Public Domain Starbucks Coffee Company, founded inhas grown to an international brand. Despite its current industry leadership, Starbucks must continue monitoring its remote or macro-environment. Regional integration of markets opportunity Improving governmental support for infrastructure opportunity Bureaucratic red tape in developing countries threat Regional integration is a current trend and external factor that presents an opportunity for Starbucks to globally expand. Also, most governments around the world are improving infrastructure, which creates the opportunity for Starbucks to access more markets or suppliers.
The company must innovate and use its strengths to address threats in the external business environment of the coffee and coffeehouse industries. Public Domain Starbucks Corporation also known as Starbucks Coffee Company maintains its position as the biggest coffeehouse chain in the world through innovative strategies that utilize business strengths in overcoming weaknesses to exploit opportunities and overcome success barriers, such as the threats in the coffee industry environment, as identified in this SWOT analysis.
As a member, you'll also get unlimited access to over 75, lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed. A Starbucks café in Toronto. Starbucks Coffee’s PESTEL/PESTLE analysis indicates that most of the external factors in the company’s remote or macro-environment present opportunities. The PESTLE analysis above proves that Starbucks has a quite stable external environment. The key reason behind this might be because it operates in the Food and Beverages industry. This means consumers might reduce consumption partially but will not stop buying completely.
The SWOT Analysis model is a strategic management tool that assesses the strengths, weaknesses, opportunities, and threats SWOT relevant to the business and its internal and external environment. In this business analysis case, the SWOT analysis of Starbucks Coffee considers the strengths and weaknesses internal strategic factors inherent in operations in the coffee, coffeehouse and related businesses.
Such a competitive environment requires that the company continuously improve its business strengths to optimize its financial performance and growth trajectory. Starbucks Coffee operates in various industries that impose different challenges in growing the business.
The variety of these industries has increased over time, as the company develops more products to complement its core coffeehouse business. In the context of the SWOT analysis model, this condition creates a challenging business environment where the company needs to use different sets of competencies that match various industries.
The company has a growing population of loyal customers, which adds to the stability of the coffeehouse business. In the SWOT analysis model, the extensive global supply chain strengthens Starbucks by supporting operations. For example, the company has a global network of suppliers that are carefully selected based on criteria pertaining to quality, such as the quality of Arabica coffee beans.
Diversification minimizes the effects of market and industry risks.
The internal strategic factors identified in this part of the SWOT analysis of Starbucks Corporation shows that the business has strengths that promote resilience through diversification and a global supply chain.
Weaknesses are internal factors that reduce or limit business capabilities. High price points Generalized standards for most products Imitability of products Starbucks has high price points that maximize profit margins but reduce the affordability of its products.
Also, this SWOT analysis considers generalized standards a weakness that limits the flexibility of the coffee and coffeehouse chain business. In addition, many Starbucks products are imitable. This business environment condition empowers competitors.
Opportunities for Starbucks Corporation External Strategic Factors This part of the SWOT analysis model focuses on external factors that present opportunities for business growth and development. In this case, the main opportunities available to Starbucks Coffee Company are: Expansion in developing markets Business diversification Partnerships or alliances with other firms Starbucks Corporation can increase its revenues through expansion in developing markets.
This opportunity draws attention away from the U. For example, through higher diversification, the company can reduce its dependence on its current industries, thereby improving overall revenue growth opportunities.
The external strategic factors in this part of the SWOT analysis show that Starbucks can improve its industry position by developing its operations to exploit the opportunities in the global industry environment.
Threats are external factors that reduce or limit business performance. In this company analysis case, the following are the main threats relevant to Starbucks Coffee Company: Competition involving low-cost coffee sellers Imitation Independent coffeehouse movements Starbucks Corporation competes against a wide variety of firms in the international market.
For example, the company competes against major restaurant chains that offer low-cost coffee products. Also, this SWOT analysis considers imitation as a major threat against the coffeehouse business. In addition, the industry environment is subject to independent coffeehouse movements.
These movements are sociocultural efforts that support the operations of small independent local coffeehouses, and oppose the expansion of multinational coffeehouse chains. Successful marketing campaigns and branding strategies are needed to counteract the effects of these trends. This part of the SWOT analysis of Starbucks Coffee Company identifies external strategic factors that impose challenges to international expansion and market penetration.
The coffeehouse chain business faces issues such as competition, imitation, and social trends that oppose international players in local markets. Based on the current condition of the business, some of the most notable strategic management concerns enumerated in this SWOT analysis of Starbucks Coffee Company are the imitability of products and the corresponding threat of imitation, the threat of competition involving low-cost sellers, and independent coffeehouse movements.
It is also recommended that Starbucks Corporation consider pricing strategies that attract more customers. For instance, bundle pricing can help address the threat of competition involving low-cost sellers.
Such an image can help reduce sociocultural opposition against the company. These recommendations focus on minimizing the negative impacts of the internal and external factors enumerated in this SWOT analysis. Exploring SWOT analysis-where are we now?The preceding analysis proves the point that Starbucks is operating in a relatively stable external environment.
The main reason for this is the fact that it operates in the Food and Beverages space which means that despite the recession, consumers cut down on the consumption to a certain extent and not completely.
Mini-Case on the Starbuck Corporation (SBUX) What Starbucks strategies are best? There is only so much revenue that coffee, lattes, and pastries can bring in, so Starbucks. 2) External Environment Of The Retail Market For Coffee & Snacks: ) Industry Overview and Analysis: Starbucks primarily operates and competes in the retail coffee and snacks store industry.
A Starbucks café in Toronto. Starbucks Coffee’s PESTEL/PESTLE analysis indicates that most of the external factors in the company’s remote or macro-environment present opportunities.
(Photo: Public Domain) Starbucks Coffee Company, founded in , has grown to an international brand. The United Nations Global Compact is a non-binding United Nations pact to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation.
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