Opportunities •Expansion into retail operations •Technological advances •New distribution channels (delivery) •New products •Distribution agreements •Brand extension •Emerging international markets •Continued domestic expansion/domination of segment Threats •Increased competition from coffee shops and others (restaurants, street carts, supermarkets) •US market saturation •Coffee price volatility in developing countries •Negative publicity from poorly treated farmers in supplying countries Consumer trends toward more healthy ways and away from caffeine •Fragile state of worldwide production of specialty coffees •Alienation of younger, domestic market segments •Corporate monster image •Cultural and Political issues in foreign countries Strengths •High visibility locations to attract customers •Established logo, developed brand, copyrights, trademarks, website and patents •Company operated retail stores, International stores (no franchises) •Valued and motivated employees, good work environment •Good relationships with suppliers Industry market leader with a globally renowned brand •Customer base loyalty •Product is the last socially accepted addiction •Widespread and consistent •Knowledge based Weaknesses •Lack of internal focus (too much focus on expansion) •Ever increasing number of competitors in a growing market •Cross functional management •Product pricing (expensive) Major Marketing Problem Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time.
The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk. The organization is dependent on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise. Losing touch with customers Consumer related trends overlooked
Little image and product differentiation between Starbucks and smaller coffee sellers Customers felt company more focused on growth and income and less on customer satisfaction Dynamic Customer Behavior “Typical” customer becoming younger, less affluent, and makes fewer visits Wants the product cheaper, faster, more convenient and less frequently Not there for the atmosphere Internal satisfaction scores misleading Despite high service scores customers not truly satisfied High correlation between customer satisfaction and loyalty Speed of transaction believed to be most important aspect of customer satisfaction dissonance