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Starbucks Corporation (SWOT Analysis)

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

Starbucks Corporation

Starbucks Corporation (Starbucks) is primarily a retailer of specialty coffee. Starbucks operates in the US, the Asia Pacific region, Greater China (China, Hong Kong, Macau and Taiwan), the Europe Middle East Africa (EMEA) region, and Latin America. The company is headquartered in Seattle, Washington and employs about 176,000 people.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Strong brand equity lends a competitive edge
  • Wide geographic presence
  • Strong research and development capabilities ensure product quality

Weaknesses

  • Class-action lawsuits threaten brand image
  • Heavy restructuring and store operating expenses impact profits

External

Opportunities

  • Strategic transformation initiatives in FY2009
  • Launch of Starbucks VIA Ready Brew instant coffee
  • Licensing agreements

Threats

  • Consumer spending adversely impacted by global economic downturn
  • Increased minimum wages in the US
  • Increasing health consciousness among American consumers
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