Starbucks Coffee

Posted on January 27, 2013
By Yohana Megawati (http://yohanamegawati.wordpress.com/author/yohanamegawati/)
Group Members:
1. Raynard Tantra
2. Shintia Dewi
3. Siti Damayanti
4. Yohana Megawati
5. Zhen Yaduo
6. Zhou Xiaobing

Starbucks is the coffee corporation that well-known in this entire world. As the corporation, of
course they have strengths, weaknesses, opportunities also threats to become the analysis for
the corporation improvement. So, here the SWOT analysis of Starbucks:
Strengths
- Product Diversification
Actually the main product of Starbucks that make this corporation famous and well-known is
the coffee, but nowadays in Starbucks store there are product diversifications such as: dessert,
cake, merchandise, tea, tumbler and others. It strengthens the position of Starbucks so the
customers have another choice beside coffee.
- Good Services
In each of every store of Starbucks, the baristas (the coffee maker of Starbucks is called) are
friendly. They got very well training and there is no script for the conversation between the

baristas and the customers. They usually give buy one get one free coffee or others like fill in the customer voice and get the tall Starbucks all variants.Cozy Places The ambience of the stores make the customers comfortable and like to add Starbucks as their destination to hangout. .Product Innovation . – Over Expand Expansion is the one of the good way to enter the international market. This corporation creates the Top of Mind brand for the customers. vice versa. One of the strategies is the surprise and delight. If the customers are businessman or the formal person they use formal words to threat them. but if the customers are youth they use daily conversation. Opportunities . talk about business and others. it can be the strength of the other competitors against Starbucks. Weaknesses – Pricing The price of the Starbucks is the weakness of their corporation. which is the same brand. chitchat. Every one knows about this brand now. so the competitors of the store A is store B. Example: in Plaza Indonesia there is two stores available there. . It costs too high and the market of their product is from middle to high class. Starbucks also open to critics from the customers and give the good feedback after it. So.Brand Recognition This is the one of the best strengths of Starbucks. Brand recognition of Starbucks is all around the world.Surprise and Delights Marketing strategy is the one of the strength that Starbucks implemented to maintain the customers’ heart. but over expand that Starbucks did it can be the self cannibalization for this company. .

for the example the existence of The Coffee Bean Shop. – Global Crisis The Global Crisis of the world can affect the development of the Starbucks. For the example. Co donuts and coffee. J. Global crisis can make the purchasing power of the customers decrease and it can affect the sales of the stores. – Lost of identity .Embrace New Market (Middle-Low) The market of Starbucks is for the middle to high class based on the price so Starbucks have the opportunities to embrace the market from middle to low class. .Lack of Ownership Coffee Farm Starbucks doesn’t have any coffee farm by owned. etc. The problem that caused by his wrong decision making were over expansion. This corporation still buys from the farmers.New product that Starbucks never create it can be the opportunities for their future. If the coffee seeds are scarcity it can make the price more expensive and also it can lead the price fluctuations. This led to self cannibalism which means that the branches were competing to each other because too many Starbucks stores opened in a particular place at a short distance. for the example with the student card discount or the free drinks for one day full. This was the problem when Starbucks opened too much branches by almost 5 stores in a day. . Starbucks can make the coffee candy or the innovation of the merchandise so they can get a new market. Threats – Competitors Competitors are the most visible threats for Starbucks. Major Impediments: – Over expansion There was a time when Starbucks was facing a big crisis during the period of CEO Jim Donald (2002-2008) which known to concern more about the profit and ignoring the consequences of every decision that were taken by him. so it can affect the sales for them.

(Based on the Howard’s book with title “Onward: How Starbucks Fought for Its Life without Losing Its Soul) Available solutions: . – Clover Machine Replace the automatic machine with the clover machine which is the semi automatic one to keep its originality and its quality control by maximizing the skill of the well trained employees in making the coffee. We choose this as the major impediments of Starbucks because the problems that Starbucks had in the reality came from the internal factor which is the over expansion and the lost identity came from the internal decision. Usually.Replace the CEO Replace the CEO Jim Donald in order to recover the crisis in Starbucks. replaced by the cold touch of the machine.Close some of its branches Starbucks was closed 400 stores to reduce the over expansion that was happened in the reign of CEO Jim Donald. so over expansion that Starbucks did just make it as the boomerang for the company itself. It is intended to reduce the self cannibalization. . but too much is not good. there was high expectation to change the management that was known as profit oriented which considered as inappropriate to be applied in Starbucks during his period. – Display the coffee in the queuing line . By replacing him. expansion used by the company as the strength of them. but still keep its originality by using the coffee as its main ingredients without losing its original taste. This replacement made the Starbucks lost its original taste which previously done using the skill of well-trained employees.This was the problem when Starbucks replace all of its traditional machines to automatic ones. – Keep its originality Starbucks keep increasing their product variation.  No more coffee smells: The Starbucks once lost its originality by creating the product variation which was not using the coffee as its main ingredient and replacing it with another taste.

G. SWOT Analysis Starbucks. J. (2011).By displaying the coffee seed in the queuing line. So the best solution to overcome the major problem is to replace the CEO of Starbucks from Jim Donald to Howard Mark Schultz. The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary: McGraw-Hill. (2008). J..com/swot/starbucks-swot. J. to overcome the problem we should find and eradicate the main cause.marketingteacher.co. B. Retrieved September 19 2012.com%2Fdonald%2Fresume%2Fportfolio%2FStar bucks. A.ppt&ei=kL9ZUMS0B8zhrAfzgYHwCA&usg=AFQjCNFIkrrnH2OneozrxYaFJrmJ63XeTQ&sig 2=Y9Dr1972yevX-xqIp-R1lg Howard Schultz.loudoffice.html# 19. 2012. Learn from the experience. from http://www. from .id/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&ved=0CEA QFjAF&url=http%3A%2F%2Fwww. NN. Michelli. REFERENCES Adam Berger. Starbucks “Th Frappucino”. Retrieved September http://www.google. will increase the possibility that the customer can clearly smell the fragrance of the coffee. Donald Chase & Suzana Hsu. Onward: How Starbucks Fought for Its Life without Losing Its Soul Rodale Books. because the major problem came from the former CEO who is Jim Donald.

(2008).rizal. 2012. SWOT analysis.com/doc/3972739/Starbucks-Swot-Analysis 2012.scribd. Retrieved September http://www. from .