Published by MBA Skool Team, Last Updated: August 26, 2021
SWOT analysis of Starbucks analyses the brand by its strengths, weaknesses, opportunities & threats. In Starbucks SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.
SWOT Analysis is a proven management framework which enables a brand like Starbucks to benchmark its business & performance as compared to the competitors. Starbucks is one of the leading brands in the food & beverages sector.
The article below lists the Starbucks SWOT, competitors and includes its target market, segmentation, positioning & USP. Let us start the Starbucks SWOT Analysis:
For Starbucks, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position.
The strengths of Starbucks looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the SWOT Analysis of Starbucks :
1. Starbucks has excellent brand name and brand visibility across the globe and is synonymous with coffee chains and related customer experience
2. The company has younger demographics as its customer base helping it becoming popular and achieve scale faster
3. Excellent ambience and service are the hallmarks of any Starbucks store
4. Starbucks is one of the most popular coffee outlets in the world and is popularly recognized
5. Starbucks has own brands of food products and coffee
6. Starbucks logo and name has high brand recall
7. The company is one of the strongest franchises in the world
8. The company is recognized as a dependable brand by customers across the world
9. Starbucks has a unique way of connecting with customers by writing by their names of the coffee cups which is part of the overall customer experience
10. Starbucks has extended globally in most of the major markets and has strong supply chain network which enables them to get their own ingredients maintaining the quality across the globe at the highest standards
11. The quality of their core offerings like Flat white, cappuccino, latte etc. is very high and people are ready to pay for the quality and ambience
12. May people prefer coffee while travelling, Starbucks gives proper experience with good quality cups for people who want to carry their coffee out during travel and walking.
The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Here are the weaknesses in the Starbucks SWOT Analysis:
1. Menu items at Starbucks are often perceived to be expensive as compared to other chains and local players
2. Starbucks is still rising in a lot of newer markets like India
3. Health conscious customers have started to move to more health based beverages
4. Being a global chain, sometimes the expectation of prices and experience for local market can be very different from a market like US or UK
The opportunities for any brand can include areas of improvement to increase its business. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Following are the opportunities in Starbucks SWOT Analysis:
1. Introduce cheaper versions of coffee based items so that the target audience can afford them better
2. Starbucks can tap the smaller towns/cities in newer markets
3. Could diverse their product not only in coffee e.g. Beverages like Tea are preferred in many markets like India, UK
4. Rising consumerism in emerging markets can lead to spend in services like good quality coffee
5. Home Delivery and Consumer products as during pandemic a lot of customers didn't go to office or outside
The threats for any business can be factors which can negatively impact its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. can be threats. The threats in the SWOT Analysis of Starbucks are as mentioned:
1. Threat from existing coffee chains and fast food outlets where coffee is offered along with other food items
2. Dependent on Government commodity rates
3. Global financial crisis which make peoples tend not to spend too much money.
4. Threats of substitute products and services include other drink items such as colas, teas or juices that are sold in retails.
5. Perceived ill effects of coffee consumption by many people.
6. Pandemic where people tend not to go out can severely impact business
There are several brands in the market which are competing for the same set of customers. Below are the top 5 competitors of Starbucks:
Commitment to the highest quality coffee in the world
People looking to go to have a coffee and snacks at a hangout place
Youth in the middle and higher income groups
A place where you can have a great coffee along with a great experience
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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