Podcast
Questions and Answers
What is a SWOT analysis used for?
What is a SWOT analysis used for?
A SWOT analysis is only used for business planning.
A SWOT analysis is only used for business planning.
False
What does the 'O' in SWOT stand for?
What does the 'O' in SWOT stand for?
Opportunities
A SWOT analysis helps to identify internal ______________________ and external ______________________ factors.
A SWOT analysis helps to identify internal ______________________ and external ______________________ factors.
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Match the following SWOT components with their definitions:
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?
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.
Starbucks operates only company-operated stores globally.
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What is the estimated annual revenue of Starbucks in fiscal year 2022?
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.
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:
Match the following Starbucks acquisitions with their descriptions:
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What percentage of total revenue is generated by company-operated stores?
What percentage of total revenue is generated by company-operated stores?
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Starbucks has a limited international supply chain.
Starbucks has a limited international supply chain.
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What is an example of Starbucks' product diversification?
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?
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.
Starbucks supports the idea of unionizing its workers.
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How does the pandemic affect customer behavior according to experts?
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.
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?
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.
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?
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:
Match the following SWOT components with their descriptions:
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What is one of the opportunities for Starbucks to expand its business?
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.
Starbucks has already started its own coffee delivery service.
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What is one of the threats to Starbucks' market position?
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 ________________.
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:
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?
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.
Starbucks is currently the only company offering coffee subscription services.
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What is one of the sociocultural threats to Starbucks?
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.
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?
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'?
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.
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?
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.
Starbucks has been criticized for its ______________________ procurement practices.
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Match the following weaknesses of Starbucks with their descriptions:
Match the following weaknesses of Starbucks with their descriptions:
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What is the reward program of Starbucks?
What is the reward program of Starbucks?
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Starbucks' recall of products has never affected its brand image.
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?
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 ______________________.
Starbucks faced criticism for tax avoidance in the ______________________.
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What percentage of coffee lovers hate Starbucks' 'Iced Latte'?
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.
