SWOT Analysis of Starbucks: Opportunities and Threats

This report provides a SWOT analysis of Starbucks, the largest coffee house chain in the world. It discusses the internal strengths and weaknesses, external opportunities and threats, and recommendations for expanding its business. The report suggests that Starbucks needs to diversify its product range, expand its supplier network, and transform into digital technologies to attract more customers.

International Foundation
Programme

INTRODUCTION
Business is the activity of making money by producing
or buying and selling of products or services it is
considered as an organisation where people work
together to create vale in the society and earn profits. To
conduct any business the organisation needs to look for
business environment where it means that there are
internal and external factors which can influence the
operations and activities of the business organisation.

AN INTRODUCTION TO THE COMPANY
Starbucks is an American company which is the largest
coffee house chain in the world. It is headquartered in
Seattle, Washington. It was founded in 1971 by Jerry
Baldwin Gordon Bowker and Zev Siegl. They opened
the first store near a historic place in Seattle. They were
inspired to sell the high quality of coffee.

SWOT ANALYSIS
It is a tool used by the business organisations to identify its
internal strength and weakness as well as its external
opportunities sand threats. Starbucks is a globally recognized
coffee and beverages brand that has rapidly made strides into
all major markets of the world. The company has a lead over
its nearest competitors including Barista and other emerging
competitors.

WEAKNESSES
The company is heavily dependent on its main and
key input, which is the coffee beans and hence, is
acutely dependent on the price of coffee beans as a
determinant of its profitability. This means that
Starbucks is overly price sensitive to the fluctuations
in the price of coffee and hence, must diversify its
product range to reduce the risk associated with such
dependence only on one product category.

OPPORTUNITIES
It has an opportunity to expand its supplier network and
the range of suppliers from whom it sources in order to
diversify its sources of inputs and not be at the mercy of
whimsical suppliers. Further, this would also help the
business organisation in becoming less sensitive to the
prices of coffee beans and make it resilient against
supply chain risks

THREATS
The company faces intense competition from local coffee shops and speciality
stores that give the company a run for its money as far as niche consumer
segments are concerned. It can be said that the company faces a tough challenge
from local stores who serves coffee with a reasonable rate and targets the lower
and middle class people.

RECOMMENDATIONS
From the above research it is suggested that Starbucks can
implement few things which will help the company in
expanding its business and creating more brand value. The
company needs to transform into digital technologies in
which it need to start the online delivery for attracting
more customers.

CONCLUSION
From the above report it is concluded that the there are internal and external
factors which can influence the operations and activities of the business
organisation. It is important for the Starbucks to consider the factors for the
smooth functioning as it can affect its operations. Also the swot analysis of the
company suggests that the company has various opportunities which can lead the
business to higher level. It is recommended that Starbucks needs to increase its
product range by including other fast food items in its menu.

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