SWOT Analysis and the Brandâs External Environment
The so-called SWOT analysis method, in particular, the analysis of opportunities and threats, can shed light on Starbucksâs external business environment at the moment. In terms of positive environmental factors or opportunities, Starbucks, having its coffeehouses concentrated predominantly in the U.S., might benefit from international expansion strategies, including expanding to fast-growing economies with high coffee consumption rates. Another hypothetical opportunity pertains to the introduction of new seasonal or limited edition products, for instance, spicy coffee, Cafecito, or new ice coffee recipes. The chief threats or the external barriers to success might include the brandâs intense competition with multinational fast-food chains that offer various dishes aside from hot beverages, for instance, McDonaldâs. Competition from numerous smaller coffee shops and coffeehouses that have become more prevalent in the U.S. in recent years, thus changing the culture of coffee consumption, is another crucial threat to consider.
Implications for the Companyâs Marketing Mix
The points above might influence Starbucksâs strategies pertaining to the four elements of the marketing mix. In terms of the product, to address the increasing competition from local independent coffee shops, Starbucks may be urged to diversify the offer even more by adding new and extraordinary recipes, for instance, hot or cold coffee-containing beverages with pumpkin puree. As for the price, given that McDonaldâs emphasizes affordability, Starbucksâs reliance on the premium pricing strategy may need to be altered to increase the target audience. For instance, the brand might introduce a menu subcategory with two or three products having simpler recipes and less expensive ingredients and market them as the minimalistâs perfect choice to avoid stigmatizing some consumers as low-income clients.
Next, in terms of the place, since Starbucks might benefit from subsequent overseas expansion, it might need to alter the place-related strategy. For instance, expanding its presence in China and India and increasing the number of individual shops to be established in these locations might support revenue generation. Finally, with regards to promotion, intense competition from multiple smaller market entrants might require more intensive efforts linked with sales promotions. For instance, the brand might expand its Starbucks Rewards program and add âbring-a-friendâ opportunities for earning points.