SWOT Analysis of Starbucks In Depth Detail | Popular Coffee Co

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For decades, Starbucks has been one of the biggest and most popular brands of coffee and other refreshments. It is known to be the most famous and leading brand in the production of coffee in America. This company is well-known in the United States, and in 2022, it had more than 32,938 locations around the world.

As a result of Howard Schultz’s foresight, the coffee brand has evolved into something beyond a coffeehouse. Over the years, it has become a public place and a go-to spot between home and work. It offers services such as cold and hot beverages, including banded goods, such as mugs and coffee machines, as well as bagged coffee beans, which are also available from the firm.

Apart from the above services, other products and services offered by Starbucks include a wide range of souvenirs, including cups and drinking accessories, food products, and many more. Some of the major competitors of Starbucks include Panera Bread, Café Coffee Day, McDonald’s McCafe, Dunkin’ Donuts, and Costa Coffee, Costa, and Tim Horton’s.

In this article, we are going to walk you through SWOT analysis of Starbucks (the strength, weaknesses, opportunities, and threats of Starbucks as a successful coffee brand).

The In-Depth of SWOT Starbucks

Starbucks’s Strengths

Companies must identify their strengths in order to understand the reasons behind their current success. Using their existing strengths, a company can also make sure some degree of advancement. For Starbucks to be one of the most well-known brands, it must possess a number of qualities that have contributed to its success:

Among coffee and beverage brands across the world, the firm holds the number one slot. This is owing to Starbucks’ exceptional financial performance over the years. Currently, Starbucks is worth over $4 billion, giving it a significant advantage over its rivals.

Starbucks’ fixed resources include a strong position in the global coffee and beverage business. It also has a high level of customer awareness of the brand, including competitive quality and an accessible price. All of these contribute to the excellent performance of Starbucks’ coffee industry.

Being the leading coffee brand at the moment, the corporation can afford to charge high and intermediate prices for its products in order to draw in more customers.

In a business where individual skills and soft skills are vital to success, the organization has a reputation for innovating in people management practices. Apart from this, Starbucks has created an environment where its employees feel valued and appreciated, which in turn results in better service for customers and more profits for the firm as a whole.

Weaknesses of Starbucks

To help counter their weaknesses, brands must be aware of them. Companies must devise strategies to eliminate their weaknesses, which threaten their long-term objectives. By altering a few of their strategies, multimillion-dollar corporations such as Starbucks are able to effectively work on the opposing side.

High product prices

A normal cup of coffee at Starbucks is more costly than at other cafés since there are so many alternatives to choose from. If you consider coffee a need rather than a luxury, making your own at home or at the workplace will save you money in the long run. Starbucks faces the daily challenge of dispelling the public’s misconceptions about its costs.
The average price difference between Starbucks and its competitors is 38%.

Unhealthy choices

Numerous Starbucks beverages are rich in calories and sugar, making them unsafe and unhealthy if drunk frequently. Consumers might choose a choice with fewer additives, but the corporation has built its brand on tasting and sweetened beverages that appeal to buyers’ taste buds.

A close examination reveals that the Starbucks Frappuccino cinnamon roll contains no less than 510 calories and 85g of sugar, which is more than the body requires.
Supply costs are volatile.

The cost of a brand’s coffee beans is closely related to the company’s prices. If the company claims to sell quality coffee drinks, it is likely to acquire beans of higher grade, and any rise in the cost of purchasing the crude coffee beans is usually reflected on the amount the consumer will buy it. This might lead to increased costs at the register, which could deter some consumers from coming into the store in the future.

Starbucks’ Products can be Copied Easily

Considering its close connection with coffee, the stock is indeed regarded as essential in many regions of the world. Coffee is drunk practically everywhere, with dozens of big chains and hundreds of smaller eateries selling coffee as one of their menu items, with most people buying straight from the store.

For this reason, Starbucks needs to focus more on promoting itself as the top option over choices that may cost significantly less to consumers.

Product recalls

If product recalls are not addressed quickly and appropriately, they can have a serious impact on any food or beverage firm. A company that sells a product containing foreign pollutants or allergens could face a PR crisis. To keep its brand presence from suffering more harm, it must take efforts to stop errors and to rectify mistakes that have already been made.

Due to the presence of allergens, Starbucks cancelled two food products in 2016.

Opportunities for Starbucks

The most important component in ensuring the firm’s overall development and expansion is to fully exploit all available chances. Several well-known coffee suppliers are quickly emerging steadily. Therefore, in order to remain in the competitive global marketplace, Starbucks must identify its opportunities:

Online Platform

Many organizations and corporations have been forced to move their operations online due to the pandemic and global catastrophe. If Starbucks wants to increase sales, it needs to work for the betterment and promotion of its products through the internet.

Meal Delivery Service

Starbucks could follow the lead of famous companies such as Uber Eats and provide delivery service in tandem with the rise of the online platform. There has been a noticeable increase in the number of enterprises and corporations that offer meal home delivery. Uber Eats is used by the coffeehouse brand to provide delivery services. Online delivery services are expected to grow by 97%, based on one projection.

Coffee Subscription

Other companies, such as Panera Bread, provide consumers with the coffee-free option. Starbucks needs to offer similar services if it wants to grow its customer database.

Differential Pricing

Some of Starbucks’ goods and services are competitively priced, and some consumers choose to purchase the less costly items. Instead of focusing only on high-end products, the company could release limited-edition products for those who care more about price.
Some micro firms are expanding their consumer base by providing a variety of items at varying price points in order to attract the attention of other customers. Starbucks could explore providing goods with low, medium, and high pricing points.

Threats to Starbucks

The firm faces challenges from the growing cost of beverages and is exposed to economic risks resulting from price volatility of the essential product. Also, the rise in the price of food has a bad effect on the company and threatens its ability to stay in business.

The firm is troubled by copyright violations by lesser-known competitors that desire to capitalize on its reputation. Starbucks, like other major merchants in emerging economies, has litigated against people who try to distort its name and iconic emblem.

In terms of specific customer categories, the corporation confronts significant rivalry from localized coffeehouses. In the same vein, the firm confronts stiff competition from local retailers frequented by a devoted customer that is not fond of major brands.

As previously stated, Starbucks has major problems due to its worldwide supply chain and is susceptible to supply chain interruptions which is the major problem of many beverage firms.

FAQs

What strategy is used by Starbucks?

The marketing strategy of Starbucks can be characterized as a differentiation strategy. Consequently, the coffee giant concentrates on the quality of its goods, and customers are willing to pay more for quality.

What are Starbuck’s key success factors?

Starbucks, a leader in the coffee industry, benefits from a number of crucial success factors. Sales promotion, expansion, innovation, training and recruiting and brand, experience & image are among these. Starbucks’ initial market positioning was based on its superior quality and excellent collection.

What is Starbucks’ main competitive advantage?

Starbucks’ competitive advantage is aided by its excellent customer service. Starbucks’ focus on providing excellent customer satisfaction has enabled it to emerge as one of the industry’s leading companies.

Conclusion

In conclusion about the SWOT analysis of Starbucks, we can say that Starbucks is a successful coffee brand with strengths in its coffee, marketing, and hiring practices. However, it also has weaknesses as well as opportunities that could make it a big player in the coffee industry.