SWOT ANALYSIS
Starbucks, Dunkin' Donuts, & McDonald's
Starbucks – SWOT (Line, 2022, p. 4)
As previously discussed, Starbucks is a leader in innovation and continues to change how people view what coffee and companies can be. Starbucks continues to push the envelope with new ingredients and different takes on components already in use. They do that by taking advice from baristas and customers to see what they drink.
Schultz invests in his employees from top to bottom, the hourly barista, and the farms and farmers that grow Starbucks' beans.
Rana Foroohar discusses Schultz's want to understand his employees in their article Howard Schultz Isn't Afraid of His Feelings. Or Anybody Else's for That Matter. Foroohar states that Schultz found it crucial to hold meetings for baristas and management to come and speak openly about their experience with racism, as more than 40% of the company's baristas are minorities in the United States (Foroohar, 2015, p. 20). Through Starbucks's success, Schultz has created a company with tremendous Corporate Social Responsibility and has balanced continued financial success and job satisfaction (Lemus et al., 2015, p. 11).
Starbucks has also been very active in sustainability; whether that's by pure goodness and concern for the planet is up for debate as climate change directly affects Starbucks' bottom line. Nevertheless, the company has started implementing sustainable strategies, as Jim Johnson shows in the article Starbucks, Pesi Address Single-Use Plastics, Sustainability. In the article, Johnson reached out to Starbucks, which declined an interview but did send email correspondents through a spokesperson (Johnson, 2022, p. 1). This spokesperson stated, "Our [Starbucks] goal, by 2025, is to create a cultural movement towards reusables by giving customers easy access to a personal or Starbucks-provided reusable to-go cup for every visit" (Johnson, 2022, p. 1). Implementing this program would significantly change the average consumer's behavior.
Dunkin' Donuts
Dunkin' Donuts -SWOT
(Brizek, 2018, p. 4)
Unlike McDonald's, Dunkin' Donuts started in the coffee business. Dunkin' Donuts, unlike Starbucks, prides itself on being the American style of coffee (Contois, 2013, p. 2). Schultz took a trip to Italy and found "coffeehouse culture," a casual cafe setting experience where baristas and customers chatted and focused on espresso drinks (Seaford et al., 2012, p. 39). On the other hand, Dunkin' Donuts positions itself as an American coffee shop because it started serving factory workers during World War Two and progressed to its current company.
Don't let the name confuse you; in Emily Contois's article Dunkin' Donuts Origin Story: A Meaningful Beginning, she quotes Hoy, "The chain does 63%of its business in coffee" (Contois, 2013, p. 4). These coffee houses started filling two different roles in the market; therefore, the experiences in Starbucks and Dunkin' Donuts are very different. Lilah Butler covers this in their article Coffee's Dark Secrets: Linguistic Variation in Starbucks and Dunkin' Donuts, looking at the various language, jargon, and sentences used in both locations. Butler set out to prove that Starbucks has specified jargon to make the classists distinguish between themselves and other coffee shops, like Dunkin' Donuts (Butler, 2017, p. 2). This distinction is slight but makes both coffee shops important for different personalities.
McDonald's
McDonald's – SWOT
(Line, 2022, p. 4)
McDonald's is a big name in the fast-food industry internationally known for its fast service and cheaply priced food. McDonald's had a relatively quiet start in 1940, but by 1958 sold its millionth hamburger, and by 1967 had opened stores internationally (Brizek, 2018, p. 3). By the time the first Starbucks opened in 1971, McDonald's had been operating for thirty-one years and been working internationally for four years. That gives McDonald's a big leg up in the food industry, already being seen as a trusted source of food and quality service. But that also means McDonald's has to be updated on the trends, not seen as washed up and old.
McDonald's started producing coffee late, it introduced McCafé coffees in 2009. It took another step into Starbucks' business model in 2010 by offering free Wi-Fi in over 11,000 of its restaurants (Brizek, 2018, p. 3). One of McDonald's strengths is adaptability; a company doesn't last for as long as McDonald's has without going through significant changes and favoring flexibility amongst its leaders (Brizek, 2018, p. 3). So, when McDonald's saw the need for technology in its stores and its business strategies, the directors didn't shy away.
In Hollis Johnson's Business Insider report, the NPD Group collected data stating that mobile orders increased by 50% in 2017 (Johnson, 2022, p. 2). To stay relevant, McDonald's introduced a mobile ordering app in 2015, similar to Starbucks, self-order kiosks, and partnering with Uber Eats for the customer's convenience. With customers placing orders via in-store technology and their mobile phones, cashiers now have more time to focus on the customer, such as bringing the order you put on the kiosk to your table (Akcam, 2020, p. 8). This mobile ordering app and self-ordering kiosks are great strengths but could lead to weaknesses if not managed correctly.
Conclusion
Starbucks is well-positioned to continue its success but should not underestimate its big competition as technology and innovations open new opportunities for these businesses. And, though smaller cafes are less of a threat, Starbucks cannot forget they started as a small cafe and came to what it is today, and that can happen to any other cafe out there.
Starbucks has many competitors because starting a coffee shop does not have a high startup cost compared to other industries. So, there are thousands of cafes looking to have the same success as Starbucks. However, two of the companies directly competing with Starbucks at this current time are Dunkin' Donuts and McDonald's. Both of these companies were not taken seriously by Starbucks at the start because they served a lower-income market than Starbucks (Seaford et al., 2012, p. 46). This ideal caused both of them to make their way into Starbucks' customer base, and now they're here to stay.