Starbucks SWOT Analysis Essay

Starbucks SWOT Analysis Essay

Starbucks is the largest fast-casual restaurant in the sphere of coffee business. Nevertheless, there are many threats to the company’s dominance. SWOT analysis could help to better understand the current market challenges for Starbucks.

Strengths

The biggest strength of the company is its dominant market position. Thus, a huge number of customers in all parts of the world makes it possible for Starbucks to accumulate resources and invest them in R&D and innovations. The powerful brand image of the company gives an opportunity for Starbucks to enter new markets without serious investments in advertising and promotion. Moreover, the client-oriented marketing strategy of the company attracted many regular customers who consider coffee houses of the chain as their third home.

Weaknesses

The price of coffee beans plays a huge role in the functioning of the company. Accordingly, any rise in the price of coffee beans is dangerous for the financial stability. Another problem is related to labor issues. Starbucks regularly faces accusations in using farmers as a cheap labor force.

Opportunities

There are still many emerging markets for Starbucks to enter. At the same time, the company can add some new products in order to attract more customers, especially those who are interested in healthy food. Finally, Starbucks company has an opportunity to improve the quality of products and propose better coffee for the clients.

Threats

Environmental pollution could lead to the problems with the growing of coffee beans. In this situation, the company will be in serious danger. There exists a constant competitive pressure from the local small coffee restaurants, which propose good coffee for lower prices. Some new competitors could undermine the dominance of the chain.

Market behavior for coffee consumption

There are three basic factors that have an influence on the market behavior of the clients. The first factor is psychological. It is fair to state that people drink coffee today to relax and chat with friends. Starbucks tries to create all necessary conditions for time spending in the company’s restaurants. The second factor is based on the reasons to buy this product. In the modern world, people want to be energized. They drink coffee to get energy and power for activities. Finally, social factor is related to the popularity of Starbucks, which is a famous brand with many followers. Thus, people enjoy visiting the famous restaurant.