Starbucks Starbucks Strategic Management: Strength and Weaknesses

Introduction

Starbucks is a name that is so readily recognizable that it almost does not need any introduction. Within the US and outside, they have become the best known and dominating brand in the field of retailing coffee and related products. It still continues to increase its profit and improve the quality and services further. It is obvious that there must be certain strength factors that have taken the company to this unquestionable position. This paper will mention some of the strengths and competitive advantages the company possesses (Malhotra, 2009).

Some of the Strengths of Starbucks

1. The first and foremost strength of the company is the image and brand name of Starbucks. By only the mention of the name, the customer is able to understand the standard they are going to get from the company.
2. The next point of strength is the uncompromised quality of the coffee beans that are used to brew coffee and other products. The mission statement itself is proof of the company’s intention to keep the quality uncompromised.
3. The global presence of the company and that too in locations which are highly visible gives a cutting edge to the company (Conklin, 2006).
4. Though the company has a low employee turnover, it keeps a vigil on employee satisfaction which is necessary for the success of a company.
5. Another strong point of the company is the value that they put on their customers. Quality product and service all are components of satisfying customers.
6. A definitely appreciable point of the company is the Research and Development department of the company with the help of which the company is able to provide the customers with a great choice of products within very less period of time between two introductions (Enz 2009).

Competitive advantages

Now let us see what are competitive advantages this company.

1. The company believes in opening newer stores with new innovative features that give an advantage to it over the other companies. The concept of “Drive – Thru” is one of such new innovative ideas (Conklin, 2006).
2. The advantage of having satisfied employees has helped the company a lot. The work environment suitable to employees in turn gives a better result in terms of efficiency. The company provides for competitive and compensation packages which are available to part time employees too.
3. The satisfied customers are another treasure for Starbucks. Good ambience, excellent quality of product and services along with the unchallenged brand image bring back customers to the stores over and over again (Malhotra, 2009).

Weaknesses of Starbucks

A company might have all the strengths and competitive advantages which help it to grow and sustain the growth for a long time. But there are certain weaknesses in every company that indicate the scope of further improvement. Starbucks also have certain weaknesses that can be worked on to improve the profitability.

1. The products of Starbucks are expensive for a large section of people.
2. The company tends to depend too much on the domestic stores.
3. The company faces fluctuations in the sale of coffee and related products according to the seasonal demands (Conklin, 2006).
4. Some international outlets are incapable of handling the financial issues properly.
5. The Government rules and regulations sometimes come in the way of profitability.
6. Starbucks has suffered a negative image in Ecuador after having an unpleasant relation with coffee growers.
7. A com plain of lack of diverse music collection is also there against the company.
8. The company depends too much on beverage innovations (Malhotra, 2009).

The above are the weaknesses that Starbucks need to overcome. New issues keep on coming from outside everyday and are solved to run the business smoothly. So to handle them efficiently the already existing internal weaknesses have to be corrected.

Conclusion

The study has covered strengths, weaknesses, threats and opportunities that lie in front of Starbucks. Now it is their turn to bank upon the strengths to overcome weaknesses and threats so that they are able to realize their vision and achieve their mission.

References

Conklin, D. (2006). Cases in the environment of business: international perspectives. New York: SAGE.

Enz, A. (2009). Hospitality Strategic Management: Concepts and Cases. London: John Wiley and Sons.

Malhotra, N. (2009). Marketing Research: An Applied Orientation. London: Pearson Education.