SWOT Analysis for Starbucks

1. ASHWIN JOSEPH, SJCBA BANGALOREBy;

2. Contents
 Company Overview
 Product Mix
 Innovations
 Strengths
 Weakness
 Opportunities
 Threats
 Problems
 Recommendations
SW
OT

3. Company Overview
 American Coffee company based in Seattle
Washington
 Founders: Jerry Baldwin,Zev Siegl,Gordon Bowker
 Number of Shops: 21,536
 Chairman and CEO: Howard Schultz
 Products: Coffee,Tea,Pastries,Frappuccino
beverages.
 Number of Employees: 1,91,000
 Net Income: US$ 2.068b (2014)
 Area Served: Worldwide

4. Product Mix

5. Innovations
 Partnerships with Coca-Cola have allowed Starbucks
to sell
 prepackaged beverages-flavored ice coffee, the
double shot (a canned espresso beverage), Starbucks
Refreshers,
 Ethos bottled water, and a variety of other household
items.
 Growth in single-serve products has yielded 10%
growth in this segment

6. Strengths
 Strong brand name
 Large retail distribution system
 Quality product
 Extensive product list
 Good supplier relationships
 Massive capital funding
 Valued and motivated employees

7. Weakness
 Dependence on single source of business/income
 Prices relatively higher than competitors
 Strong dependence on suppliers
 Merchandise sales in stores
 Over reliance on home market
 Aggressive expansion leading to failure

8. Opportunities
 Overseas business expansion
 Business expansion into untapped U.S.
markets
 Extension of brand name to new products and
business lines
 Product range diversification to more food
items

9. Threats
 Strong competitors with massive capital funding
capabilities like McDonald's and Dunkin Donuts
 Economic conditions may make consumers
unwilling to pay higher prices
 Political conditions overseas may limit business
expansion
 U.S. specialty coffee industry approaching
saturation

10. Problems
 Economic slowdown affects Starbucks’ business
 Enormous competition
 Dunkin Donuts, McDonald's, and Nestle in the US
 Costa Coffee and Caffè Nero in the UK
 Inadequate marketing strategy on advertising
 Coffee prices
 Global expansion barriers. Ex: India

11. Recommendations
 Distribution at supermarkets
 Must pursue focus strategy to increase its strength
 Enter into long term contracts