Brand Activism at Starbucks - A Tall Order? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Brand Activism at Starbucks - A Tall Order?
In April 2017, Kevin Johnson took over the reigns as CEO of Starbucks, the iconic coffee giant. He faced a number of key decisions to keep the global retail giant competitive, but one in particular loomed large. Over the last few years, Johnson's predecessor, Howard Schultz, had increasingly used Starbucks as a progressive platform in an attempt to influence the world around its stores, whether he was aiming to smooth out race relations in the United States or support marriage equality. (Schultz was so vocal about these issues, in fact, that many people speculated he harbored secret political ambitions for his post-Starbucks career.) The case examines Schultz's memorable 2015 Race Together campaign and invites students to debate whether Johnson's work should be focused on (1) similar attempts to align Starbucks with progressive ideals and social causes, or (2) Starbucks' profitability and shareholder value alone. Were there certain times or circumstances where it was appropriate to engage in brand activism, and what impact might these initiatives have on brand integrity and the bottom line? In addition to inviting students to analyze the financial, branding, and employee- and customer-relations implications of social activism at Starbucks, the case also allows them to develop a framework for when and how brand activism might be appropriate in the future.
Authors :: Luca Cian, Bidhan Parmar, Jeff Boichuk, Jenny Craddock
Swot Analysis of "Brand Activism at Starbucks - A Tall Order?" written by Luca Cian, Bidhan Parmar, Jeff Boichuk, Jenny Craddock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Starbucks Activism facing as an external strategic factors. Some of the topics covered in Brand Activism at Starbucks - A Tall Order? case study are - Strategic Management Strategies, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Brand Activism at Starbucks - A Tall Order? casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
increasing commodity prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Brand Activism at Starbucks - A Tall Order?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Brand Activism at Starbucks - A Tall Order? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Starbucks Activism, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Starbucks Activism operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Brand Activism at Starbucks - A Tall Order? can be done for the following purposes –
1. Strategic planning using facts provided in Brand Activism at Starbucks - A Tall Order? case study
2. Improving business portfolio management of Starbucks Activism
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Starbucks Activism
Strengths Brand Activism at Starbucks - A Tall Order? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Starbucks Activism in Brand Activism at Starbucks - A Tall Order? Harvard Business Review case study are -
Ability to recruit top talent
– Starbucks Activism is one of the leading recruiters in the industry. Managers in the Brand Activism at Starbucks - A Tall Order? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Sales & Marketing field
– Starbucks Activism is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Starbucks Activism in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Starbucks Activism is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Starbucks Activism
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Starbucks Activism does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Starbucks Activism has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Brand Activism at Starbucks - A Tall Order? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Starbucks Activism is present in almost all the verticals within the industry. This has provided firm in Brand Activism at Starbucks - A Tall Order? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Starbucks Activism has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Starbucks Activism to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Starbucks Activism has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Brand Activism at Starbucks - A Tall Order? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Starbucks Activism digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Starbucks Activism has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Starbucks Activism is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Starbucks Activism is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Brand Activism at Starbucks - A Tall Order? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Starbucks Activism in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Starbucks Activism are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Brand Activism at Starbucks - A Tall Order? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Brand Activism at Starbucks - A Tall Order? are -
Lack of clear differentiation of Starbucks Activism products
– To increase the profitability and margins on the products, Starbucks Activism needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Brand Activism at Starbucks - A Tall Order?, it seems that the employees of Starbucks Activism don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Brand Activism at Starbucks - A Tall Order? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Brand Activism at Starbucks - A Tall Order? can leverage the sales team experience to cultivate customer relationships as Starbucks Activism is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Luca Cian, Bidhan Parmar, Jeff Boichuk, Jenny Craddock suggests that, Starbucks Activism is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Starbucks Activism supply chain. Even after few cautionary changes mentioned in the HBR case study - Brand Activism at Starbucks - A Tall Order?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Starbucks Activism vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Starbucks Activism, firm in the HBR case study Brand Activism at Starbucks - A Tall Order? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Starbucks Activism is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Starbucks Activism needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Starbucks Activism to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Brand Activism at Starbucks - A Tall Order?, in the dynamic environment Starbucks Activism has struggled to respond to the nimble upstart competition. Starbucks Activism has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Starbucks Activism has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Starbucks Activism even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Brand Activism at Starbucks - A Tall Order? HBR case study mentions - Starbucks Activism takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Starbucks Activism has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Brand Activism at Starbucks - A Tall Order? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Brand Activism at Starbucks - A Tall Order? are -
Leveraging digital technologies
– Starbucks Activism can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Starbucks Activism has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Starbucks Activism can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Brand Activism at Starbucks - A Tall Order?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Starbucks Activism in the consumer business. Now Starbucks Activism can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Starbucks Activism can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Starbucks Activism can use these opportunities to build new business models that can help the communities that Starbucks Activism operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Starbucks Activism to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Starbucks Activism to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Starbucks Activism can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Starbucks Activism can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Starbucks Activism can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Starbucks Activism can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Starbucks Activism can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Starbucks Activism to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Starbucks Activism to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Brand Activism at Starbucks - A Tall Order? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Brand Activism at Starbucks - A Tall Order? are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Starbucks Activism can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Starbucks Activism with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Starbucks Activism
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Starbucks Activism.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Starbucks Activism business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Starbucks Activism needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Starbucks Activism needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Starbucks Activism can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Brand Activism at Starbucks - A Tall Order? .
Environmental challenges
– Starbucks Activism needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Starbucks Activism can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Starbucks Activism is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Starbucks Activism in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Brand Activism at Starbucks - A Tall Order?, Starbucks Activism may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology acceleration in Forth Industrial Revolution
– Starbucks Activism has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Starbucks Activism needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Brand Activism at Starbucks - A Tall Order? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Brand Activism at Starbucks - A Tall Order? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Brand Activism at Starbucks - A Tall Order? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Brand Activism at Starbucks - A Tall Order? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Brand Activism at Starbucks - A Tall Order? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Starbucks Activism needs to make to build a sustainable competitive advantage.