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Starbucks S.W.O.T Analysis

Free «Starbucks S.W.O.T Analysis» Essay Sample

The greatest weakness facing Starbucks Company is the pricing of its products. Although the company offers high quality coffee in the market, it has been losing numerous customers to its competitors because of high pricing. Besides, the company has been witnessing a slow growth in profits as a result of dwindling demand of its products and loss of customers. Since Starbucks is competing with gas stations, fast food restaurants, and other coffee houses such as Tim Horton’s, pricing of its coffee is extremely sensitive.

In order to deal with this weakness, the company can engage in optimal pricing. This means the company should set its prices in comparison with its competitors, but still maintain the high quality of coffee. However, the company should be cautious not to set its prices too low to avoid eliciting doubt from customers about the quality of its products (Fine, 2009). The company can also deal with the weakness of pricing, by offering other benefits such as introducing loyalty programs for clients can earn points for every purchase of products. In spite of the price, customers will be enticed to buy the coffee and earn points, which can be redeemed at any outlet and used to purchase the product.

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The greatest threat facing Starbucks is availability of coffee makers such as Keurig coffee maker. The coffee maker machines are now available and affordable hence customers prefer to purchase them and make their own coffee at home. For instance, the prices of cappuccino makers are coming down in price, and people prefer to prepare their own cappuccino or Frappuccino. This has significantly reduced the foot traffic to Starbucks outlets, hence significantly affecting its profits (Fine, 2009).

In order to deal with the threat facing Starbucks, the company should make their outlets more appealing to attract customers. For instance, the outlets can provide free Wi-Fi services, discounts on repeat customers, and even free delivery services. This will ensure that customers flock their outlets to enjoy these services instead of drinking coffee at home.

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