2 pages
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994 words
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Starbucks Financial Analysis

October 6, 2016
When corporations ask the big questions like “What should we do” or “What’s next”; all financial
executives will answer; S.W.O.T which is an acronym for strengths, weaknesses, opportunities and
Starbucks, an international co&ee mecca operates under a B2C commerce in over 24,000
locations. It exemplifies strength through its world brand recognition focusing on their loyalty program,
employee & consumer relationships, and diverse product o&erings in prime location stores and
emphasizing social responsibility. Weaknesses include higher price margins, oversaturation in major
cities and high-price expansion overseas. Partnerships create opportunities. Starbucks is able to
capitalize on increased licensing relationships to further sales in retail and grocery stores. Selling a
quality product in various channels increase target and potential consumers.
Another opportunity highlights the “Starbucks experience” in emerging middle to upper class
economies in countries like China, India and Brazil. Intertwining cultural backgrounds with advanced
technology introduce a newer opportunity to international stores. McDonald’s and Dunkin’ Doughnuts
impose a severe threat to Starbucks. The nation’s specialty co&ee chain leader is susceptible to
competiti?on from other international brands that include la5és, frappuccinos and assorted 7avor bean
roasts to their menu at lower prices. Market recessions directly impact money spent on luxuries.
“Depending on the market, customers will experience increases of 10 to 20 cents on select sizes of
brewed co&ee, and 10 to 30 cents on espresso beverages and tea la5es” (Starbucks, 2016). The average
American spends over 1000.00 dollars on co&ee. A price in7ux on co&ee bean production threaten
Starbucks customer consumption.