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Starbucks Corporation’s Strengths, Opportunities, Threats Report

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Updated: Aug 5th, 2021

This SWOT analysis will focus on Starbucks Corporation, revealing its strengths, weaknesses, opportunities, and threats.

One of the strengths of the company is associated with a focus on emotions. Meeting new acquaintances, gathering experiences with old friends, seeking inspiration for new and positive changes, and traveling—all this makes customers closer to Starbucks. At the same time, the corporation engages completely different people beginning from people in business drinking espresso on the go to the enamored couples, stretching the pleasure of cappuccino (Chua & Banerjee, 2013). Starbucks also provides essential grounds for active freelancers and bloggers by creating an atmosphere that attracts people with laptops.

Along with great attentiveness to the customers, the company promotes social consciousness, collaborating with several non-profit organizations, initiating grants for young professionals, and supporting projects aimed at the progress of developing communities that produce coffee (Koehn, McNamara, Khan, & Legris, 2014). In other words, corporate social responsibility is one of the core priorities of the company that makes it competitive with its rivals. Speaking more precisely, it is possible to pinpoint that the bottom line of this is the social protection of employees, partners, and stakeholders.

For example, Starbucks formed an agreement with the University of Arizona so that employees can earn credits from an online college (Perez-Pena, 2014). According to the calculations made by The New York Times, this is approximately 30,000 dollars per student (Perez-Pena, 2014). Thus, the coordination of the two fundamental aspects, in particular, the commitment to high standards and high-scale inner values of the company contribute to strengthening the position of the brand and corresponds to corporate responsibility.

Among the weaknesses that are expected to impact Starbucks, one may note such internal challenges as higher price points and generalized standards for products. The first challenge deters a plethora of people, making them decide in favor of some other cheaper coffee shops.

Even though Starbucks ‘ ethics, mission, and key values seem to be rather attractive for the customers, many of them prefer to save their money. One more weakness concerns the lack of a specific approach to the products of the company. In other words, this means that Starbucks is similar to coffee chains and shops, offering the same products. For example, prominent pumpkin spice lattes may also be served in other coffee shops, thus leading to the fact that Starbucks loses its uniqueness.

Considering that the modern world sets new opportunities in the context of globalization, Starbucks may expand all over the globe. Even though plenty of countries are already embraced by the corporation, such areas as Africa, India, and so on the present fruitful market for the expansion.

This opportunity is likely to provide the company with an increased volume of customers. At the same time, global expansion may present certain threats associated with the fact that every country has its own set of traditions and cultural peculiarities. Cooperating with foreign partners, Starbucks is at risk of losing its positions in one or another region. In this connection, it is of great importance to pay attention to the expansion strategy.

Also, there is the opportunity to start co-branding with some well-known companies to create a new product and grab the customers’ attention. For instance, collaboration with McDonald’s seems to be a great idea. In particular, this will contribute to the mitigation of fierce competition, existing between these two corporations. Another opportunity may refer to co-branding with some innovative company to create digital access to Starbucks. For instance, online ordering or reservation may be implemented to make Starbucks more accessible and closer to the customers. Mobile apps with the interactive menu and playlists also seem to be an advantageous opportunity to assist and enjoy the customers.

At the same time, several tough decisions need to be implemented to eliminate such threats as severe competition with the cheaper companies and specific market. Such coffee chains as Dunkin’ Donuts present a serious threat to the successful operation of Starbucks. Claiming that it offers high-quality coffee, Dunkin’ Donuts makes its prices lower than Starbucks does. Therefore, it becomes rather difficult to predict the customers’ future attitudes.

Furthermore, it should be noted that Starbucks was founded at a time when the popularity of coffee and tea was on the rise. Nowadays several independent coffee movements propose the reconsideration of large coffee houses. This may lead to the fact that the coffee market would become less popular and relevant, thus making Starbucks struggle in an attempt to attract customers. In conclusion, it is possible to point out the fact that, it is evident that there is a need to come up with a strong competitive advantage to eliminate the mentioned threats.

References

Chua, A. Y., & Banerjee, S. (2013). Customer knowledge management via social media: the case of Starbucks. Journal of Knowledge Management, 17(2), 237-249.

Koehn, N. F., McNamara, K., Khan, N., & Legris, E. (2014). . Web.

Perez-Pena, R. (2014). . Web.

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IvyPanda. "Starbucks Corporation's Strengths, Opportunities, Threats." August 5, 2021. https://ivypanda.com/essays/starbucks-corporations-strengths-opportunities-threats/.

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IvyPanda. 2021. "Starbucks Corporation's Strengths, Opportunities, Threats." August 5, 2021. https://ivypanda.com/essays/starbucks-corporations-strengths-opportunities-threats/.

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IvyPanda. (2021) 'Starbucks Corporation's Strengths, Opportunities, Threats'. 5 August.

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