SWOT ANALYSIS

Strengths:
 High Sales growth
 Recession proof product
 Great distribution channel, almost 4500 company oriented stores.
 Able to capture the niches
 Premium priced coffee
 Dominant specialty-coffee brand in 2002 over the nation.
 Able to open new stores
 5000 stores over the world
 No advertising cost.
 Creates a coffee experience
 Controlled distribution to their retail stores all over the world
 Pleasing retail service for customers
 Customer loyalty
 Pleasant environment
 Retail stores located on high visibility areas, like office building, universities and high
traffic areas
 Many different varieties
 Having product mix for different stores
 Having non-company oriented retail channels
 Licensing domestic retail stores
 Strong supply chain
 Satisfying partners
 Motivated employees
 One of the best places to work at
 Lowest employee turnover
 Provides training for employees
 Customer satisfaction through payment facilities.
 Customization product
 Focusing on employee efficiency
 New products were launched on regular basis
 R & D for product innovation
 Frappuccino beverages being the cash cow for Starbucks
Weaknesses:
 Not meeting customer expectation
 Hourly wage rate system
 No communication with customers
 Complex job for employees
 More delivery time for customized coffee
 Putting strain on employees catering to the coffee needs of customers
 Lacking strategic marketing group
 No CMO(Chief Marketing Officer)
 Marketing department working on three different groups
 Service gap

Opportunities:
 Wide market for coffee customers
 A place to relax
 Many suppliers ( sources ) available from all over the world
 Hire more employees
 Automated espresso machines
 Increased coffee consumption
 Can increase number of stores
 BIG market for coffee consumption
 Availability of international market
 Can bring service time down
 Having the opportunity to build stronger long term relationship with customers

Threats:
 Small scale coffee chains like Gloria Jean’s coffee and Barnie’s coffee & tea.
 High wage rates in urban areas
 Competitors trying to differentiate themselves from Starbucks
 Differentiating on environment
 Califronia-based Peet’s Coffee & Tea charging premium price for the quality product
 Many different product mix offered by independent specialty coffee shops
 Competing against Dunkin Donuts which attributing half of the sales to coffee and was
offering better varieties of coffee.
 Less product differentiation between Starbucks and smaller coffee chains
 New customers being less frequent and less educated and having lower incomes
 Starbucks not meeting customer expectations