4. Diversification of services and products: Starbucks’ primary product line is very limited, and should the coffee market they hold advantage in begin to falter or people begin to rethink where they are going to spend their next $4, Starbucks does not have an effective back up plan, or a large and diverse group of other products to attract or retain customers.
Opportunities:
1. The recovered economy leads consumers to feel more secure in making higher cost purchases for luxuries. Starbucks should take advantage of this opportunity with advertising campaigns aimed at drawing frightened consumers back into the process of ordering a Starbucks each morning.
2. Since more consumers are opting to brew coffee in their homes over visiting a coffee shop, Starbucks should focus on expanding its pre-packaged line.
3. Without negatively affecting what they do best – creating an exquisite cup of coffee in an enjoyable atmosphere, Starbucks should begin to focus on diversifying its product line, offering new and inventive products to draw new customers in and keep current customers excited.
4. Starbucks is known for its high-quality coffee, and that quality comes with a price. But it should offer, at least temporarily, discounted rates on various coffees to draw customers in and form habits and patterns that they may continue with even after Starbucks has to gradually raise prices again.
Threats:
1. Competitors who offer quality products at a lower price
2. The economic recession leads consumers to seek cheaper options, or give up higher quality specialty coffee with less expensive options
3. Tough economic times result in customers seeking substitutes for what are considered luxuries, like an expensive cup of specialty coffee. Grocery stores are offering much less expensive options for consumers who choose to brew their coffee at home rather than visit a coffee shop.
4. Several new companies are marketing specialty coffee machines where the consumer can save by brewing their own single serve cups of Joe at home.
5. McDonald’s is threatening to take over Starbucks’ international business as well, though its McCafe’s being opened abroad.