Marketing Strategy and SWOT Analysis of Starbucks

As most of you know, Starbucks is the largest coffeehouse chain in the world. Headquartered in Seattle, Washington, today (as of 2020) it has 30,000 locations in around 77 countries. Their huge menu offers a big variety of coffees, teas, snacks, fresh juices, sweets, etc. As of 2019, Starbucks’ annual income was approximately 26.51$ billion and they had nearly 346,000 employees all around the world. So what are the reasons behind this company’s enormous success? To answer some percentage of this question, in this blog post, I am going to discuss some marketing strategies that Starbucks uses and do a SWOT analysis.

For the beginning I would like to speak about the Mission and Vision statements of Starbucks.

Mission Statement:

Starbucks’ Mission statement is “To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.” This statement expresses the company’s approach of trying to create a quality and positive experience for the customers by improving its services, building relationships, and maximizing product choices. 

Vision Statement:

Starbuck’s Vision statement is “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” This statement highlights the importance that Starbucks gives to staying at the top which should be achieved by increasing their efforts and not betraying their principles.  

Now, it’s time to get started with Starbuck’s marketing strategies and I want to start by discussing one of the main methods that they use to position the brand.

Here I want to start by discussing Starbuck’s famous logo. 

Throughout the years Starbucks managed to improve its logo’s design and reach it to a level where it would be unique and very eye-catching. Today it’s one of the most recognized logos in the world and you may agree that very often when you see it in the street, you may think of hanging out there and have a coffee. You may also agree with the fact, that its logo has a big contribution to the company’s worldwide success. 

So what’s special about this logo?

A circular shaped logo, with green background and white image of a mysterious woman in it that is hard not to give a notice every time you pass by it. Many people are interested who is the mysterious woman or what does it symbolize? Well, some of the popular sources state that she is 16th-century Norse woodcut of a twin-tailed mermaid.

The logo, the green color, and the several debates around it leave us with only one direction. Starbucks belongs to the Explorer Brand archetype.

So, what do we know about the Explorer Brand archetype?

Desire: An independence in the process of figuring out about your identity by exploring the world.

 Aim: Experiencing a better life filled with more accomplishments, authenticity.

 Strategy: Travelling and experiencing new things, which helps them escape from entrapment, monotony, and boredom. 

Here are the messaging levels of the Explorer. 

• Level One: Being dissatisfied, estranged, stressed or bored.
• Level Two: Taking a road trip and exploring the world.
• Level Three: Searching for personal individuality and becoming fulfilled.
• Level Four: Achieving and expressing uniqueness and individuality.

The Explorer Archetype is a promising identity for your brand if:

1. the product supports people in expressing self-individuality.
2. the product can be bought and consumed “on the go”.
3. the brand is searching for ways to differentiate itself from conformist brands.
4. the products belong to Explorer culture.

Brand Archetypes. Why we need them in practice?

All of us know that many companies have problems in presenting their key values and attitudes. Sometimes our messaging leads to misunderstanding or it does not represent what we aimed to say in reality. Here of course the importance of the brand archetypes is very crucial. How to create a good company culture? 

What are its values? Here are some questions that need to be answered properly. “8 steps to a complete archetypal branding” eBook tells us a lot.  We have written a book that goes deeper in these notions and reveals archetypes in specific ways. Just uncover the brand archetypes with “8 steps to a complete archetypal branding” eBook.

Now let’s continue by speaking about SWOT analysis of Starbucks.

Strengths

Strong brand name: It’s not a secret that Starbucks is one of the most famous and strongest brand names in the food and beverage industry. As of 2019, it has a brand value of 11.8$ billion which is more than 2 billion more compared to the value of 2018 (9.52$ billion). Moreover, as mentioned earlier, during the same year, the company had 26.51$ billion income.

Employee relationship: Starbucks is known for its good treatment towards employees and so often it’s included in “Fortune’s Top 100 places to work for”. This makes a healthy working environment, which also boosts the employee’s motivation towards fulfilling the duties and serving customers in a decent way. 

Product portfolio: Almost 30 years after its foundation Starbucks started to acquire companies, which include Tazo Tea in 1999, Seattle Coffee Company in 2003, and Ethos Water in 2005. This, for sure has increased Starbucks’ product portfolio which impacted more success and global presence for the company. 

Weaknesses

Pricing Strategy: The prices of Starbucks products are higher compared to its competitors that offer similar quality products. This in fact, reduces the affordability of its products for some potential customers. 

Adaptation to cultures: Although Starbucks has already entered 77 countries, it hasn’t adapted its product to the local cultures, and operates as a completely American brand. The adaptation may refer to menu, packaging, interior design, etc.

Tax avoidance scandal: Starbucks got a lot of criticism for not paying taxes in the UK during 3 consecutive years during the 2010s. These events had a negative impact on Starbucks’ brand image. 

Dependence on the US market: As of 2018, approximately 70% of Starbucks’ revenue was generated from the US markets. For an international company like Starbucks, 70% is considered a high number as some fluctuations in the US markets or economy may have a huge impact on Starbucks ’ revenues.

Opportunities:

International expansion: As an internationally well-known brand, there are big opportunists for Starbucks to enter and conquer new markets, however, some markets require lower product prices and more attention to cultural adoption.

Alliances: As effective co-branding is always beneficial, Starbucks can increase the number of its alliance companies which will include more suppliers, distributors, famous coffee chains, etc. One of the best co-brandings of Starbucks was the one with Nestle, which resulted in an increase in Starbucks’s annual revenue by $ 7.15 billion. 

Threats

High priced products: As mentioned above, some of Starbucks ’ competitors offer similar quality products at lower prices. So, a slight innovation from its competitors can cause Starbuck’s lose some share,

Moreover, a global event (for example Covid-19), that may have an impact on the incomes of Starbuck’s potential consumers, may also decrease the demand of the products shifting them towards the lower-priced brands.

Competition: Starbucks is in an ongoing competition with big names such as Dunkin Donuts, Burger King, McDonald’s, etc. So, Starbuck’s team should always be full of new and innovative ideas in order not to lose its market position

Lack of Social Responsibility: During recent years Starbucks received a huge criticism regarding not paying taxes, fair trades, and negative environmental impacts. So, there is a risk for potential protests and damages to its brand image.  

After discussing the SWOT analysis, I would like to speak about Starbuck‘s target audience.

To understand one of their major target segments, I am going to discuss the famous “Glen” commercial which I guess most of you have seen it at least once.  

The commercial features Survivor band, who follow a guy named Glen, and sing a modified version of their “Eye of the Tiger” song, while Glen was doing his morning activities.

As you may notice, Glen is an introvert guy, with a quiet attitude, not so enthusiastic who is dependent on his day to day activities routine. He starts his day in a passive mood, with drinking coffee, shaving, and slowly walking towards the bus stop, while having kind of dreamy face expressions during the whole time. 

Apparently, this kind of behavior is typical to people, who belong to the Naysayers segment.

So who are Naysayers?

Lifestyle and Values: 

These people have a simple and practical approach to life. The most important things for them are a calm life, good living conditions, and a secure future. They are not open to changes and innovations as they think that proven methods and ways are the best ones. 

The level of their ambitiousness is low as they don’t care about career development too much. They are insecure, not so confident, and very hesitant in decisions. However, there are some things that they feel they deserve and may work very hard to get it. 

They are attentive towards the family, as they look for predictability and security in durable relationships. The way of their life is routed by the traditional values. As a leader, they are not the best ones as they are not well at handling responsibilities and may prefer to follow the rules and lead of the others.   

New trends don’t attract them, as they think “I am who I am, not what I put on”. They lack intellectual aspirations and interest as they don’t find intellectuality important. Their interest is low even in arts, traveling, and cultural exchange.

Shopping Preferences:

Apparently their lifestyle and values have a big impact on their shopping preferences. They make their decisions based on comfort, not style. Just like in life situations, during shopping they are not interested in trends as they think practical goods are more trustworthy based on their experience.

Brand names don’t have an impact on them as they think that famous if the brand is famous, it doesn’t necessarily mean that its items are better than the ones of an ordinary shop.

They mainly buy new stuff when something has gone wrong and they need to replace it. They are not an instant buyer, as they hesitate a lot before making the purchase decision. This is also connected with the fact that their incomes are mainly low and they spend their money carefully.

Discount attract them a lot as they like to hunt bargains and always tend to get the best deal. Second-hand shops are also possible options for them. Their attitude towards shopping is quantity over quality.

Here are some interesting facts about Naysayers:

1. Home is the main place for their entertainment. They like spending time with their family by cooking and having family dinners. They are not into spending their weekends in pubs and clubs as they don’t feel comfortable in those places. 
2. Social, cultural, and arts events do not interest them either. They like watching and talking about sports, but rarely do exercises and are satisfied with a good daily walk. 
3. They are not regular readers as the time they spend on reading is considerably less than the life stage average and this little time is mainly spent on unimportant information. They may read about cars and learn some small amount of details which is enough for them to dream about it. 
4. They are not active on social websites and mainly use them for chatting with some of their closest friends and scrolling around the news feed to find memes. They like watching TV and sometimes see it as a company when no one is at home. However, they only watch a very limited number of TV channels. 

16 Personalities (why do you need them in your business?)

Naysayers can be considered as insecure people, it is mainly caused by unpleasant memories from their childhood, or a family problem that has complexed them, or they grew up very soft, did not go out on the street, did not fight.

To discover more about the Naysayers you can check out our “16 personalities” e-book where we not only tell about the Naysayers but also 15 other personalities who can potentially be part of you target market.

So, these were some interesting approaches that Starbucks has been using to maintain its strong position in the market. I hope this information provided the answers to the questions you were looking for. For more similar posts you can check out the main page of our website.