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Starbucks Swot Analysis

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Strategy Analysis MGMT 562

Rusty Gates Margaret Hogan Liberty McCarty Anita Ramachandran Tony Reed

TABLE OF CONTENTS Executive Summary…………………………………………………………….3 Introduction……………………………………………………………………..4 External Analysis……………………………………………………………….5 Suppliers………………………………………………………...…….5 Customers………………………………………………………..……5 Competitors…………………………………………………………...6 New Entrants………………………………………………………….7 Substitutes……………………………………………………………..7 Opportunities and Threats……………………………………………..8 Internal Analysis………………………………………………………………..8 Strengths………………………………………………………………8 Weaknesses…………………………………………………………...9 Value Chain, VRIO Framework, Core Competencies……………….10 Key Strategies………………………………………………………………….11 Investment Recommendation………………………………………………….12 References…………………………………………………………………….13

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Executive Summary Starbucks Coffee Company, founded in 1971 is headquartered in Seattle, WA and operates in 37 countries around the world. The backbone of Starbuck’s business is its company-operated retail stores. Starbucks has employed a strong differentiation strategy in order to turn a traditional $.50 commodity into a $4 experience. This following report provides an analysis of the strategies used by Starbucks to stay on top of its growing and volatile industry. Starbucks’ governing principles are based on three strategic stances: the third place experience, creating a human connection, and providing a quality everyday experience for customers. The specific strategies used by Starbucks include: • Horizontal Integration: acquisitions of Seattle’s Best, Torrefazione Italia and Coffee People • Market Penetration: differentiation and product placement outside of retail stores • Market Development: educating the consumer about specialty coffee • Concentric Diversification: release of bottled drinks, Ice Creams, and Liqueur • Conglomerate Diversification: expansion into music and…...

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