KOLEHIYO NG LUNGSOD NG LIPA

Marawoy-Dagatan, Lipa City, Batangas 4217

BUSINESS ADMINISTRATION Department
Operations Marketing Financial

Kolehiyo ng Lungsod ng Lipa
Brgy. Marauoy-Dagatan Lipa City

Business Administration Department

In Partial Fulfilment
of the Requirements
in Strategic Marketing Management

SWOT Analysis: Starbucks Corporation
Submitted by:
FUNDAMIERA, Janine Elizabeth S.
LANDICHO, Ronel John O.
GUTIERREZ, Christine D.
NAYANGA, Karla Anne G.
QUITAIN, Geraldine Jane S.

Submitted to:
Miss Marie Joahnna Magaling Aranda
Subject Instructor

April 8, 2014
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
Strength
1. In a short, succinct statement, Starbucks vision is To inspire and nurture the
human spirit one person, one cup, and one neighborhood at a time.
Through the years, Starbucks have shown their attachment with their
vision that all Starbucks customers are aware of the companys vision and
became part of it. This vision has also been used in Starbucks advertisement
and has been a guiding statement in their management. Until now, the spirit
of this vision can be felt in any Starbucks retail stores which resulted in a
continuous patronage of Starbucks drinkers.
2. In 2009, Starbucks began grinding coffee each time a new pot is brewed so
that customers will smell the coffee aroma all day long.
This change is part of the companys effort to reinvigorate the
Starbucks experience in the face of heavy competition.
3. Starbucks strives to elevate the simple task of drinking coffee to a new level
with its retail outlets seen as a place for socialization, relaxation, and
reflection.
Starbuckss stores are designed to make customers comfortable. In
addition, they also provide electrical outlets and wireless access.
4. Starbucks introduced the Starbucks card with the hope of strengthening
customer loyalty by improving service.
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
Customers are able to register their Starbuckss cards on the
companys website and receive nutritional information about Starbucks
products, shop online, search for careers, and much more.
5. Starbucks products can be found in convenience stores, grocery stores,
department stores, movie theatres, businesses, schools, and even airports.
This effort will provide the company the opportunity to increase sales,
and product availability as well as to reach different market segments.
6. Starbucks is rated by ten Fortune as one of the best top 10 places to work.
Starbucks relies more on its image advertising than traditional
advertising where customers not only view the retail outlet but how
responsible the company is to their communities and employees.
7. In response to recent economic times, the company has also adjusted prices
on certain of its more popular products in an effort to show responsiveness to
the more budget-conscious consumer.
This change might have a direct affect to the companys revenue but it
will serve as a way on reaching a different market segment which in return will
generate profit for the company in the long run.
8. Licensing revenues increased primarily due to higher product sales and
royalty revenues as a result of opening 438 new licensed retail stores in the
U.S. segment and 550 in the international segment in the last 12 months.
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
Starbucks only strength when it comes to sales is its growing revenue
from licensing operations not only in the U.S. segment as well as the
international segment.
9. Starbucks closed 600 underperforming stores in the United States in 2008
and plans to open only about 200 stores in 2009.
The U.S. market has been penetrated by different specialty stores that
Starbucks experience a dramatic slowdown in their sales. This decision can
be a companys strength since Starbucks is now on the realization of limiting
investment on the U.S. market and began focusing on the international
market where more opportunities awaits.
10. Starbucks expects to add approximately 20 net new stores to its global store
base in fiscal 2009 by closing approximately 425 company-operated stores in
the United States and adding of approximately 60 company-operated stores
internationally.
11. The company plans to open approximately 65 net new licensed stores in the
United States and approximately 320 net new licensed stores internationally.
12. Capital expenditures for fiscal 2009 are expected to remain unchanged at
approximately $600 million.
13. Starbucks ensured quality coffee by opening a Costa Rican support office for
coffee farmers and rewarding environmentally responsible farms through its
CAF Practices program.
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
Weaknesses
1. Starbucks income statements and balance sheets reveal continuous growth
in revenues, but a 47 percent drop in earnings in one year.
For the 26 weeks ending March 2009, Starbucks revenues decreased
7 percent to $4.95 billion and net income decreased 72 percent to $89.3
million. The U.S. company operated retail business continued deteriorating
trends.
2. Moodys Investors Service recently downgraded Starbucks credit ratings.
3. For the second quarter of fiscal 2009, U.S. total net revenues were $1.8
billion, a decline of $ 131.5 million, or 6.8 percent, due to decreased revenues
from company operated retail stores.
4. Many of Starbucks International operations are in early stages of
development that require a more extensive support organization relative to
the current levels of revenue and operating income in the United States.
5. International total net revenues were $433.7 million for the 13 weeks ended
March 29, 2009, down $59.7 million, or 12.1 percent, compared with the
same period last year, primarily due to the impact of a stronger U.S. dollar
relative to the British pound and Canadian dollar.
6. Global Consumer Products Group (CPG) total net revenues decreased by 2
percent to $94.8 million for the second quarter of fiscal 2009, due primarily to
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KOLEHIYO NG LUNGSOD NG LIPA
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BUSINESS ADMINISTRATION Department
Operations Marketing Financial
lower margin sales of packaged coffee as a result of discounting, as well as
lower volume to the trade.
7. This decrease was driven by restructuring charges of $106.8 million recorded
in the period.
8. The UK and Canadian markets reported negative comparable store sales for
the quarter.
9. International operating income decreased to $6.0 million for the second
quarter of fiscal 2009 versus $17.8 million for the same period a year ago.
10. Starbucks alone purchases only 2 percent of the coffee produced worldwide.
Opportunities
1. According to Howard Schultz, Starbuckss CEO, media exposure concerning
the competition between McDonald and Starbucks helped the firm by creating
unprecedented awareness for the coffee category overall.
2. Company-operated retail revenues increased due to the opening of 236 new
company-operated retail stores in the last 12 months, favorable foreign
currency exchange rates, primarily on the Canadian dollar, and comparable
store sales growth of 2 percent for fiscal 2008.
The favorable foreign currency exchange rate for Starbucks business
resulted to an increase in their sales for the international segment. This is a
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
short-term opportunity for Starbucks since foreign currency exchange
fluctuates from time to time.
3. Iced coffee is clearly a female drink according to many analysts; perhaps it is
low in calorie and high caffeine.
4. Gourmet coffee consumption rose with the drinkers educational level. Those
who finished college bought 49 percent more gourmet coffee on average, and
those with some post graduate education bought 71 percent more.
5. Sixteen percent of the U.S. adult population consumed specialty coffee on a
daily basis, whereas 63 percent indulged occasionally.
6. The growth in popularity of specialty coffees has increased, as only 13
percent and 59 percent of people reported daily and occasional concumption
respectively.
7. Another trend that has surfaced in the past decade has been consumer
requests for organic coffees, and more emphasis was placed by retailers on
the growing environment of the beans.
8. Consumers are becoming more health conscious and are looking for sweets
and snacks that are low in carbohydrates, sugar and calorie.
9. International market has a stronger economy and accordingly, consumers
would be able to pay premium price for specialty or gourmet coffee.
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
10. The SCAA, in its Retail in the USA 2006 report, showed that at the end of
2006, specialty coffee sales had reached $12.27 billion, up from $11.05 billion
in 2005 and $8.3 billion in 2001.
Threats
1. The 2007-2009 global recession negatively affected the specialty coffee
industry.
2. Recent trends have shown that some of the consuming public is concerned
about the nutritional value of such products as those offered by the specialty
coffee sector and have even challenged the correctness of the labeling and
calorie information posted on the products available at retail outlets.
3. Smaller competitors are expanding their markets as well as their product line
offerings.
4. Competitors such as McDonalds and Dunkin Donuts are becoming stronger
in offering specialty coffee along with other complementary products.
5. Dunkin Donuts have recently begun competing aggressively for Starbucks
market share by offering their unique blend of coffees in grocery stores
nationwide.
6. Caribou, smaller, is the closest competitor to Starbucks in terms of product
offerings and concept.
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KOLEHIYO NG LUNGSOD NG LIPA
Marawoy-Dagatan, Lipa City, Batangas 4217




BUSINESS ADMINISTRATION Department
Operations Marketing Financial
7. Peets Coffee and Tea sells its products in grocery stores, home delivery,
office, restaurant and foodservice accounts, through both company-owned
and operated stores in six states in the United States.
8. MCD, now serving specialty coffee, reported staggering total revenue of
$23.5 billion in 2008, generating a net income of $4.3 billion.
9. MCD is now running an ad saying $4.00 coffee is dumb as the firm attacks
Starbucks around the world with its $1.00 (and less) coffee.
10. Firms such as MCD and Dunkin Brands desire to lure all Starbuckss
customers away to cheaper cups of coffee.