SWOT Analysis And Core Competencies Of Starbucks

Q: What are the core competencies of Starbucks?

The core competence of Starbucks has been its capacity to effectively use their main product differentiation strategies by offering a top-notch  product mix of excellent beverages and snacks. More specifically we can say that Starbucks has following core competence:

They have a great quality product: they’re known to deliver the best coffee to their customers.

Better relationship with the suppliers: They have a better relationship with the suppliers who provide Starbucks with coffee and ensure it is a top notch.

Strong brand image: Starbucks is renowned worldwide for making the ultimate coffee experience for their customers, alongside that they pay extensive attention to the employees through providing them with necessary training and thinking about the qualities of them.

 

Q: What is the SWOT analysis of Starbucks?

The SWOT Analysis model is a strategic management tool for any organization that assesses the strengths, weaknesses, opportunities, and threats (SWOT) which is 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. The analysis also considers the opportunities and threats (external strategic factors) related to the competitive landscape.

Strength:

In this case, Starbucks Coffee’s main strengths are:

       I.          Strong brand image: It is the most popular and strongest brand in the food and beverage industry. It has  a brand value of $11.7 Billion

      II.          Strong Loyalty Program: Starbucks has a great reward program that keeps customers addicted to its coffee.

    III.          Employee treatment: It treats its employees very well which eventually translates into happier employees serving customers well

    IV.          Efficiency, Strategic Planning, and Reinvestment Strategy: Starbucks reinvests its profits in expanding its business in different locations

     V.          Quality, Taste and Standardization: It offers excellent quality and consistently standardized products in all the locations.

    VI.          Moderate diversification: Starbucks has also diversified its business operations by introducing innovative merchandises and food items.

  VII.          Acquisitions: Company has acquired top 6 companies. These acquisitions have proven quite successful for Starbucks.

 VIII.          Extensive international supply chain:Starbucks is known to have an extensive global network of suppliers

    IX.          Growth in stores: It increased its number of stores from 1,886 to 31,256

     X.          Strong financial performance

 

Weakness:

       I.          High prices: Its high prices reduce affordability for the consumers.

     II.          Procurement Practices: Many social and environmental activists claimed that it procures coffee beans from impoverished third world farmers.

    III.          Generalized standards for most products: Some of its product offerings are not aligned with the cultural standards of other markets.

   IV.          Imitability of products: Starbucks doesn’t own the most unique products in the market.

 

Opportunities:

       I.          Expansion in developing markets: Global expansion in emerging economies such as India, China and few regions of Africa can give a great opportunity to the company.

     II.          Business diversification and Products Specifications, it can further diversify its business operations to improve overall revenue growth opportunities.

    III.          Introducing new products: As the company is quite popular, introducing new products under its name would be profitable and welcomed in the markets.

   IV.          Partnerships or alliances with other firms Starbucks has the opportunity to develop partnerships and alliances with major firms.

     V.          Exploit Latest Coffee Trends and Technologies Although Starbucks is at the forefront of cutting-edge coffee technology, there is still room for expansion.

   VI.          Adopt Price Differentiation Starbucks can offer regular coffee that is priced lower to capture the middle-class while serving its expensive variety as premium.

 VII.          Strengthen Online Channels Starbucks can strengthen its online sales channels to attract more customers

VIII.          Coffee Delivery Service Starbucks can start its own coffee delivery service for better customer experience.

 

Threats:

       I.          Competition with low-cost coffee sellers – Many coffeehouses offer products at an affordable rate.

     II.          Imitation – Products can be imitated by both new and old rivals.

   III.          Competition with big outlets – Multinational companies like Dunkin Donuts and McDonald’s can also pose a threat to its market position.

   IV.          Independent coffeehouse movements – There are many sociocultural threats for Starbucks.

     V.          Coronavirus – it will have negative impact on their financials in 2020.

   VI.          Rising Prices of Raw Coffee Beans

 I hope and believe that post about SWOT Analysis And Core Competencies Of Starbucks will give you better understanding about Starbucks