image] Available at https://stock.adobe.com/ie/images/composition-with-cup-of-starbucks-coffee/279977165 [Accessed on 17th January 2021]

Starbucks SWOT Analysis. 365 Careers. (2017). YouTube Video [Online]. Available at https://www.youtube.com/watch?v=mR9eICQJLXA [Accessed 17th January 2020].

Leigh, D., 2009. SWOT analysis. Handbook of Improving Performance in the Workplace: Volumes 1‐3, pp.115-140. Available at https://onlinelibrary.wiley.com/doi/abs/10.1002/9780470592663.ch24 [Accessed 17th January 2020].