Starbucks Swot Analysis

SWOT Analysis

Strengths

Starbuck's is an organization that is able to bring several strengths to the Brazilian marketplace. Starbucks mostly purchases premium green coffee, certified as Fair Trade Coffee. The Fair Trade Coffee Agreement ensures local farmers receive a guaranteed price for their harvest above the prevailing market price, thus helping to improve their economic stability. Commitment to Origins is Starbuck's strong commitment to coffee producers, their families, communities, and the natural environment to help promote a sustainable social, ecological, and economic model for the production and trade of coffee (Starbucks, 2003). This precedence setting commitment sends a strong message to the world economy that Starbucks is committed to preserving the best interest of farmers, the economy, and the environment.

According to Starbucks (2003), with nearly 900 coffeehouses in 22 markets outside North America, it is clear that Starbucks passion transcends language and culture. Expertise and experience in entering new markets is another strength that Starbucks brings to the table. Starbucks further magnifies this ongoing business practice by its dedication in supporting communities around the world where Starbucks lives and works, as well as in the origin countries where Starbucks coffees are produced.

Weaknesses

As with any new idea, one must consider both the obvious and the subtle areas of marketing vulnerability. One of the most obvious weaknesses for Starbucks market in Brazil would be that they do not exist. It is the South and Central American countries that provide Starbucks with coffee beans along with all the other specialty coffee companies in the United States. It is understandable that these countries are probably not the most likely for coffee companies, of other countries, to invest in their markets. The fact that there is no research from the Specialty Coffee Association of America, or other coffee companies doing business in Brazil can make it very expensive for Starbucks. A tactic to overcome this is to develop roasting and distribution processes in Brazil to avoid importing and exporting associated costs, thereby reducing costs while continuing the product offering of neighboring countries.

Another weakness for Starbucks is dealing with a country that is very traditional. Researching a countries culture is one of the most important factors before "starting up shop." What is the success rate of any other American beverage product in that country? Like many other South American countries, new products are foreign as well as expensive and Brazilians may not find themselves susceptible to change, or opt to purchase specialty coffees. Extensive and appropriate research that determines the appropriate Brazilian niche can combat this weakness.

Opportunities

It is clear that Starbuck's has been successful in appealing to all five senses of its customers - through the enticing aroma of the beans, the rich taste of the coffee, the product displays and attractive artwork adorning the walls, the contemporary music playing in the background, and even the cozy, clean feel of the tables and chairs. Though the startling success is evident, every company has weaknesses when entering a new market. According to its Annual Report (2002), Starbucks expanded its international presence by opening 294 new international licensed