As the new Chief Innovation Officer (CIO) of Starbucks I'm excited to bring new innovated ideas to Starbucks.
Starbucks' main business is a leading speciality coffee roaster, marketer, and retailer around the world in 83 global markets. Americas region and beverages make up the biggest share of revenue. (Farley, 2021) Starbucks is wildly successful, with revenue increase of 23.57% in 2022 vs. 2021. Their net profit margin is 14.45% which is up 265.82%. (Marketline)
Starbuck's SWOT Analysis is as follows:
Starbuck's has three primary strengths that effects strategy, operations, and financials.
Strategic - Building Strong Customer Connect Through Value - Added Service:
Starbucks competes in a highly competitive foodservice retail environment that requires regular delivery of high-quality service in order to maintain existing consumers or attract new ones. Aside from selling its world-famous coffee blends in a range of tastes, the company focuses on giving its in-store consumers a coffee-drinking experience. Starbucks provides free, unrestricted Wi-Fi access at all of its company-owned stores in the United States, Canada, and a few other international markets to encourage customers to spend more time inside the store.
Operational- Operational Newtwork Strengthens strategic poistion:
Starbucks caters to it's store needs efficiently by having a solid operational network. There are two types of Starbucks stores, company - operated and licensed stores.
Financial - High Liquidity Position Stabilize It's Fund Day to Day Operations:
Starbucks is at an advantage with a higher liquidity. This allows us to capture potential opportunites in the market.
In addition to stregnths there always is weaknesses. Starbucks identifies two financial weaknesses.
Decline in revenue affects financial stability and dependence of Americas for majority of revenue.
Starbucks reports dinancial performance decline in the fiscal year 2020. $23,518 million dollars compared to 2019 fiscal year of $26,508.6 million dollars. The decline was attributed to decrease in product and equipment sales. No doubt the global pandemic played a part in the decline.
Areas of opportunity for Starbucks effects strategic, and industry. Investment in stores may enhance geographical presence and customer base, positive outlook for increasing consumer spending in the US and positive outlook for global hot drink market.
Finally, and one of the most important aspects of the SWOT analysis is the threats. Starbucks has identified three threats. Increase in raw material costs, whic affects whole bean arabica coffee directly, competition impacting profit margins, and compliance costs associated with government regulations. Starbucks is subject to regulations of the US Department of Agriculture, the FDA not only in the US but also in Canada.
Now the whole reason I was promoted to Starbuck's CIO is to bring fresh new ideas to the table and boy do I have one!
STAR-CUTERIE!
By expanding Starbucks location to add in a cold, antipasto bar where patrons can select various meats, cheeses, olives, nuts, fruits and breads they can customize a charcuterie board if they are dining in and a charcuterie to go box for those on the run. Set up would be assembly line modled after Subway. You would start on one end and select meats, and cheeses, moving down and selecting fruit, fruit spread, nuts, olives, various sweets and breads. Then once you have completed your box you can pick up your drink at the other end of the bar where there is the standard baristas making your coffee, tea, beverage of choice.
This is a new innovative idea to bring patrons in for lunch or afternoon snack. You order at the front of the store by providing your usual drink order and then a selection of what box you would like. This could be a pick 1 which is 1 meat, cheese, olive or fruit, and 1 type of bread or pick 2 or 3 depending on how big you would like your box.
This idea is innovated and not seen in any fast food or restaurant let a lone a coffee shop like Starbucks. "At retail, charcuterie has seen constant growth since 2017. Pre-packed charcuterie spiked at around an 80% volume increase in Q2 2020." (Uetz, 2021)
There is an untapped potential here that could improve profitability to Starbucks. In a small test market profits could exceed 5 million dollars.
Farley, Alan. “How Starbucks Makes Money.” Investopedia, Dotdash, 28 Jan. 2021, https://www.investopedia.com/articles/markets/021316/how-starbucks-makes-money-sbux.asp.
MarketLine: Starbucks Corp. 17 Nov. 2021, https://advantage-marketline-com.ezproxy.snhu.edu/Company/Summary/starbucks_corporation.
Uetz, Michael. “See Why More Meat Consumers Are Hopping on Board the Charcuterie Trend.” Midan Marketing, Google Partner, 13 May 2021, https://www.midanmarketing.com/see-why-more-meat-consumers-are-hopping-on-board-the-charcuterie-trend/.
Comments
Post a Comment