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Starbucks Corporation - Situational Analysis
Starbucks Corporation - Situational Analysis
Starbucks Corporation - Situational Analysis
Corporation
MKT 6A2 Situational Analysis
Rasmus Bender
S00705904 word count: 1163
Table of Contents
Starbucks Corporation ...................................................................................................... 1
1.0
Proactive
Reactive
Existing competencies of
existing related markets,
(Sweden & Norway)
Managerial Urge
Economies of scale
Technological competencies
Competitive pressures
Saturated domestic market
Overproduction
Psychic distance from
consumers
Finnish people consume an average of 12kg of coffee per person each year.
2013
2014
SOK (Presso)
44
42
Roberts Coffee
33
34
34
33
24
22
HeseCafe
18
18
4.5 TOWS
Describing SWOT analysis on domestic (American Market) converting it into TOWS
explaining target market (Finland). Full explanation of the SWOT analysis can be
found in appendices 7.1.
Starbucks corporation
WT
- Extend work covering
CSR (corporate social
responsibility)
- Comply and discuss
potential tax agreements
with existing and new
markets
Starbucks has gotten a taste of their customers through their store located
at the Helsinki airport. Foremost, Starbucks should locate their stores in
highly populated and frequently visited areas such as shopping malls and
shopping areas in Helsinki, Finland.
Starbucks target market would be all the frequent coffee drinkers that
reside in Finland. However, Starbucks state that they value high
convenience; by making their stores accessible through strategic geographic
locations.
- Age: 16+ as there is no age limit to coffee.
- Income: Finnish people value their coffee and as Starbucks is perceived as
a premium coffee retailer, middle to high income takers.
- Gender: Starbucks would target all genders
- Previous research mapping 10,000 Finnish coffee consumers, explain
that across all demographics 14% drink 10 cups of coffee or more each
day. (Coffee consumption, 1987)
10
Starbucks Corporation
SOK (Presso)
Roberts Coffee
McDonalds
11
6.0 Recommendations
The Starbucks Corporation should expand their operation of coffee shops to Finland
if:
1. The Corporation could penetrate the competitive market environment
2. They find a partner to enter the market, operating under licensee to further
understand the situation at host-nation
3. If their data from their store at Helsinki airport show positive cash flow, and a
sustainable financial position; showing that the Finnish market is valuable.
4. Existing competencies from previous expansion to neighbour countries is
applicable to host-nation (Finland).
The Starbucks corporation should not expand their operation of coffee shops to
Finland if:
1. The target market proves to be saturated and there is a declining demand of
coffee.
2. Its hard to find possible entry modes to penetrate the market.
3. If Starbucks cant differentiate themselves from their competitors.
4. The psychic distance between domestic and target market is to big.
12
Reference:
advantage.marketline, (2015). Starbucks Corporation. [online] Available at:
http://advantage.marketline.com/Product?pid=E86AFA79-07E1-4115-AA0C0016416541FE [Accessed 3 Nov. 2015].
Briney, A. (2015). Scandinavian Region. [online] About.com. Available at:
http://geography.about.com/od/europemaps/tp/scandinavia.htm [Accessed 7
Nov. 2015].
chambertradesweden, (2010). Swedish Market. [online] Available at:
http://chambertradesweden.se/wpcontent/uploads/2012/12/Coffee_Tea_Cocoa_juni2010.pdf [Accessed 3 Nov.
2015].
ChartsBin, (2010). Current Worldwide Annual Coffee Consumption per capita.
[online] Available at: http://chartsbin.com/view/581 [Accessed 7 Nov. 2015].
Coffee consumption. (1987). of Epidemiology and Community Health, (41), pp.237242.
Geert-hofstede, (2015). Geert Hofstede - Norway/Finland. [online] Available at:
http://geert-hofstede.com/norway.html [Accessed 7 Nov. 2015].
globalassets.starbucks, (2015). Company Timeline. [online] Available at:
http://globalassets.starbucks.com/assets/BA6185AA2F9440379CE0857D89DE
8412.pdf [Accessed 6 Nov. 2015].
globalassets.starbucks, (2015). Starbucks Company Profile. [online] Available at:
http://globalassets.starbucks.com/assets/F62C45CD8A8B4699BEFC60A2618F
0431.pdf [Accessed 6 Nov. 2015].
Hollensen S. Global marketing, 4th edition 2007, Pearson Education Limited, pp 63
Kelly, J. (2015). Coffee addiction: Do people consume too much caffeine? - BBC
News. [online] BBC News. Available at: http://www.bbc.com/news/magazine22530625 [Accessed 7 Nov. 2015].
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7.0 Appendices
SWOT analysis 7.1
Strengths
Starbucks is operating a highly competitive food & drink service at their retail space,
where keeping existing and attracting new customers is highly important. Through
selling their famous blends of coffee, soft drinks and food retained a global growth.
Starbucks is aware of the competitive environment and try to retain more and keep
existing customers by working on adding value to their in-house customers.
Starbucks offer their in-house customers free WI-FI and free subscriptions at their
stores to several big newspapers, as well as through ITunes letting customers
download exclusive material such as online books and music. They have
strategically located their coffee roasting business in Switzerland, selling coffee to all
of their company owned and licensing retailers. Letting Starbucks financially avoid
taxes that otherwise couldnt have been avoided. During the financial year of 2014
the company presented a steady growth at 12% for the European, middle-east,
African markets growing to $1,3 bln. (Marketline, 2015)
Weaknesses
During 2014 the company had several different product recalls, in form of Mugs that
didnt pass the inspections. Coffee blends that where not labelled correctly and
bottled juices that had swollen. The company has since 2012 been facing legal
actions against the company in forms of lawsuits, where U.K. and other European
countries claim that Starbucks is avoiding tax. (marketline, 2015)
Opportunities
Trends have shown that there is a growing concern in regards of health and lifestyle,
Starbucks has therefore tried to overcome these issues by entering the health food
market. During 2012 Starbucks opened up a new retail platform called Evolution
Fresh. The store would fill the purpose of only selling healthy food and beverages.
Furthermore, the projected growth in mobile commerce suggest that Starbucks
should find a solution to offer their customer base to some extent a service letting the
customer order and pay through their mobile phones. (marketline, 2015)
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Threats
The competitive environment for Starbucks and its coffee shops let the customer
base their consumer behaviour foremost on quality of products, pricing and service
as well as convenience. Regulations provided by both home and several hostnations suggest different labelling of products, that may affect Starbucks products,
forcing them to further develop different labelling strategies. (Marketline, 2015)
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