For most of us, our first cup of joe comes from Starbucks! The iconic coffee takeaway cups with our names written on them made the brand a caffeine favorite in very little time. Ever wondered what made the brand shoot to exponential fame? What are the brand’s strengths that it enjoys over other beverage moguls? Should the brand be worried about other brands inching close towards its title? What comes at play here is a Starbucks SWOT analysis!
Typically, a SWOT analysis lets a business evaluate where it stands using a strategic process. In the case of Starbucks as well, the SWOT case study would help the brand understand the opportunities that it should grab or how to manage a limitation. Using the analysis, the brand could be able to assess the competition in the market as well. But, the significance of a SWOT analysis goes beyond just this.
So – Why is a SWOT Analysis important?
Using SWOT analysis, Starbucks can stop what it is doing and assess where the brand is going wrong. A SWOT analysis also lets the company sits down with the internal stakeholders to discuss opportunities and threats and the short and long-term goals of the company. According to a survey conducted on new, old, small, and big brands, 61 percent of the companies acknowledged the struggle in implementing the strategy formulation.
In what follows, you will find the benefits of preparing a SWOT analysis for Starbucks. Here we go!
1. It can analyze any situation
A Starbucks SWOT Analysis can be applied to any situation – good or bad. It can be used when the company feels a threat in the market when it is earning more than the estimated profit or less than what was expected.
The analysis will tell you how to beat the competition or let you understand what you are doing differently that is fetching you more profit.
2. One tool can tell four stories
SWOT analyses are a favorite among most brands because they can save a company a lot of time – time they can use to implement changes. Unlike other evaluation tools that assess just one scenario at a time, a SWOT analysis will be able to show Starbucks it’s standing from four angles at one time.
Accordingly, business leaders can discuss the pertinent issues rising in each squadron.
3. It leads to comprehensive data integration
A SWOT Analysis is usually a combination of quantitative and qualitative information. With this data available at hand, the business executives of Starbucks will be able to improve the strategic plans of the brand.
Moreover, a SWOT analysis is more of a collaboration between all the business departments – finance, marketing, production, and other segments. This would, in turn, improve the quality of communication, thus leading to better decision-making.
4. It does not cost much
When a brand is already running at a loss, it would not want to spend money trying to understand why it is losing money. That is plain common sense. A SWOT analysis is a cost-effective method to ascertain what is going wrong in the company. Starbucks will not have to spend on an expensive piece of software or hire consultants for expert guidance.
All it will take someone is to gather information within the brand as some from outside. The person should know how to draw up a spreadsheet and fill out a SWOT Analysis.
5. It is a simple process
None of the Starbucks employees will need any special training or technical skills to carry out SWOT analysis. Any employee who knows how to research and dig deep will be able to get the job done in some time. And, it isn’t just about preparing the analysis.
A SWOT analysis is also easy to understand, even for people with little technical knowledge about a department. For example, the accounts departments will be able to understand the marketing strategies. This will quicken the process, thus benefitting the company as well.
6. It helps the brand play offense and defense
When business leaders of any brand decide to prepare a SWOT analysis, it helps them uncover more profitability opportunities. They also get the chance to fend off competitors in the market.
Basically, a Starbucks SWOT analysis helps you create a plan of attack by maximizing your brand strengths and managing threats depending on the scenario.
Like everything, a SWOT analysis isn’t perfect either and comes with a few limitations. Every business executive must consider these limitations while planning a strategy for the brand. On that note, here are five limitations that you must be aware of when preparing a Starbucks SWOT analysis:
- The SWOT analysis can become overwhelming to assess if you are not clear about what to prioritize.
- The tool may fail to offer clarity as some factors may show up twice, making it vague.
- Since a SWOT analysis may be biased due to the perspective of the person preparing it, you may not be able to access objective data.
- Several people like managers, departmental heads, team leaders, and frontline employees may be involved while preparing a SWOT case study. This may lead to too many opinions.
Now, there are things that you can do to combat the limitations. Here are some steps that you can take:
- Ensure that the group that prepares the SWOT analysis is not too big, even if it comprises people with various positions and demographics.
- There should be one independent facilitator in the team who is not driven by biases to prepare a comprehensive SWOT analysis.
- There should be clarity and a proper objective based on which the SWOT analysis will be made.
- While preparing the SWOT analysis, you must keep a competitive advantage in mind.
- You must know where to look for the right information. For example, core resources can tell you about Starbucks’ strengths and weaknesses. Also, assess the competition to understand the opportunities and threats.
Starbucks is a huge company. But, it does not mean that the brand will continue to be at the top always. However, if you want to ensure a more long-lived success of the brand, you must study the areas the brand lack in and what it can do better. Make sure to assess every point minutely and with a subjective eye. Also, eliminate the limitations using the tips mentioned.
Cheers to the hope that Starbucks will continue to make our mornings and coffee dates better!