Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
Starbucks is the biggest American coffeehouse chain that works in 31,256 stores across the globe. It is the world’s largest coffeehouse chain, established in Seattle, Washington in 1971. In this post, we are doing the SWOT Analysis of Starbucks.
Starbucks is no longer a coffeehouse but it is more than a coffeehouse and a possible third place between home and work. At present, there are 87k promising drink combinations at Starbucks. The current CEO of Starbucks is Kevin Johnson.
Company Name: Starbucks
Founded by: Gordon Bowker, Zev Siegl, Jerry Baldwin,
CEO: Kevin Johnson
Year established: 1971
Headquarter: Seattle, USA
Number of Employees (Sept 2019): 346,000
Type: Public
Ticker Symbol: SBUX
Market Cap (Feb 2020): $ 99.59 Billion
Annual Revenue: (Sept 2019): $ 26.51 Billion
Profit (Net income) (Sept 2019): $ 3.60 Billion
Subsidiaries: Teavana, Evolution Fresh, Seattle’s Best Coffee
Products & Services: Coffee | Handcrafted Beverages | Fresh food | Non-food items | Packaged goods | Mugs and accessories | Gifts
Competitors: Costa Coffee | McDonald’s McCafe | Dunkin Donuts | Café Coffee Day | Tim Hortons | Costa
Did you know?
Around 87,000 drink combinations are available at Starbucks.
Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
SWOT Analysis of Starbucks:
Following is the SWOT analysis of Starbucks.
Starbucks Strengths:
- Powerful Brand Image:
No doubt Starbucks is one of the most famous and powerful brands in the beverage industry. With a brand value of $11.7 Billion, Starbucks kept growing in size, volume, and the number of loyal buyers.
- Powerful Financial Performance:
Starbucks has a powerful financial performance with yearly revenue of $26.5 Billion and a net profit of $3.6 Billion in 2019.
- Expansion in Stores:
According to research, the growth in stores of Starbucks has increased from 1886 to 31256 in the middle of 1998 and 2019.
- Extensive Global Supply Chain:
Starbucks is well known to have a wide international network of providers. Three coffee-producing areas such as Asia-Pacific, Africa, and Latin-America provide coffee beans to Starbucks.
- Possessions:
Recently, the company has purchased the top six companies including Evolution Fresh, Seattle’s Best Coffee, Teavana, Tazo, Torrefazione, and Italia Coffee. These possessions have confirmed pretty victoriously for Starbucks.
- Sensible Diversification:
Starbucks also introduces moderate diversification in beverages and food items. In recent times, they introduce ice cubes made of coffee which outcomes in a stronger coffee taste.
- Excellence, Flavor, and Standardization:
Starbucks has gained huge popularity in recent times because of its quality blends and luscious coffees. This globally famous coffee company provides ultimate taste, quality, and consistency in its products.
- Competence, Calculated Planning, and Reinvestment Plan:
The main strength of Starbucks is its Strategic planning and working efficiency. The company reinvests its incomes in growing its business in various locations of the world. This thing helps a lot of Starbucks to maintain its name and image.
- Employee Treatment:
Starbucks treats its employees very well which results in more contented employees serving consumers well. Starbucks is in the list of Fortune’s Top 100 Places to work.
- Gender Unbiased Toilets:
Recently, Starbucks introduces gender-neutral toilets to protect LGBT (Lesbian, Gay, Bisexual, and Transgender) society against inequity. This is due to the Anti-LGBTQ bill that classifies against transgender people.
Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
Starbucks Weaknesses:
- Expensive Rates:
The high prices of Starbucks products are not affordable for working and middle-class people. Their prices are expensive than McDonald’s and other coffee shops. They should revise their pricing policy to make Starbucks even more successful.
- Limitation of New Products:
Truly speaking, Starbucks does not possess the most exceptional products in the circle. This can be a weakness of Starbucks because other coffeehouses offer almost the same products such as McDonald’s McCafe and Dunkin Donuts.
- Universal Standards for Most Products:
Starbucks provides generalized products all over the world. These offerings are not associated with cultural standards and customer preference.
- European Tax Avoidance:
Starbucks had faced a lot of backlash and controversies due to tax avoidance in the UK. Reuters disclose that it did not pay tax on its £1.3 Billion of sales in 3 years.
- Procurement Practices:
Most of the social and environmental campaigners criticized Starbucks for their immoral procurement practices. The activist claimed that the company obtains coffee beans from poor third-world farmers. This is against the ‘’Fair Coffee Trade’’ rules.
- Recall of Products:
Starbucks recently recalled a lot of in-demand products to its system. This thing has damaged the brand image badly and direct to the loss of the consumer base. Starbucks recalled 2 products such as sausage, egg, and a cheddar breakfast sandwich, and the other was the cheese and fruit bistro box. During usual testing, it was founded that the breakfast sandwiches had the existence of Listeria Monocytogenes on the surface. And on the other hand, some traces of cashew nuts were found on the bistro box. No caution label shows the existence of cashew nuts. This could be risky for the community with cashew allergies.
Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
Starbucks Opportunities:
- Growth in Developing Markets:
Starbucks has a lot of branches in the US. It’s a big opportunity for Starbucks to open more coffeehouse chains in India, China, and a few areas of Africa because these areas can give a great profit.
- Business Diversification and Products Specifications:
With diversification, Starbucks can generate great revenue and opportunities. They should develop products according to consumer preferences. This is a great opportunity to make Starbucks more profitable.
- Introducing Latest Products:
Starbucks is a popular coffee brand, but introducing new products under its banner would be money-making.
- Joint Ventures or Alliances with other Firms:
Co-branding is a helpful tool to make your brand more popular. Starbucks should develop alliances or partnerships with major companies. In this way, they can build up their company and market share.
- Gender Unbiased Toilets:
Recently, Starbucks introduces gender-neutral toilets to protect LGBT (Lesbian, Gay, Bisexual, and Transgender) society against inequity. This is due to the Anti-LGBTQ bill that classifies against transgender people.
Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
Starbucks Threats:
- Contest with Low-cost Coffee Suppliers:
At present, most of the coffeehouses provide reasonable products in the market. This can be a serious threat to Starbucks. So, Starbucks should revise its pricing policy to maintain its customer base.
- Competition with Big Outlets:
Multinational companies like McDonald and Dunkin Donuts can also a big threat for Starbucks to steal its fan-base and engagement.
- Replication:
Competitors can sell fake coffee and products to damage your brand name and image.
- Independent Coffeehouse Movements:
Currently, Starbucks faces many socio-cultural threats. These movements help small and neighboring coffeehouse and resist the development of big multinational companies.
- Controversy on California Warning Rule:
In March 2018, a California judge ruled Starbucks and similar companies to mention warning labels on their products. This thing also damages the image of Starbucks.
- Philadelphia Arrests:
In April 2018, the Starbucks employees refused 2 people to use the toilets because they didn’t buy anything. This can cause great controversy and these people are arrested at Starbucks. This event also harms the brand name.
- Coronavirus Epidemic:
Due to this Coronavirus, Starbucks provisionally closed 2000 stores in China. The total number of Starbucks stores in China is 4123, this means half of them are closed. It will have an unconstructive impact on their financials.
Starbucks SWOT Analysis 2020 | SWOT Analysis of Starbucks
Recommendations:
Starbucks should introduce innovative ideas and products in the company to maintain its market share and revenue.
- Introduce new products and better services.
- Introduce technological advancements in the business.
- Address serious issues or problems wisely.
- Revise prices and attract more consumers.
- Execute creative marketing movements, activities, and strategies.
- Donate to community development and participate in CSR and sustainability practices.