STARBUCKS Harvard Case Solution & Analysis

StarBucks Case Study Solution


The issues with Starbucks were that the company had been facing major problems during the time of recession in the year 2009,the company had been suffering in low sales due to the financial crises which impacted on all of the companies. Other than that, the competition in the coffee retailing industry had been significantly increasing.

External Environment (Porter 5 forces)

Bargaining Power of Supplier

The bargaining power of supplier is low in the coffee industry as there are many companies which are providing the coffee beans to the coffee retailing outlets. Majority of the coffee beans are supplied from Vietnam, Columbia, Ethiopia and few other countries. The switching cost for the coffee industry is low.

Bargaining Power of Buyers

The bargaining power of the buyer is high in the coffee industry as the competition is high in the market and the switching cost for the buyers is low. Most of the buyers prefer to buy coffee which has good quality, taste and cleanliness. Other than that there are also many substitute products such as tea, juices and other beverages which provides many products to choose from.

The Threat of New Entry

The threat of new entrants in the coffee industry is moderate in the coffee industry. The reasons are that it requires moderate investment and a supplier which provide good quality coffee beans. Strong branded companies among the coffee retailers make difficulty for the new company to enter the market.

The Threat of Substitute Products

The threat of the substitute products is high in the coffee market as there isa number of products for satisfying a person thirst. Such products are tea, juices, soda and other beverages.

Competitive Rivalry

The competition in the market is high as there are many strong competitors in the market such as Dunkin Donuts, Gloria Jeans and few others. Most of the competitors are fighting towards each through either expanding, diversifying or providing coffee at low prices.

Starbucks Harvard Case Solution & Analysis

Internal Environment (SWOT Analysis)


The strengths of the Starbucks are that the company is one of the world’s largest and strongest known brand worldwide. The company had been providing its services almost in every country. The culture, employees and training program are the other attributes.


The weakness of Starbucks is that it offers its products on high pricing which majorly targets the middle and upper class. Its products are imitable, meaning that its product taste and quality could be copied by its competitors.


There are several opportunities for Starbucks, as for one it could diversify into providing more products and snacks. It could also expand its business to more locations such as Asia, Africa and others. It could also partner or ally itself with other known companies for enhancing its competitive position.


High and increasing competition is one of the major threats for Starbucks as most of these companies are providing its coffee at low prices. Starbucks products could be easily imitated in terms of quality and taste.

Key Industry Success Factors

The key industry success factors of Starbucks are its strong brand name which is known worldwide. The company’s main success lies with the employee’s satisfaction according to the CEO Schultz. Other than these, the company’s strategy of diversification and expansion has caused the company in gaining a competitive edge among its competitors.


Since the company’s sales had been declining due to the recession and high competition in the market, the CEO had decided to focus on developing new product lines and improving its product line extension. These strategies paid off as the company had started to gain high profits.


The company could further expand its business in more regions such as Asia, Africa and the Middle East where there is ample amount of opportunities for improving its business growth. It could also engage into diversifying into more products such as new drinks.


In the year 2016, Starbucks launched a mobile app in which people could easily order the coffee from Starbucks. The company had also launched a loyalty program for attracting more customers and also improving its overall sales (Intelligence, 2016)..............

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