BB105 Marketing Principles: Starbucks SWOT and PEST Analysis

This report presents a comprehensive SWOT and PEST analysis of Starbucks, examining the company's internal strengths and weaknesses, as well as external opportunities and threats. The SWOT analysis explores the brand's image, global network, and diversification, while also addressing weaknesses such as high prices and product generalization. The PEST analysis delves into the political, economic, social, and technological factors impacting Starbucks' business environment, including government regulations, economic conditions, consumer preferences, and technological advancements. The report highlights how these factors influence Starbucks' marketing mix, competitive advantage, and overall market strategies, including the use of STP processes and promotional strategies. The analysis concludes by emphasizing the importance of these strategic tools in helping Starbucks achieve its objectives and maintain a strong market position, particularly in the Australian market. The report is structured with an introduction, main body, and conclusion, with references provided for all sources.

PEST & SWOT Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT analysis.......................................................................................................................3
PEST analysis.........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Starbucks is the world's largest coffee supplying chain company, which start its operations from
1971 from Seatle, United States. In beginning they start their supplies in whole bean coffee, tea, rosters
and retailer. And in present it has more than 24000 retail stores in more than 70 countries. But in
Australia, there are no such stores because being an American company, they have to face various
challenges (Kehinde and et.al., 2016). On of the issue that Starbucks face is they didn't fit Australia's
taste. After setup their retail store in Australia they are facing losses as till 2005, Starbucks accumulated
the loss of approx $105 million. But in the closure time of 2008, Starbucks open up the new locations in
the country. For this company, uses the SWOT and PESTLE analysis which help the company to get the
factor's information which are related to the competitive environment for their potential impact on the
basis marketing mix. With the help of these strategies company can operate and achieve the objectives
in order to meet of the organisational, strategic and operational marketing.
MAIN BODY
SWOT analysis
Swot is the model is the management tool, that assesses the strength, weakness, opportunities
and threat of the company. Which are related to the internal and external factors which affect the
Starbucks coffee business. Where the strength and weakness of the business show the internal factors
of the company . The opportunities and threat reflect the external factors which affect competitive
environment and many other external factors.
Strengths: The main strengths of the company are the strong brand image of the company in
the markets. The company are used to make the loyal customers with the help of there strong brand
image in the market. They make more and more loyal customers for the coffee business in the different
market segments. Another strength of the company is its widespread global networks of the supply
chain. As Starbucks use the best quality products to satisfy the customers need for example they use,
Arabic coffee beans (Mothersbaugh, Hawkin and Kleiser, 2019). Furthermore they have diversify their
business such as they developed their subsidiaries like ethos waters, settler's best coffee and many
more. As their grand diversification in the business reduce the market risk and industry risk. They
provide various benefits to their different partners in different manners, also Star buck's innovation
technique and developing tools are so unique that it help them to create the goodwill.
Weakness: After having strengths in the business, they are facing various challenges and
weakness which create the burden for the company to expand there market positions. One of the major

issue for the Starbucks is their high price, which actually increase the profit of the company but it reduce
the affordably of their products for the local customers. As this weakness limits the market area of the
company, especially in the area of lower disposable income. Another weakness is that it generalised
most of the products in market. In the result it minimize the flexibility of the products, like Starbucks
reduce the flexibility of coffee and coffee house business strategies (Charter, 2017). As Starbucks make
the generalised standard for their created beverages in the market. These activities comes in the result
of reducing products' alignment with local market and associated consumer preferences. In addition
with the weaknesses, many of the Starbucks products are imitable. Which means most of the
competitors can open the business outlets and provide the products which are not exactly same quality
but can be provide the same product at the cheaper rates. Even the competitors can provide the same
ambience and design of the company's products.
Opportunities: There are various opportunities for the Starbucks which can increase the
revenue and market share of the company. Company can expand the business in the developing
countries like Australia, where the Starbucks have minimum outlets as compare to other countries.
Starbucks have the long-term stability in many countries, which help the company to make the
diversification in the business products and analysis by generic competitive strategies and intensive
growth strategies. Another opportunity for the company is that they can start more partnership with
other businesses (Gladka and Fedorova, 2019). As alliance with the new retailers improve the
distribution and market share of the company's consumer good. Starbucks can improve the industry
positions by increasing the operations in the global industry environment.
Threats: The main threat to the company is competitive markets in the international level. Most
of the competitors open their outlet at the very low cost as compare to the Starbucks price. It give the
threat to the company as it can reduce the market share of the company. Another threat is threat of
imitation, as here any firm can try to copy paste the product which is supply by Starbucks. Independent
coffee house movements, this function support the small events and small sectors business and local
business. It oppose the expansion of the business of multinational business in the different countries of
the Starbucks. Successful campaigns and a good branding strategies can help the effect of the business
trends. International expansion and market penetration can impose the challenges in the international
business market in Starbucks.
The competitive environment of the Starbucks can be provide the potential impact on the
marketing mix. As product, price, promotion, place are the main 4 marketing mix models which help the
Starbucks to make the good strategies to get the higher market share (Renko, 2018). Customers

preference, priorities and need also affect the company's marketing mix strategies. With the help of STP,
PEST and SWOT can help the company to achieve the desired objectives with the help of strategic and
operating activities.
PEST analysis
PESTEL analysis is a tool to analysis the external factors or issues which can affects the business
environment. PEST is the another form of PESTEL analysis. It contains of political, economical, social and
technological factors that can affects the environment of Starbucks. By making effective use of PEST
analysis, company can creates those factors as the opportunities or threats. Let discuss this in detail:
Political and legal: Factors which can considered in political factors are tax policy and
employment laws etc. Starbucks needs to follow rules and regulations that is made by Australian
government for imports and exports of its products or machines. Activism and increasing political
awareness are made this as essential for the company. Government now encouraging to make
employment in the country. So this can create opportunity for the company if they provides jobs to the
people of Australia.
Economical: Economic factors includes currency exchange rates, taxation level and interest rates
(Perreault, 2018). This external factor impacts the profitability of the business. If there is economic
recessions then it leads to shift the customers on cheaper products and resulting decreased in
profitability of the business. This can become a threat for the company.
Social: Social factors includes change in customer preferences, lifestyles, work patterns etc. So,
to attract more customers of lower and middle income people then company should have to lower its
prices. But for doing this, company should have to make quality cheaper than before. This creates
challenge for the company as it needs to attracts both the customers of high and lower level people. It
customer does not find good quality then they may shift to another brand. This occurs in threat for the
company.
Technological: Technological factors creates a large impact on company's profitability. These
includes automation, technology incentives and development of agricultural etc. Starbucks has
introduced use of new technologies that is mobile payments and Wi-Fi facilities to customers (Groucutt
and Hopkins, 2015). Or they can order online also. This can attract more customers towards the brand.
These are the various factors which can impact the company's marketing mix. Competitive
advantage helps in gaining marketing mix. Product taste and pricing is the another reason if customers
are coming in the company or not. Promotional strategies are the next challenge for the Starbucks to
compete with its competitors. Because there advertisement is not that much effective in Australian

market that they can attract customers and this results in falling demand of the brand. Target market
can be through STP process. It is by segmenting, targeting and positioning of the product (Lane, 2015).
Customers needs can be finds out by making segment of the population and then targeting the groups.
Starbucks mainly target the youths of the country. Then positioning is the presenting of the product. It
could be attractive. Marketing mix helps the company in creating its brand, where to place it by
targeting audience. What price should be made for the product according to the budget of the company
and customers demand. This helps the company in making profitability and revenues.
CONCLUSION
From the above essay it is concluded that, the swot and pest analysis of Starbucks can help the
company to get the desired objectives. At the same time these analysis help the company to make a
position in the market of Australia. Issues and competitions for the Starbucks are analysis and evaluate
the factors which may affect the business and their policies too. Pest analysis help the company to make
the strategies which relate to the external macro environment factors.

REFERENCES
Books and Journals
Kehinde, O. J. and et.al., (2016). Marketing concept and the satisfaction of consumer needs: the Nigerian
consumers’ experience. Researchjournali’s Journal of Marketing. 4(1).
Mothersbaugh, D. L., Hawkin, D. I., & Kleiser, S. B. (2019). Consumer behavior: Building marketing
strategy. McGraw-Hill Higher Education.
Charter, M. (Ed.). (2017). Greener marketing: A responsible approach to business. Routledge.
Gladka, O., & Fedorova, V. (2019). Defining personnel marketing strategies. Business: Theory and
Practice. 20. 146-157.
Renko, S. (2018). The Concept of Sustainable Development. The Sustainable Marketing Concept in
European SMEs: Insights from the Food & Drink Industry. 29.
Perreault, W. D. (2018). Essentials of marketing. New York: Mc Graw Hill.
Groucutt, J., & Hopkins, C. (2015). Marketing. Macmillan International Higher Education.
Lane, P. (2015). Human resources marketing and recruiting: essentials of employer branding. In
Handbook of Human Resources Management (pp. 1-30). Springer, Berlin, Heidelberg.