Strengths 1. Sound financial records 2. No. 1 brand best market share in coffeehouse segment valued at $4 billion : Starbucks profitability has been rising for the past few years and is now 14%. The company also outmatches its nearest competitors with 24.54% return on investment and 29.16% return on equity. 3. Mode of operation
good at investment and cooperation flexible according to the different market situation, 4. The deep cultural connotation 5. New product research and development and innovation 6. Starbucks experience One of the strongest advantages Starbucks has is the experience it delivers to its customers with perfectly blended coffee, premium music, friendly staff and warm atmosphere, which results in incomparable customer service. Guarantee of product quality and taste. 7. Largest coffeehouse chain in the world
The company operates around 20,000 coffeehouses in 60 countries, making it the largest coffeehouse chain in the world. 8. Employee management The company offers its employees extensive range of benefits and a pay rate higher than offered by competitors.
Weaknesses 1. Coffee beans price is the major influence over firm’s profits. Starbuck’s profitability and its coffee price are largely dependent on prices of coffee beans, which is a commodity and cannot be controlled by Starbucks. Due to hedge funds, weather conditions and many other factors, Starbucks cannot estimate the price of tis coffee and company’s profitability. 2. Product pricing, in china people think it is to expansive. McCafe premium coffee was price lower than Starbucks coffee and was better evaluated. 3. Negative publicity
The Term Paper on Specialty Coffee Starbucks Company Market
Michael Porter, a Harvard Professor introduces his ideology of the Five Forces model that shapes the competition in the industry. Each force is interrelated and therefore leads into the other to show the elements directly involved in the further success or ultimate success of the firm. Starbucks Coffee Co. throughout its existence since 1971, with its great management team, innovative style of ...
Opportunities 1. Extend supplier range 2. Expansion to emerging economies 3. Increase product offerings 4. Expansion of retail operations 5. Chinese market Threats 1. The rising cost of raw materials , Rising prices of coffee beans and dairy products 2. Trademark infringements 3. The imbalance of regional development : cultural diversity , The income gap 4. Substitute Goods : tea and Refreshing energy drinks 5. Many realistic and potential competitors: coffee trade, convenience stores, designated coffee machine, etc . Increased competition from local cafes and specialization of other coffeehouse chains 6. Saturated markets in the developed economies:Coffee markets in the developed economies are already saturated and with intensifying competition, Starbucks will find it hard to grow in these markets. 7. Supply disruptions:Due to political, economic and weather conditions Starbucks may experience supply disruptions, adding significant cost to the firm.
