Starbucks Swot Analysis

Starbucks Swot Analysis

A qualified business professional understands the buzz about the most significant potential for success equates to the same potential for failure in business. Analyzing the factors contributing to success or failure from external factors plays a vital role in business operations. SWOTT, an acronym for Strength, Weakness, Opportunities, Threats, and Trends, is a method used to summarize the current state of an organization and help strategic planning for the future (Pearce and Robinson, 2013). SWOT analysis will analyze the strength, weaknesses, opportunities, threats, and trends the company is factoring in the model business climate. These factors will be separated into external and internal categories (Pearce and Robinson, 2013). External factors affect Starbucks’ new product, Juice Bar, from outside the organization’s control, which includes regulatory issues and competition. Internal characteristics, such as management structure and innovation, occur within the organization. SWOT analysis aims to discover and evaluate information used in developing strategic planning. Starbucks’ mission is to “inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time” (Starbucks, 2015). From birth, Starbucks distinguished itself as a company that celebrates coffee and rich tradition and has a feeling of connection. Expanding the beverage menu to include The Juice Bar, SWOTT analysis will identify possible issues and opportunities. The supply chain analysis of operations will also be considered to identify other problems and opportunities.

Legal and Regulatory

 Starbucks has a variety of external forces and trends that affect strategic choices. Legal and regulatory issues are one of the most essential factors considered. The organization imports products from over 6500 stores nationwide (Starbucks, 2015). Regulatory pressure on the United

States’ home market plays a significant role. Starbucks may be subject to more excellent scrutiny, including tax policies and employment laws. One advantage, most of the rules and regulatory issues currently established with the existing products may transfer to the new product. Any organization, including Starbucks, must ensure compliance with laws and regulations in home and global markets, especially where raw materials are purchased. The organization must stay well-informed of food consumption-related policies and regulations by health authorities.

Other factors that may affect the company are stricter customs, trade regulations, and licensing regulations related to the industry (Bateman & Snell, 2011).

Global, Economic

 The most recent global and economic factor that affects all businesses is fuel cost. If the cost of fuel increases, then the cost of transporting the products from suppliers to merchants will also increase. Delivery methods are examined to ensure the best price and quality (Pearce & Robinson, 2013). Economic forces and trends can have positive and adverse effects on an organization regarding the cost of raw materials. The cost of importing the raw material may exceed the high quality. Economic factors are analyzed as they will impact the supply and demand of the particular fruit and juices featured at Starbucks’ Juice Bar.

Competitive analysis

 The objective of the competitive analysis will focus on companies such as Dunkin Donuts and, McDonald’s, Starbucks’ Juice Bar competitors. Starbucks, a leader in the industry, wants to maintain leadership. The research gathered through comparative analysis shows that Dunkin Donuts Brands and McDonald’s are the closest competitors to Starbucks. Both rivals were founded almost two decades before the coffee giant. Dunkin

Brands were founded in 1950 by Bill Rosenberg and are the world’s most oversized baked goods and coffee chain (“Dunkin Donuts,” 2011). McDonald’s in 1955 was the largest fast food chain in the world (“McDonald,” 2010). Starbucks can offer a wider variety with the Juice Bar, including healthy snacks and fruit consumed at any time, including breakfast. Dunkin Donuts has also modified its menu to capture customers besides breakfast coffee and doughnuts.

Starbucks’ target market is health-conscious that will enjoy the option of juice smoothies from their favourite beverage place. Starbucks’ rival Dunkin Donuts offers iced and frozen coffees, lattes, and an assortment of teas. While many of these colder beverages can be made with skim milk to make the fat content negligible, they still have a considerable amount of carbohydrates added with sugar. There are many healthful benefits of juicing. Some consumers do not like to eat certain fruits and vegetables and prefer the convenience of drinking them on the go.

Starbucks has effectively managed its innovation timeline, generating consistency in same-store sales (Starbucks, 2015). The organization has proven their ability to launch new products quickly, a competitive advantage. The launch of the Frappuccino® was completed speedily and relatively successfully (Starbucks, 2015).

Starbucks has proven they know how to offer its customers the right product while maintaining a solid core range. The Juice Bar will expand Starbucks into a healthy beverage arena, keeping Starbucks an organization continually moving forward.

Supply Chain

 Launching a new product for existing customers or market can affect the existing supply chain (needs can affect the adding the new product to the current supply chain, analyzing the ins and outs of the various supplier currently in the market. With the organization’s reputation, buying power, and financial stability, Starbucks will have a strong advantage in negotiating lower prices. The company will gather data for forecasting instead of guessing. One method is to analyse competitors who sell similar products. The company can help maintain costs by avoiding fixed-cost investments such as costs avoiding improved ties. Diagnosing the cost of using existing facilities to house the new raw materials may prove more cost-effective than outsourcing. Evaluating the cost and benefit- trade-offs of an operational component is part of the supply chain strategy (Bateman & Snell, 2011). Starbucks can maintain the product flow from suppliers to customers using distribution channels and worldwide outlets. The organization has an incredible supply chain that spans nineteen countries (Starbucks, 2015). Global resources can reach more countries than ever before.

Internal Factors

 The business environment covers factors within the company which impact the business operations. However, different from external factors, the organizaunlikeol over internal factors. Recognizincontrolsl opportunities and threats outside company operations are vital. Managing the strengths of internal processes is the key to business success. Some internal factors include culture, leadership, strategy, technology and innovation. The firm will provide the formal structure with mission and vision statements.

Cultural

 The company’s culture will express a positive atmosphere by encouraging improvement methods for internal and external customers. Store employees are the front line to customers, an essential part of the organization; they must exhibit a “let me make your day attitude.” The employees are an important internal factor. Employees who are motivated tend to work hard to satisfy customers. These employees produce better results compared to unmotivated and less talented employees. Customers who experience friendly, courteous service are most likely to return. The processes and relationships between and within departments will improve effectiveness and efficiency.

Leadership

 Leadership is an essential aspect of any business for efficiency and growth. Good leadership can foster motivation increasing productivity (Bateman & Snell, 2011). Listening to the employee and customer feedback will improve areas making them more efficient. Customers may inquire about health benefits associated with the speciality fruit and juices offered; having a centralized resource location for employees to obtain can prove helpful. Leadership is an integral part of a business operating smoothly and efficiently. Leaders are not just top-level but are on all levels. Good leadership can direct employees who are confused about the making of the end product, encourage employees to increase productivity, save the company money by promoting efficiency with new procedures, and proactively mitigate dissatisfaction among internal and external customers. Leaders can foster innovation by simply stayinLeaders and listening to the people staying open, and listening questions create an environment where solutions and process improvement are born.

Strategy

 The internal strategy focuses on customer satisfaction and providing a quality product. Maintaining an environment where customers enjoy indulging in tasty smoothies while socializing will add to the brand of the “experience.” Allowing the customers to create unique coAllowingwill give a sense of investment from the customer’s perspective (Bateminvestmentnell, 2011).

Economic

 Economic forces and trends can benefit the company. A study of the demographics and other factors will help with pricing. Keeping the operational cost wherever possible is a daunting but manageable task. Buying some products for communitytaskvolvement while generating economic growth for the community. Although some economic factors are non-controllable for businesses, conducting proper price analysis will help to maximize product cost (Bateman & Snell, 2011).

Regulatory

 Each store must adhere to federal and state food regulations per the health code standards. Maintaining high standards for storing and preparing beverage and food products will align with the high standard the company is widely known. The new procedures may require additional training on the staff’s part. Still, the return on investment is shown through customer loyalty, positive feedback, returning customers, sales, and organizational reputation throughout the industry. Non-compliance with laws and regulations can cause adverse effects such as loss of business, profits, legal actions, and damaged reputation.

Technological and Innovation

 One may not think of technology and immediately associate it with the Juice Bar. Businesses must stay innovative to keeBusinesses must stay innovative-ket innovation can promote the company initiatives in the marketing plan. Social media is the fastest way to inform customers. A presence on a social media website can generate interest, feedback, and other pertinent information that can potentially grow the product line. The buzz can be heard around the world almost simultaneously. However, it is a double edge sword. Just as quickly as positive feedback is sent out on social media, negative feedback is sent just as fast. However, creating an atmosphere within each store may appeal to different demographics as a relaxing socializing spot. The store will feel like a meeting place with free and unlimited Wi-Fi in all shops. The company will embrace new technology to keep up with technological advancement.

SWOTT Analysis

 Strength     

Offering healthy options to non-coffee drinkers creates a brand known for high-quality standards.

The work atmosphere fosters process improvement.

Branding can bring recognition where most customers show loyalty by frequently patronizing the establishment.

Change in lifestyle causes consumers to opt for healthier beverage options.

Establish the organization as a leader in the new product line. Expand the brand

Stronger ties in the community by buying local area produce for the new product line.

Generate community growth

Expand customer base, including a broader demographics

Weakness

Customers may not like the smoothies. The imported product cost of the raw material may draw material’s imported product cost may not be transported to the new product line, which may cause stress on some stores.

Reliance on the brand may hurt the coffee brand if consumers reject the new product line.

The high Operating cost of new product lines and specialized equipment has a high operating cost. In addition, the technical equipment costs product line may require a longer time frame. The fresh raw material may not transport well, causing additional expenses.

Transporting the additional raw material cost may increase due to high fuel costs.

Customer’s unwillingness to pay the new produCustomers’ould add stress to the store’s operating budget.

Lawstressorting some raw material

Opportunities

Create a more substantial lead in the industry.

The extension of the brand can create opportunities in global markets.

Growth in the agriculture market generates economic development in various countries. Expand customer base.

Product line expansion creates market competition, including the weight management market.

Threat           

Other competitors may enter the market with a substitute product will cut profit and competitive advantage.

Economic conditions can cause a decrease in spending. Lack of knowledge of the product by employees

Laws may prohibit imports of specific raw materials from creating the products.

Trend           

Consumers are knowledgeable about healthier choices, showing the organization’s ability to make and move forward.

Creating a buzz on social media will help generate interest and potential business.

Supplying customers with unlimited Wi-Fi creates a meeting place environment for socializing.

Foster community involvement by becoming a part of the community. Create a partnership with each community by buying some products locally.

Creating a business template for eateries to offer free unlimited Wi-Fi to customers

Establishing neighbourhood stores as meeting places

Conclusion

 Every organization must consider external and internal factors’ positive and adverse impacts in the business world. Analyzing the strength, weaknesses, opportunities, threats, and trends will reveal a critical area of a strategic plan. Knowing the organization’s weaknesses can help managers avoid pitfalls hindering growth. The threats portion of the SWOT analysis will help the organization avoid barriers to success and reveal any legal issues. The strength, opportunities, and trend portion will identify targeted markets, develop business formats and build competitive advantages, which are the essential factors of a thorough business strategy (Pearce & Robinson, 2013). The new product line for Starbucks faces some challenges. With Starbuck’s track record, reputation, and SWOT analysis, the Juice Bar will prove promising and profitable.

References

Bateman, T. S., & Snell, S. A. (2011). Management: Leading & collaborating in a competitive World (9^th ed.). New York, NY: McGraw-Hill Irwin.

Dunkin Donuts. (2011). Retrieved from http://www.dunkindonuts.com/dunkindonuts/en.html McDonald. (2010). Retrieved from http://www.mcdonalds.com/us/en/home.html

Pearce, J.A., & Robinson, R.B. (2013). Strategic Management: Planning for Domestic & Global Competition [University of Phoenix Custom Edition eBook]. New York, NY: McGraw- Hill Irwin. Retrieved from the University of Phoenix, BUS475 website.

Starbucks (2015). Starbucks Information about Us Retrieved from http://www.starbucks.com/about-us/company-information

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A SWOT analysis helps evaluate current performance and future potential, especially about competitors. Organizations use SWOTT to assess strengths and weaknesses within the organization, threats and opportunities from outside the organization, and trends that might have long-term consequences for the organization and the industry as a whole.

• • Perform a brief SWOT analysis on a company of your choice, as seen through the eyes of a       marketing manager.
  • Justify some recommendations for overcoming factors that might impede the organization’s progress and taking advantage of factors that could benefit the organization.