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 - – there is increasing trade war between United States & China, technology disruption, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, 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 -
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Starbucks Activism in the sector have low bargaining power. Brand Activism at Starbucks - A Tall Order? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Starbucks Activism to manage not only supply disruptions but also source products at highly competitive prices.
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.
High switching costs
– The high switching costs that Starbucks Activism has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
Analytics focus
– Starbucks Activism is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Luca Cian, Bidhan Parmar, Jeff Boichuk, Jenny Craddock can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Starbucks Activism has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Brand Activism at Starbucks - A Tall Order? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
Interest costs
– Compare to the competition, Starbucks Activism has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
Products dominated business model
– Even though Starbucks Activism has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Brand Activism at Starbucks - A Tall Order? should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Brand Activism at Starbucks - A Tall Order?, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Starbucks Activism needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Brand Activism at Starbucks - A Tall Order? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Starbucks Activism has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Brand Activism at Starbucks - A Tall Order? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Starbucks Activism 's lucrative customers.
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.
Capital Spending Reduction
– Even during the low interest decade, Starbucks Activism has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Starbucks Activism has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
Buying journey improvements
– Starbucks Activism can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Brand Activism at Starbucks - A Tall Order? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
Building a culture of innovation
– managers at Starbucks Activism can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Creating value in data economy
– The success of analytics program of Starbucks Activism has opened avenues for new revenue streams for the organization in the industry. This can help Starbucks Activism to build a more holistic ecosystem as suggested in the Brand Activism at Starbucks - A Tall Order? case study. Starbucks Activism can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Better consumer reach
– The expansion of the 5G network will help Starbucks Activism to increase its market reach. Starbucks Activism will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Starbucks Activism in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Starbucks Activism has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Brand Activism at Starbucks - A Tall Order? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Starbucks Activism to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Starbucks Activism.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Starbucks Activism in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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? .
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.
Consumer confidence and its impact on Starbucks Activism demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Starbucks Activism will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Starbucks Activism high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Starbucks Activism can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
