Strategic Analysis of Starbucks: A Direct & Digital Marketing Report

This report presents a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Starbucks, a global coffeehouse company. The strengths include strong financial performance, a wide international network of suppliers, and innovative product offerings. Weaknesses include high prices and generalized product standards. Opportunities involve expansion into emerging markets and business diversification. Threats include competition from low-cost coffee sellers and sociocultural movements favoring local coffeehouses. The analysis also examines political, economic, social, technological, legal, and environmental factors impacting Starbucks. These include concerns about raw materials, economic recessions, social challenges in expanding the consumer base, technological advancements, and adherence to legal and environmental regulations. References to academic sources support the analysis.

Direct & digital marketing

Direct & Digital Marketing 1
Strengths Weaknesses
 Starbucks is having a strong
financial performance. It has assisted
the company in getting the number
one spot among the coffee and
beverage retailers globally.
 Starbucks is identified to have a
wide international network of
suppliers. The company sources
coffee beans from 3 coffee-
producing provinces such as Africa,
Latin-America, and Asia-Pacific.
 The business operations of the
company have been expanded by
making use of innovative
merchandises and food items such as
ice cubes made of coffee to enhance
the coffee flavor (Azriuddin, et al.
2020).
 Starbucks charges higher prices for
the quality products provided.
Moreover, the charges are quite high
as compared to the competitors.
 The company has maintained
generalized standards for most of the
products.
Opportunities Threats
 Starbucks has attained the
opportunity to make expansion in
the emerging markets. The global
expansion has provided a great
opportunity to Starbucks.
 The company also makes use of the
opportunity in the form of business
diversification and product
specifications.
 Starbucks faces a threat in the form
of competition with low-cost coffee
sellers (Sholihah, et al. 2016).
 Starbucks faces sociocultural threats.
These sociocultural movements
assist to small and local
coffeehouses and go against the
enlargement of the multinational
chains.
Political factors  The company faces concern for the
obtaining of raw materials. This

Direct & Digital Marketing 2
concern has attracted the devotion of
politicians in the west and in the
nation from the company obtains its
raw materials.
 Starbucks faces the issue of
regulatory pressures in the US due to
greater inquiry of business
procedures (Grazzini, et al. 2020).
Economic factors  The economic factor driving the
company and is undergoing an
international economic recession
which has affected the profitability.
 The customers are shifting to lower-
priced companies than reducing their
coffee consumption. It is identified
to be an opportunity for the
company.
 Starbucks is also required to resist
increasing active and labor costs as
the inflationary macroeconomic
environment.
Social factors  Starbucks can provide low price
alternatives but without
compromising the quality. It can
create social challenges for the
company which can be faced while
widening the consumer base to
comprise the customers from
middle- and lower-income level
groups.
 The company is required to be aware
of the trend such as green and ethnic
chic customers.
Technological factors  The company is good enough in

Direct & Digital Marketing 3
attaining the assistances of the
evolving mobile wave. Starbucks
has made a contract with Apple to
launch app-based discount coupons.
It anticipates riding the mobile wave
with comfort.
 The Wi-Fi competences have been
familiarized by Starbucks in the
outlets which are added value to
enhance the experience of the
customers.
Legal factors  The company has to make sure that
it does not run afoul of the laws and
guidelines in the nations from which
it obtains raw ingredients and
domestic markets in the US.
 Starbucks also has to follow the
product safety regulations with
increasing employment regulations.
Environmental factors  There are various concerns about
Starbucks concerning business
practices from global advocacy,
activists, and the customer
themselves (Liu & Zhang, 2019).
 Starbucks needs to be aware of the
conditions of the nations where
coffee beans are produced. Such
nations generally encounter
environmental calamities that
require to be countered to make sure
the quality of coffee beans being
manufactured.

Direct & Digital Marketing 4
References
Azriuddin, M., Kee, D. M. H., Hafizzudin, M., Fitri, M., Zakwan, M. A., AlSanousi, D., ... &
Kurniawan, O. (2020). Becoming an International Brand: A Case Study of
Starbucks. Journal of the community development in Asia, 3(1), 33-43.
Grazzini, L., Acuti, D., Mazzoli, V., Petruzzellis, L., & Korschun, D. (2020). Standing for
politics: What consequences for brands?. Italian Journal of Marketing, 1-17.
Liu, Y., & Zhang, J. (2019, May). The Influence of Employees’ Motivation Management on
Teamwork: Taking Starbucks as an Example. In 2019 International Conference on
Management, Education Technology and Economics (ICMETE 2019). Atlantis Press.
Sholihah, P. I., Ali, M., Ahmed, K., & Prabandari, S. P. (2016). The Strategy of Starbucks
and it's Effectiveness on its Operations in China, a SWOT Analysis. Asian Journal of
Business and Management (ISSN: 2321–2802) Volume.