Starbucks SWOT Analysis 2018

Strengths

• Well established brand name that is recognised globally around the world.
• In 2017 Starbucks were number 2 for the 10 most valuable fast food brands world wide valued at $44bn dollars (statistica.com)
• Their product line comprises of a large variety of coffees from standard to special artisan coffee.
• The physical environment of their stores appeals to their target audience. The soft sofas , the free wi-fi is helps create the success of the stores.
• Great customer services
• Coffee shops are  the go to stores for people who wish to meet up socially.
• The promotional message of Starbucks has enabled them to retain their crown of being in the top 5 recognised brands.
• Their ability to think global but act local.
• Growth in USA and China , approximately 14000 stores in USA their largest market and 3000 stores in china, their second largest market based on store numbers, according to statistica.com in October 2017.
• A total of 22519  stores globally

Weaknesses

• Perception over tax issues. Starbucks is accused of not paying their tax fully in certain countries.
• The pricing strategy dictates that they are aimed at the middle class/higher class segment. This group are more likely to adjust their spending during a recession, this means that sales during a period of recession could be affected.
• Products easy to copy. There is little technicality about producing coffee.
• The arrest of two customers at a Philadelphia Starbucks over racism earlier in 2018,  has hurt the brand's sales and brand image.
• Howard Schultz Starbucks Executive Chairman announces his step down in June 2018

Opportunities

• Emerging markets from India, Africa, and China
• Growing coffee market sales globally means there is an opportunity for increased sales.
• The middle class in India and China is growing, they are consuming more coffee and this can be seen as an opportunity for Starbucks
• Ready to drink  coffee market is becoming a favourite as consumers shift from drinking sugary fizzy drinks to  ready to drink coffees.

Threats

• The growing dominance of Costa. Number one in the market and growing dominance in emerging countries.
• Mcdonalds brand of coffee, McCafe as a low cost coffee seller. Mcdonalds is aggressively selling coffee at an affordable price.
• External factors can have a major influence on the price of coffee. For example, weather, wars, infestation of crops
• The economic cycle can have an impact on the pricing of coffee.

Conclusion

With 22519 stores globally and with markets emerging Starbucks seems to be going from strength to strength. It may be difficult for them to replace their executive chairman Howard Schultz who’s ideas were the driving factor behind their growth.  Overall this SWOT analysis on Starbucks gives you an idea of the current situation  Starbucks face and we hope you find it useful.