Swot Analysis for Starbucks

In: Business and Management

Submitted By jadeypoo
Words 580
Pages 3
October 1st, 2013

Strengths

- Sound financial records. Starbucks profitability has been rising for the past few years and is now 14%. The company also outmatches its nearest competitors with 24.54% return on investment and 29.16% return on equity.

-No. 1 brand in coffeehouse segment, valued at $4 billion. Starbucks has a strong brand reputation associated with quality coffee and excellent customer service. Its brand is the most valuable brand in coffeehouse segment and is valued at $4 billion.

-“Starbucks experience”. One of the strongest advantages Starbucks has is the experience it delivers to its customers with perfectly blended coffee, premium music, friendly staff and warm atmosphere, which results in incomparable customer service.

-Largest coffeehouse chain in the world. The company operates around 20,000 coffeehouses in 60 countries, making it the largest coffeehouse chain in the world.

-Employee management. The company offers its employees extensive range of benefits and a pay rate higher than offered by competitors.

Weaknesses

-Coffee beans price is the major influence over firm’s profits. Starbuck’s profitability and its coffee price are largely dependent on prices of coffee beans, which is a commodity and cannot be controlled by Starbucks. Due to hedge funds, weather conditions and many other factors, Starbucks cannot estimate the price of tis coffee and company’s profitability.

-Product pricing. Starbucks offers great coffee and customer experience but that results in high price of its products. In comparison, McCafe premium coffee was price lower than Starbucks coffee and was better evaluated.

-Negative publicity. The corporate continuously receives negative publicity over its poor efforts of becoming greener company, tax evasions and poor treatment of some suppliers.

Opportunities

-To extend supplier…...

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