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What is a SWOT analysis used for?
A SWOT analysis is only used for business planning.
False
What does the 'O' in SWOT stand for?
Opportunities
A SWOT analysis helps to identify internal ______________________ and external ______________________ factors.
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Match the following SWOT components with their definitions:
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What is the estimated brand value of Starbucks Corporation as per 2022 Interbrand ranking?
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Starbucks operates only company-operated stores globally.
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What is the estimated annual revenue of Starbucks in fiscal year 2022?
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Starbucks sources its coffee beans from three coffee producing regions: ______________, Africa, and Asia-Pacific.
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Match the following Starbucks acquisitions with their descriptions:
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What percentage of total revenue is generated by company-operated stores?
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Starbucks has a limited international supply chain.
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What is an example of Starbucks' product diversification?
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How many Starbucks stores were temporarily closed in China due to the coronavirus outbreak?
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Starbucks supports the idea of unionizing its workers.
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How does the pandemic affect customer behavior according to experts?
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The price of raw ______________________ beans has increased drastically during the pandemic.
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What is the approximate percentage of Starbucks stores closed in China during the pandemic?
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Dietary racism is a practice that promotes healthy food options to BIPOC communities.
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What is the result of the increase in raw coffee bean prices on Starbucks' profitability?
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Match the following SWOT components with their descriptions:
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What is one of the opportunities for Starbucks to expand its business?
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Starbucks has already started its own coffee delivery service.
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What is one of the threats to Starbucks' market position?
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Starbucks can strengthen its online sales channels to attract more customers to pick their coffee ________________.
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Match the following opportunities with their descriptions:
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What is one of the advantages of introducing new products under the Starbucks name?
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Starbucks is currently the only company offering coffee subscription services.
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What is one of the sociocultural threats to Starbucks?
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In 2018, a California judge ruled that Starbucks and other companies must provide ______________________ labels on all their coffee products.
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What is one of the reasons why Starbucks employees refused to let two African-American men use the restroom?
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What ranking did Forbes give to Starbucks in the category of 'Canada's Best Employers for Diversity'?
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Starbucks has introduced gender-neutral restrooms in all its stores.
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What is the minimum starting wage of baristas at Starbucks as of 2022?
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Starbucks has been criticized for its ______________________ procurement practices.
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Match the following weaknesses of Starbucks with their descriptions:
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What is the reward program of Starbucks?
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Starbucks' recall of products has never affected its brand image.
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What is the average salary wage that Starbucks plans to achieve for its baristas?
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Starbucks faced criticism for tax avoidance in the ______________________.
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What percentage of coffee lovers hate Starbucks' 'Iced Latte'?
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Study Notes
Starbucks Strengths
- Strong brand image: valued at $14.05 billion as of 2022 Interbrand ranking
- Strong financial performance: $32.25 billion in revenue and $3.28 billion in profit in fiscal year 2022
- Extensive international supply chain: sources coffee beans from Latin America, Africa, and Asia-Pacific
- Acquisitions: successful acquisitions of companies like Seattle's Best Coffee, Teavana, and Ethos Water
- Moderate diversification: introduced innovative merchandises and food items, such as coffee ice cubes
- Quality, taste, and standardization: offers premium blends and consistently standardized products globally
- Efficiency, strategic planning, and reinvestment strategy: reinvests profits in expanding business operations
- Employee treatment: treats employees well, listed as one of the best companies to work for
- Strong loyalty program: rewards customers with points, free drinks, and convenience features
- Increased starting wage for baristas: raised minimum wage to $15/hour and plans to increase average wage to $17/hour
- Introduced gender-neutral restrooms: to protect the LGBTQ+ community against discrimination
Starbucks Weaknesses
- High prices: reduces affordability for some consumers
- Imitability of products: easy for competitors to replicate products
- Generalized standards for most products: may not align with cultural standards in other markets
- European tax avoidance: faced controversies and criticisms for tax avoidance in the UK
- Procurement practices: criticized for unethical practices and violating "Fair Coffee Trade" principles
- Recall of products: has recalled products due to contamination and allergen risks, affecting brand image
- Worst holiday drink: introduced a festive drink that was not well-received by customers
Starbucks Opportunities
- Expansion in developing markets: potential for growth in emerging economies like India, China, and Africa
- Business diversification and product specifications: opportunities to develop products tailored to specific markets
- Introducing new products: can introduce new products and holiday flavors to generate revenue
- Partnerships or alliances with other firms: co-branding can strengthen market presence
- Exploit latest coffee trends and technologies: can leverage new technologies to improve offerings
- Adopt price differentiation: can offer regular and premium coffee options to cater to different classes
- Strengthen online channels: can improve online sales channels to attract more customers
- Coffee delivery service: can start its own coffee delivery service for better customer experience
- Coffee subscription: can explore a coffee subscription business model to expand customer base
Starbucks Threats
- Competition with low-cost coffee sellers: threats from affordable coffeehouses
- Competition with big outlets: aggressive competition from multinational companies like Dunkin Donuts and McDonald's
- Imitation: products can be imitated by new and old rivals
- Third-party delivery suppliers (union) strike: disruptions to supply chain can affect business operations
- Independent coffeehouse movements: sociocultural movements supporting small, local coffeehouses
- Controversy on California warning rule: required to provide warning labels on coffee products
- Philadelphia arrests: controversy surrounding the arrest of two African-American men at a Starbucks store
- Coronavirus: significant impact on financial performance due to reduced customer traffic and store hours
- Change in customer behavior: pandemic-driven changes in customer behavior and tightened discretionary spending
- Rising prices of raw coffee beans: increased prices due to concerns over availability and supply chain disruptions
- Negotiation with Buffalo workers in favor of unionizing: potential unionization of workers in Buffalo stores
- Dietary racism: accusations of compelling BIPOC communities to eat unhealthy foods and offering limited options at cheaper costs
Employee Treatment
- Starbucks is known for treating its employees well, which leads to happier employees serving customers better.
- It has been listed as one of the best companies to work for and has been ranked by Forbes in various categories, including World's Top Companies for Women (#14) and Canada's Best Employers for Diversity (#36).
- The company has increased the minimum starting wage of its baristas to $15/hour and plans to have an average salary wage of $17/hour for its baristas.
- Starbucks has also introduced gender-neutral restrooms to protect the LGBTQ community against discrimination.
Customer Loyalty Program
- The company has a strong loyalty program that keeps customers engaged, offering rewards for every dollar spent, with benefits such as mobile payment, pre-order, and free birthday drinks.
- Customers can earn 3 stars for every dollar spent and redeem a free drink after collecting 150 stars.
Strengths
- Strong brand image with a brand value of $14.05 billion as per 2022 Interbrand ranking.
- Strong financial performance with an annual revenue of $32.25 billion and profit of $3.28 billion in fiscal year 2022.
- Growth in stores, with an increase from 1,886 to 35,711 stores between 1998 and 2022.
- Extensive international supply chain, sourcing coffee beans from three regions: Latin-America, Africa, and Asia-Pacific.
- Acquisitions, including Seattle's Best Coffee, Teavana, Tazo, Evolution Fresh, Torrefazione Italia Coffee, and Ethos Water.
- Moderate diversification, introducing innovative merchandises and food items, such as ice cubes made of coffee.
- Quality, taste, and standardization, offering excellent quality and consistently standardized products in all locations.
- Efficiency, strategic planning, and reinvestment strategy, reinvesting profits in expanding business operations.
Weaknesses
- High prices, reducing affordability for many consumers.
- Imitability of products, making it easy for other companies to offer similar products.
- Generalized standards for most products, not aligning with cultural standards of other markets.
- European tax avoidance, facing controversies and criticisms for avoiding tax on £1.3 billion of sales in three years prior to 2012.
- Procurement practices, criticized for unethical practices and violating "Fair Coffee Trade" principles.
- Recall of products, negatively affecting brand image and customer loyalty.
Opportunities
- Expansion in developing markets, particularly in emerging economies such as India, China, and Africa.
- Business diversification and product specification, developing products as per customer preferences in specific target markets.
- Introducing new products, such as holiday flavors and seasonal offerings.
- Partnerships or alliances with other firms, strengthening presence and market share.
- Exploiting latest coffee trends and technologies, staying ahead of competitors.
- Adopting price differentiation, offering regular and premium coffee to cater to different classes.
- Strengthening online channels, attracting more customers to pick up coffee curbside or in pickup locations.
- Coffee delivery service, starting own delivery service for better customer experience.
- Coffee subscription, trying new coffee subscription business model to expand customer base.
Threats
- Competition with low-cost coffee sellers, posing a threat to Starbucks' market position.
- Competition with big outlets, such as Dunkin Donuts and McDonald's.
- Imitation, with products easily replicable by competitors.
- Third-party delivery suppliers (union) strike, affecting supply chain and customer experience.
- Independent coffeehouse movements, opposing expansion of large multinational chains.
- Controversy on California warning rule, requiring warning labels on coffee products.
- Philadelphia arrests, causing controversy on social media against Starbucks.
- Coronavirus, affecting financial performance and customer behavior.
- Change in customer behavior, tightening discretionary spending and affecting development plans.
- Rising prices of raw coffee beans, reducing profitability.
- Negotiation with Buffalo workers in favor of unionizing, affecting labor relations.
- Dietary racism, compelling BIPOC communities to eat unhealthy foods and offering limited options.
- Task for students:*
Arrange the following points into strengths, weaknesses, opportunities, and threats:
- Employee treatment
- Strong brand image
- High prices
- Expansion in developing markets
- Competition with low-cost coffee sellers
- Coffee delivery service
- Procurement practices
- European tax avoidance
- Generalized standards for most products
- Imitation
- Philadelphia arrests
- Controversy on California warning rule
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Description
Key strengths of Starbucks Corporation, including its strong brand image and financial performance.
