Starbucks: A Swot Analysis

Starbucks: A SWOT Analysis

December 8, 2013

The purpose of this paper is to determine the Strengths, Weaknesses, Opportunities, and Threats as they relate to coffee powerhouse company Starbucks. In the world of strategic management, this is called a SWOT analysis, and by definition: “examines the internal strengths and weaknesses of a firm, comparing them with external opportunities and threats, and matching the two in order to choose a strategy based on the analysis” (Marcus 2011).

Starbucks is considered the chief premier roaster, retailer, and marketer of specialty coffee on the planet, operating approximately twenty thousand (20,000) coffeehouses in more than sixty (60) countries. By the statistics, it is the number one chain of coffeehouses in the world (Jurevicius 2013). The journey for Starbucks actually began in nineteen seventy-one (1971) because an English teacher, history teacher, and writer decided to open Starbucks Coffee Tea and Spice in Pikes Place Market located in Seattle, Washington. Jerry Baldwin, Zev Siegel, and Gordon Bowker, all coffee aficionados, banked on Seattle residents wanting to discover and enjoy European style coffees and exotic teas much like what had already happened in the San Francisco Bay area. They were correct, and within ten years had four coffeehouses open showing profits every year.

In nineteen eighty-two (1982), the three Starbucks owners would meet a gentleman that would change the face of coffee as we know it today, and that man was Howard Schultz. Schultz started courting the owners of Starbucks in nineteen eighty-one (1981), and after a year of meetings and proposals, in September of nineteen eighty-two (1982) was made given the head of marketing position, and was also the head of the retail stores (Shah, Hawk, and Thompson 2007). Not only did Schultz train to master the barista position, he covered all aspects of the business. Shortly after getting situated in the front of the house so to speak, the owners decided to actually finalize Schultz’s training, by teaching him how to actually roast the coffee. Upon completing this aspect of training, Schultz was prepared to run the company. After several years of being in that position, the company sent Schultz to Milan, Italy to look at equipment for the business. On this trip he frequented many coffee bars receiving inspiration for many new ideas for Starbucks and its future (Shah, Hawk, and Thompson 2007). Schultz’s frustration grew as he could not get the other owners to share his vision for the company, prompting him to open up his own coffeehouse, Il Giornale. Due to the success of this venture, Schultz was later able to acquire Starbucks, which the owners gladly sold, making Howard Schultz Starbucks’ president and CEO in August of nineteen eighty-seven (1987) (Shah, Hawk,