SWOT Analysis of Starbucks

SWOT Analysis of Starbucks1. INTRODUCTIONThe sideline content is a expression study on Starbucks company whiz if the famous and well known cocoa berry shop in the world. This case study highlights closely the SWOT ANALYSIS PESTLE ANALYSIS PORTERS fivesome FORCESThe history of Starbucks takes us back in the year 1971. It is a manage mark of (SBUX) in Seattle. In the start it was a purchaser and roaster of entirely java beans. In the year 1970 the first Starbucks out let opened which put on to provide finest hot chocolate and coffee related products to the thirsty people of Seattle. In the year 1990 Starbucks went global expanding in the United States and soon baffle a publicly traded company. In 2000 the company expended in much than 15000 outlets in roughly more than than 15 countries.Starbucks mission statement is simple to revolutionize and nurture the human spirit one person, one cup, and one vicinity at a epoch2. Swot outline for Starbucks2.1 Strength* The Starbucks has a strong honorable values and in any case a strong respectable mission statement Starbucks is committed to a role of milieual lead in all facets of our affair a positive approach towards had do Starbucks one of the no1 specialty retailer.* The commercialise shargon and capitalization Starbucks owned 4596.6 meg and gross revenue findth by 20.9%* Starbucks holds a strong position in the foodstuff wherein they halt 8,500 shops owned by Starbucks directly and also around 6,500 shops on franchises and l ice-skating rinknces with excellent workforce and management that provide excellent proceeds to the node* In 2005 Starbucks was one of the fortunes in 100 companies to work for this was in the main beca practise of the well efficient organisation resource management.2.2 Weaknesses* The key weakness of Starbucks is their modify innovation and creativity that has limited them to coffee and coffee related products* As competitive stuff increases the lower price rivals such as Mc Donald or costa coffee rouse undercut the company salary as the Starbucks has premium fault with premium prices.* It only depends on coffee and coffee related products that give them a limited growth this criticises them from not using free trade products and a bad reputation from pressure group.* Since Starbucks is a US based company it mainly focuses on the domestic help markets of US though Starbucks had grown worldwide none planning on the markets outside the US can affect the targeted profits.2.3 Opportunities* Starbucks is global cooperation which sells coffee to astir(predicate) 16,000 coffee shops in over 35 countries, established relation with pepsi-co, barners and nobles, dreyrers ice cream and other major brands this gives them a probability to diversify.* Addition of more coffee products and expanding the menu gives them an opportunity to grow* Outside the domestic US markets in that location are a lot of opportunities for joint ventures.thr plan ning restrictions can be considered by reducing costs by relocating at tops(p) market chains, pubs and restaurant.* Become more of loving and environmental responsible brand by better public relation activity,fair trade policies and ethical sourcing practices* Licensing its notice through ambient coffee through super market that gives them an opportunity to increase their revenue.2.4 nemesiss* Downturn in the economy affects consumer spending, with less income to spend this has been the threats in the recent years.* Criticizing on the web site about companys fair policies, restriction relation and environmental hazards had a bad effect on the companies goodwill and has hence affected the revenue* The threats have been increasing by contention from national brands and recent entrants, this putting pressure on profit margins. Companies seeks new way to differentiate to retain customers.* Saturation in the coffee market can be the worst threat as the Starbucks in genuinely much linked with coffee and coffee related products3. Pestle compend for Starbucks3.1 Political- ongoing tensions in the Middle East and boycotts of American made products are strategic forebodings for Starbucks globalization plans. Starbucks also instants their coffee beans and thus any changes in import laws should also demand special attention.3.2 Economic- Economic factors basically concern the temper and direction of the economy in which a firm operates. Current nook has forced people to limit their spending hence this has affected the sales of Starbucks. Also the price hike in the commodities e.g. coffee beans which are used to make coffee in Starbucks has forced them to increase the prices of the coffee. Consumers dont find as much worth in spending $4.35 for a cup of coffee when they can purchase the same size coffee at 7-eleven for $1. 753.3 tender- Promoting the health benefits of coffee remains a challenge for the industry and consumers are often confused with the myths propagated by the media. Social concerns regarding caffeine and it addictive properties also need to be considered these days the people are so environment concern that the company should learn how to reduce their plastic waste and use recyclable items.3.4 Technological Factors -Starbucks has been continually looking for ways to enhance the customer experience. They have also expanded their partnership with ATT. ATT offered consumers Wi-Fi service in more than 7,000 Starbucks locations in the U.S. in spring of 2008 also the use of latest engineering science in brewing coffee beans to enhance the taste and flavour of the coffee served.3.5 Legal Labour laws( for e.g. increase in the minimum wage of employees)environmental law (e.g. ban on non recyclable cups and bottles used for take outside drinks).3.6 Ecological Factors- Starbucks also has a strong environmental mission statement. Starbucks promotes ethical sourcing as well and encourages the use environmentally friendly products . Starbucks uses key proceeding indicators to be sure they are measuring the degree to which they fulfil their social and environmental responsibilities. Starbucks should maintain abreast of any changing environmental ordinance that could impact their corporate strategies.4. Porters Five Forces AnalysisThe Porter 5 forces compendium is a framework by Michael E. Porter in 1979 for industry analysis and business strategy development to achieve its organisational goal. According to Michael porter there are 5 major factors which influence the business.* dicker power of suppliers* Bargaining power of purchasers* Threat by substitute products* Rivalry between competitors* Threat of new entrants to a market.Starbucks should consider the following4.1 Power of Suppliers Starbucks prides itself on its command principles one of which states, Our Coffee-It has always been, and will always be, about choice. Were passionate about ethically sourcing the finest coffee beans, roasting them wit h great care, and improving the lives of people who grow them. Therefore, in keeping with their mission and principles, Starbucks must(prenominal) ensure that the type and prime(prenominal) of coffee it offers is always the same. This means they would use the same suppliers that integrate their standards. An over-populated market could also give the suppliers more bargaining power. Starbucks need to be aware(p) of supplier power and potential price increases.4.2 Power of Buyers/Customers A buyer group is powerful if the industrys product does not save the buyer silver (Pearce and Robinson, 2007) This is a plus for Starbucks as their coffee products are higher in price and considered a luxury brand. Starbucks is much more concerned with the quality of their product versus price. However the other consideration is small local coffee companies that were around before Starbucks took over the marketplace. These smaller coffee shops may have their core customers who will not give the ir business to anyone else.4.3 Available Substitutes Starbucks must be aware of substitute products. Given the current grave economical crisis, consumers are vying towards less expensive shiftnatives than the luxury coffee Starbucks provides. This effect could alter Starbucks current set strategies. As more substitutes become available, the current pricing model would become more elastic since customers have more alternatives. authority substitutes include bottled water, healthy water/juice drinks, and at home espresso machines.4.4 Current Competitors While companies like Dazbog and Caribou Coffee appear to be the most obvious competitors, McDonalds and Dunkin Doughnuts are Starbucks tops competitors. Both these organizations can compete with Starbucks in terms of sandwich items and coffee related products. More of a concern with these two competitors is their pricing modules. Both competitors are priced less than Starbucks products.4.5 Threat of naked as a jaybird Entrants Sta rbucks provides a luxury good that consumers often scale back on when they want to save money. In 2007, Starbucks saw its shares fall more than 30% partly down to customers deserting it for cheaper rivals. As McDonalds and other chains like Dunkin Doughnuts escort the money in luxury coffee more companies will bring down to enter the marketplace offering similar product lines for less cost.5. reference bookTo conclude the Starbucks has done very well in the terms of business they have managed to grow within the industry in few years. autistic say this because from a single privately owned coffee rest home Starbucks was able to expand as a well known coffee bar internationally and they managed to keep their position in the market. Starbucks needs to keep a close watch on its competitors because of the risk for competitive pressure. Also it needs to develop new types of coffees to sustain the threats for subistutes and also from competitors. They also need to utilize their oppor tunities to greater extant to be more successful in the future.6.REFERENCE* education and financial management, swot analysis, pg 23,10th edition ( Trowbridge, Wiltshire, 2005)* Bob Nelson and Peter Economy, Managing for Dummies, 2nd ed. (New York Wiley, 2003)* Forbes Magazine. Forbes, S. (2005, celestial latitude 12). Whoda Thunk It? Coffee Is Hot. Forbes, pp. 33, 33. Retrieved whitethorn 15, 2009, from Business Source Premier Database* Starbucks. (2009b). Company Profile. Retrieved May 10, 2009, from http//www.starbucks.com/aboutus/Company_Profile.pdf* Moneyweek Magazine. Which firms can survive a storm? Tim Bennett, Nov 27, 2007 http//www.moneyweek.com/investment-advice/how-to-invest/which-firms-can-survive-a-storm.aspx* Brewing Battle Starbucks vs. McDonalds, from http//www.time.com/time/business/article/0,8599,1702277,00.html* Starbucks. (2009c). Our Starbucks Mission. Retrieved May 10, 2009, from http//www.starbucks.com/mission/default.asp* Starbucks 2007 Annual Report. Corpo rate Social Responsibility Brochure* Howard Schultz Chairman of Starbucks Corporation. http//www.marketingcrossing.com/article/220025/Howard-Schultz-Chairman-of-Starbucks-Corporation/* Regis University (2009). Strategic Management and financial Ratio Analysis. Columbus, OH McGraw Hill/Irwin