Building block - Assignment Example

A SWOT analysis is composed of four sections: strengths, weaknesses, opportunities, and threats. Starbucks Café is the largest coffeehouse in the world. One of the strengths of the company is its corporate image and brand value. The company has done an excellent job of marketing its brand worldwide. A second strength of Starbucks Café is its superb financial performance. In fiscal year 2011 Starbucks Café generated revenues of $11.7 billion and net income of $1.25 billion (Starbucks, 2011).

A third strength of the company is its low infrastructure cost to set up a store. A weakness of Starbucks Café is that its product is a luxury item that performs poorly during bad economic times. Another weakness of Starbucks Café is high raw material costs. Starbuck Café uses only fair trade coffee at its stores which is more than twice as expensive as regular coffee. Starbucks Café is a company that has expanded its operations oversees. The company has further opportunities for expansion into foreign markets.

The firm must expand internationally because the U.S market has become saturated. Another opportunity for Starbucks Café is the potential to grow its sales in the retail marketplace by selling unprepared pounds of Starbucks coffee at supermarkets and other establishments. A threat that Starbucks Café must be aware of is substitute products. In terms of competition in the coffee marketplace a major threat to the company is the continued expansion of McCafé. McDonald’s has over 34,000 establishments worldwide and its McCafé operation sells quality coffee at lower prices than Starbucks Café.

ReferencesStarbucks.com (2011). FY11 Annual Report. Retrieved January 11, 2013 from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome