SWOT Analysis of Starbucks - Assignment Example

? Planning Introduction Starbucks Corporation is regarded as one of the biggest worldwide coffee companies throughout the globe. It has nearly 20,891stores in around 60 countries in the world and is well known for its coffee based products. Though the company is considered to generate record earnings in the current year, it also suffered from heavy losses in preceding years. It is worth mentioning in this similar concern that rapid advancement of technologies and advent of globalization are providing broad opportunities to other business firms in expanding or establishing themselves in the global market creating threats for Starbucks (The New York Times Company, 2013; Steverman, 2009). With this concern, this paper intends to discuss about how Starbucks managed to come to its current position with respect to record earnings in the context of a SWOT analysis. Discussion SWOT analysis is a method or a study which is usually adopted by an organization to evaluate its internal strengths along with weaknesses and external opportunities as well as threats (United States Department of Agriculture, n.d.). The following discussion has been made within the circumstance of SWOT analysis of Starbucks which would reveal about how Starbucks has managed to come to its current position with respect to record earnings. Strengths: Strength is usually considered to be the internal factor which helps an organization towards efficiently achieving its expected organizational goals. In comparison to other coffee house chains in the world, Starbucks is pretty much known to almost every one. The company is renowned to serve its customers with quality as well as standardized products which eventually made the company to earn record earnings in this present day context by a certain degree. In terms of strength, it can be viewed that the company has been listed in the 7th position as one of the finest companies to work for in the year 2008. Though it has been viewed that the number of competitors are increasing at a rapid speed, certain aspects like superior brand awareness, attractive financial position and its strategy of expanding into new business are considered to be vital strengths of the company (SlideShare Inc., 2013). Weaknesses: While most people think Starbucks coffee as a luxury good and is ready to pay any price for it, but the increasing cost in its products has been debatable amid several customers. It has been viewed that there is a constant change in the price of its coffee based products. The main weakness of Starbucks can be apparently observed as that its entire business is mainly dependent on its coffee based products. Whereas, it’s one of the competitors named Dunkin’ Donuts is involved in performing various sorts of businesses. In addition to its increasing cost of the products, it has also been viewed that the company has also lacked in handling international relations in the past. It is worth mentioning that coffee is duly regarded as a substitute product denoting that people are willing to change their preferences, if there lay high increase in the price level of the products (Higbee, Liaw, Ting, Tjho & Ton, n.d.). Opportunities: One of the best opportunities which is helping and would help Starbucks to maintain its leading position in the coffee industry is technology. The company has been viewed to implement new technologies that not only help to enhance its overall performance but also to come to its current position with respect to record earnings through making continuous research and development (R&D). Specially mentioning, acquisition of certain renowned companies such as Seattle’s Best, XM Cafe, and Tazo Tea has also helped Starbucks to expand itself in various parts of the world resulting in strengthening its current position with regard to record earnings by a significant level. Furthermore, acquisitions of certain other companies like Bay Bread and its La Boulange bakery can also be considered as providing major opportunities for Starbucks by a certain degree. The strategy of Starbucks to expand itself in global business markets having collaboration with leading industries might helped the organization to come to its current position with respect to record earnings (Higbee, Liaw, Ting, Tjho & Ton, n.d.; United States Securities and Exchange Commission, 2007). Threats: The greatest threat for Starbucks in the coming days is the increasing business market competition in the global market. Competitors like Dunkin’ Donuts and McDonalds among others have already established their setups in various places across the globe and have also been viewed to add quality coffees in their menus in order to provide tough competition to Starbucks. It is worth mentioning that Dunkin’ Donuts has collaborated with Green Mountain Coffee Roaster (GMCR) for manufacturing K-cups which can be considered as a major step for competing Starbucks. Other factors that can be viewed as major threats for Starbucks are economic recession and rise in the cost of raw materials such as coffee and dairy products that acts as principle products of the company (Higbee, Liaw, Ting, Tjho & Ton, n.d.; Forbes.com LLC, 2013). With reference to the above discussion, it can be affirmed that Starbucks has managed to come to its current position with respect to record earnings by a certain degree. But the rising business market competition can impose unfavorable impact upon the overall performance of the company. Moreover, certain other vital factors like issues in the management process and the increasing price of the raw materials can also negatively impact the company at large. In response, the company needs to adopt as well as execute certain effective strategies. These strategies might comprise producing as well as offering quality products to the customers and applying pioneering technological advancements in its various operational procedures among others (Higbee, Liaw, Ting, Tjho & Ton, n.d.). Conclusion From the above analysis, it can be inferred that though Starbucks is regarded as one of the leading business houses in the coffee industry, lack of implementing effective strategies in its working process may result in decreasing the current position of the company in the global market. With reference to the SWOT analysis, it can be concluded that Starbucks managed to come to its current position with respect to record earnings by a certain degree. However, the company should produce quality products and employ advanced technological advancements in order to mitigate one of its potential threats i.e. rising business market competition in future. References Forbes.com LLC. (2013). Green mountain coffee brews big turnaround with Starbucks' help. Retrieved from http://www.forbes.com/sites/zacks/2013/05/29/green-mountain-coffee-brews-big-turnaround-with-starbucks-help/ Higbee, Z., Liaw, C. Y., Ting, C., Tjho, K., & Ton, M. (n.d.). The future of Starbucks. Retrieved from http://www.mcafee.cc/Classes/BEM106/Papers/2008/Starbucks.pdf Steverman, B. (2009). Is a turnaround brewing for Starbucks? Retrieved from http://www.businessweek.com/investor/content/jul2009/pi20090722_611028.htm SlideShare Inc., 2013. Starbucks powerpoint. Retrieved from http://www.slideshare.net/jjhackn/starbucks-powerpoint-9960115 The New York Times Company. (2013). Starbucks corporation. Retrieved from http://topics.nytimes.com/top/news/business/companies/starbucks_corporation/index.html United States Department of Agriculture. (n.d.). SWOT analysis: A tool for making better business decisions. Risk Management Agency, pp. 2-10. United States Securities and Exchange Commission. (2007). Starbucks corporation. Retrieved from http://media.corporate-ir.net/media_files/irol/99/99518/200710K.pdf Read More