Starbucks: Driving Growth Through New Dining Occasions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Starbucks: Driving Growth Through New Dining Occasions
In 2008, Starbucks was in crisis as a result of undisciplined growth and loss of focus, and its stock declined almost 70%. In August of that year, Howard Schultz, the founder of Starbucks, came out of retirement to take over as the CEO. The company regained its footing by refocusing on its core and driving strong organic growth. By 2014, the stock price had reached $40, an all-time high. To prevent history from repeating itself, Schultz wanted to ensure that Starbucks' growth strategies not only addressed market opportunities, but also were aligned with the company's brand image, assets, and capabilities. Starbucks announced a five-year growth plan in December 2014 with ambitious goals that included nearly doubling its revenues from $16 billion to $30 billion, doubling operating income, and expanding its footprint to more than 30,000 stores globally by 2019. The growth plan consisted of seven specific growth strategies, one of which was the New Occasions strategy. The objective of New Occasions was to drive growth by diversifying Starbucks' revenues beyond breakfast to the lunch, afternoon, and evening dayparts. Starbucks created specific offerings for each daypart, called the Lunch, Sunset, and Evenings programs. The case focuses on evaluating these three occasions-based growth opportunities and identifying the best path forward.
Swot Analysis of "Starbucks: Driving Growth Through New Dining Occasions" written by Mohanbir Sawhney includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Starbucks Occasions facing as an external strategic factors. Some of the topics covered in Starbucks: Driving Growth Through New Dining Occasions case study are - Strategic Management Strategies, Growth strategy, Market research, Product development, Strategic planning and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Starbucks: Driving Growth Through New Dining Occasions casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Starbucks: Driving Growth Through New Dining Occasions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Starbucks: Driving Growth Through New Dining Occasions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Starbucks Occasions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Starbucks Occasions 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 Starbucks: Driving Growth Through New Dining Occasions can be done for the following purposes –
1. Strategic planning using facts provided in Starbucks: Driving Growth Through New Dining Occasions case study
2. Improving business portfolio management of Starbucks Occasions
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 Occasions
Strengths Starbucks: Driving Growth Through New Dining Occasions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Starbucks Occasions in Starbucks: Driving Growth Through New Dining Occasions Harvard Business Review case study are -
Successful track record of launching new products
– Starbucks Occasions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Starbucks Occasions has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Sales & Marketing industry
– Starbucks: Driving Growth Through New Dining Occasions firm has clearly differentiated products in the market place. This has enabled Starbucks Occasions to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Starbucks Occasions to invest into research and development (R&D) and innovation.
Analytics focus
– Starbucks Occasions 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 Mohanbir Sawhney 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.
Training and development
– Starbucks Occasions has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Starbucks: Driving Growth Through New Dining Occasions 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.
Innovation driven organization
– Starbucks Occasions is one of the most innovative firm in sector. Manager in Starbucks: Driving Growth Through New Dining Occasions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Starbucks Occasions
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Starbucks Occasions does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Starbucks Occasions is present in almost all the verticals within the industry. This has provided firm in Starbucks: Driving Growth Through New Dining Occasions 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 switching costs
– The high switching costs that Starbucks Occasions 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.
Superior customer experience
– The customer experience strategy of Starbucks Occasions 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 Occasions 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.
Low bargaining power of suppliers
– Suppliers of Starbucks Occasions in the sector have low bargaining power. Starbucks: Driving Growth Through New Dining Occasions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Starbucks Occasions to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Starbucks Occasions digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Starbucks Occasions 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.
Weaknesses Starbucks: Driving Growth Through New Dining Occasions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Starbucks: Driving Growth Through New Dining Occasions are -
Lack of clear differentiation of Starbucks Occasions products
– To increase the profitability and margins on the products, Starbucks Occasions needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Starbucks: Driving Growth Through New Dining Occasions 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 Starbucks: Driving Growth Through New Dining Occasions can leverage the sales team experience to cultivate customer relationships as Starbucks Occasions is planning to shift buying processes online.
Interest costs
– Compare to the competition, Starbucks Occasions 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 operating costs
– Compare to the competitors, firm in the HBR case study Starbucks: Driving Growth Through New Dining Occasions 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 Occasions 's lucrative customers.
Products dominated business model
– Even though Starbucks Occasions 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 - Starbucks: Driving Growth Through New Dining Occasions should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Starbucks Occasions 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Starbucks Occasions is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Starbucks: Driving Growth Through New Dining Occasions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Starbucks Occasions 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.
Capital Spending Reduction
– Even during the low interest decade, Starbucks Occasions 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.
Low market penetration in new markets
– Outside its home market of Starbucks Occasions, firm in the HBR case study Starbucks: Driving Growth Through New Dining Occasions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Starbucks: Driving Growth Through New Dining Occasions HBR case study mentions - Starbucks Occasions 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.
Opportunities Starbucks: Driving Growth Through New Dining Occasions | 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 Starbucks: Driving Growth Through New Dining Occasions are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Starbucks Occasions 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.
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 Occasions 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 Occasions 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 Occasions 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.
Loyalty marketing
– Starbucks Occasions 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.
Manufacturing automation
– Starbucks Occasions 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.
Using analytics as competitive advantage
– Starbucks Occasions 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 Starbucks: Driving Growth Through New Dining Occasions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Starbucks Occasions to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Starbucks Occasions can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Starbucks Occasions 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.
Buying journey improvements
– Starbucks Occasions can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Starbucks: Driving Growth Through New Dining Occasions 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Starbucks Occasions 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.
Learning at scale
– Online learning technologies has now opened space for Starbucks Occasions 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.
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 Occasions in the consumer business. Now Starbucks Occasions can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Starbucks Occasions is facing challenges because of the dominance of functional experts in the organization. Starbucks: Driving Growth Through New Dining Occasions case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Starbucks: Driving Growth Through New Dining Occasions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Starbucks: Driving Growth Through New Dining Occasions are -
Technology acceleration in Forth Industrial Revolution
– Starbucks Occasions has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Starbucks Occasions 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Starbucks Occasions with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Occasions business can come under increasing regulations regarding data privacy, data security, etc.
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 Occasions 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.
Increasing wage structure of Starbucks Occasions
– 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 Occasions.
Environmental challenges
– Starbucks Occasions 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 Occasions can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Starbucks Occasions 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Starbucks Occasions 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 Starbucks: Driving Growth Through New Dining Occasions .
High dependence on third party suppliers
– Starbucks Occasions 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.
Shortening product life cycle
– it is one of the major threat that Starbucks Occasions is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Occasions needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Starbucks: Driving Growth Through New Dining Occasions, Starbucks Occasions 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Starbucks Occasions 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 Starbucks: Driving Growth Through New Dining Occasions 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 Starbucks: Driving Growth Through New Dining Occasions 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 Starbucks: Driving Growth Through New Dining Occasions 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 Starbucks: Driving Growth Through New Dining Occasions 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 Starbucks: Driving Growth Through New Dining Occasions 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 Occasions needs to make to build a sustainable competitive advantage.
