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Background
The purpose of this paper is to analyze the internal environment of the US coffeehouse chain Starbucks. It is extremely prominent in the coffee market successfully staying ahead of competition. However, recent global dynamics force companies to reevaluate their business models and strategies, and Starbucks is no exception. A SWOT analysis will provide a comprehensive outlook on the current state of the company and the internal factors comprising its environment.
Strengths
The first strength is corporate culture that nurtures brand awareness and loyalty of middle-class customers. The second strength is the corporate structure that allows Starbucks operate more than 30 000 stores in multiple markets across the world (Lombardi et al., 2021). The third strength is financial sustainability, which manifests in consistent annual growth rates over the recent years (Lombardi et al., 2021). The fourth strength is the logistics of coffee bean supply that is provided by farmer support centers and roasting plants operated directly by Starbucks. The fifth strength is research and development capabilities that allow the company to constantly improve its growing techniques as well as production. The sixth strength is efficient human resources management, which allows the company to hire and train employees who are dedicated to providing qualitative services.
Weaknesses
The first weakness is Starbucks matrixed corporate structure that inevitably appalls potential customers who dislike the expansion of multinational corporations. The second weakness is the growing complexity of logistical operations that results in the lowered quality of service and products (Lombardi et al., 2021). The third weakness is vulnerability of the corporate culture, which is built around the notion of a coffeehouse being a third home, to quarantine measures and lockdowns. The fourth weakness is growing costs pertaining to operating coffeehouses, which negatively affect the companys balance sheets.
Opportunities
The first opportunity is enhancing marketing resources via expanding the target audience to include customers with different levels of education as well as income (Lombardi et al., 2021). The second opportunity is to use substantial financial resources to fund new ventures into foreign markets. The third opportunity is utilizing information technology to diversify product delivery, which is an essential service for successfully competing in the modern world.
Threats
The first threat is the possibility that Starbucks competitors will utilize the lack of Starbucks marketing emphasis on low-income customers and use it as a selling point in their own marketing strategies. The second threat is that financial resources will dwindle due to a possible decrease of the purchasing power of the companys customers and the growing unemployment (Lombardi et al., 2021). The third threat is that that the information technologies of competitors enabling fast and varied product delivery will sway customers who value efficient online services.
Summary of Internal Factors
Altogether, six strengths, four weaknesses, three opportunities and three threats constitute the internal environment of the company. The strengths are matrixed corporate structure, corporate culture supported by brand loyalty, financial sustainability, efficient logistics, substantial research and development capabilities, and efficient practices in human resources management. The weaknesses are the negativity attached to the status of a multinational corporation, lowering quality of products and services due to rapid corporate expansion, vulnerability of corporate culture to lockdowns, and steadily growing operational costs. The opportunities are reaching a wider audience, further expansion, and improving product delivery services. The threats are competitors attractiveness, lowering purchasing power of customers, and insufficient diversity of delivery services.
References
Khan, S. K. B. N. Z., Yusop, Y. B. M., & Baharudin, F. B. W. (2018). Starbucks market segmentation and targeting. International Journal of Business and Management Invention (IJBMI), 7(5), 44-45. Web.
Lombardi, C. V., Chidiac, N. T., & Record, B. C. (2021). Starbucks coffee corporations marketing response to the COVID-19 pandemic. Innovative Marketing, 17(2), 177.
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