SWOT Analysis
Organization: Starbucks Operational Objectives: Premium coffee experience and excellent customer service |
INTERNAL
Strengths - “Experience” – Offering an experience that entices customers
- Internal evaluation
- Offers ‘sophisticated’ food products
- Leadership seen as ‘soul’ of the brand
- Leadership encourages strategic risk taking
- Leadership encourages feedback
- Strong brand recognition (domestic and international)
- Work to keep employees incentivized (ex, offering healthcare to part-timers)
- Values driven organization
| Weaknesses - The theater and romance are being automated, less enticing
- Loss of non-visual stimuli in store
- Lack of communication – ex: between Schultz and head of food/beverage
- Leadership intimidates other workers
- The smell of ‘fast’ food overpowers the smell of coffee
- Charges premium prices
- With automation, the product can be duplicated elsewhere – potentially lower price points.
- Over expansion and saturated markets
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EXTERNAL
Opportunities - Using employee input to make each store locally trendy
- Purchase of company making newer/better espresso machines
- Leadership traveling to renew value in stores
- Redesign stores to be less ‘cookie cutter’ and more appealing to consumers – using on trend reclaimed wood etc.
- Leasing stores rather than own can help the same-store growth (Manzor, 2018)
- International growth
- Partnership with other companies, such as Teavana (Cimini, 2014)
- Offering more products, tea/juice
- Technological advances, in machines etc.
| Threats - Opening competitors to Starbucks customers, no longer the ‘only game in town’
- Improvements take considerable time
- Falling profits scare investors
- Shop local movement – fostering local coffee shops.
- Coffee prices are volatile (Cimini, 2014)
- Coffee delivery services, and specialty stores are cornering the niche market
- Consumers are shifting to a more health-oriented purchasing pattern.
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Howard Shultz started at Starbucks when it was only a fledging brand (Skeen, 2011). He had a strong desire to turn the store from one focused on selling only coffee beans, into a coffee shop like those he had seen in Europe. After frustration with the original Starbucks owners and disagreement about bringing his idea to life, he set out to open the store he was envisioning. Almost immediately, Shultz was planning for the long-term success of the company.
