US Coffee Industry 1

US Coffee Industry SWOT Analysis

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US Coffee Industry SWOT Analysis

There are approximately 33,000 coffee shops listed in the United States of America and

they range from single Mom-and-Pop operations to big organizations such as that of Starbucks.

US coffee industry has escalated to approximately 16% in growth since 2012, as per a 2017

report on market research by Mintel. The following paper will meticulously focus on an

evaluation on the United States Coffee Industry’s Strengths, Weaknesses, Opportunities and

Threats analysis, usually known as the SWOT analysis. The SWOT analysis commonly helps in

understanding the distinctive features among industries that could lead to the survival or

extinction of the industry. The paper also draws attention to the core capabilities of the industry

as well, focusing on the components that enhance the overall structure of the US coffee industry.

Strengths

There are certain further benefits that come under the umbrella of strengths for the SWOT

analysis, such as that of;

Health Benefits – One of the elements that have hindered individuals from savoring

coffee the past was the conviction that it was here and there destructive. This is not true

anymore. In the recent years, somewhere in the range of 19,000 investigations have been done

trying to comprehend the dangers or advantages of devouring coffee. While numerous

investigations have investigated the association among coffee and certain diseases, for example,

malignant growth and hypertension, no proof has been found to interface coffee to these

wellbeing dangers. It might be all the more amazing that ongoing investigations have

demonstrated that coffee can really be beneficial for you. This is uplifting news for the
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individuals of America and for the Coffee Industry (Trends and Issues of the Coffee Industry of

Ifugao: an Empirical Analysis, 2016).

As indicated by examinations done by researchers at UCLA and the University of

Southern California and covered WebMD on February 19, 2009, the more coffee that you drink

the more uncertain you are to consistently being determined to have a stroke. This isn't the main

examination to demonstrate that a higher admission of coffee can prompt better wellbeing.

Another model is an investigation done by Harvard School of Public Health, and Brigham and

Women's Hospital demonstrated coffee utilization can lessen the dangers of sort 2 Diabetes.

Drinking 6+ cups of espresso daily may decrease the danger of sort 2 diabetes by 54% in men

and 30% in ladies. Coffee builds your resting metabolic rate, which could help keep diabetes

under control.

Benefits for the Coffee Industry – Positive wellbeing dangers are clear drivers of

utilization, so this is uplifting news for coffee stores and coffee store establishments, as buyers

are more joyful to drink more charged refreshments. Questions presented to shoppers about the

medical advantages of drinking coffee and on the off chance that they felt that coffee is useful

for their wellbeing are both up fundamentally since 2005. More individuals presently accept that

there are medical advantages to coffee and that it is useful for their wellbeing.

Just as the strengths to any industry/ business, there are certain weaknesses to it as well;

Weaknesses

Similarly, as with developing any crop, there are eccentric components that will influence

the generation of the harvest and along these lines the expense of coffee for the coffee industry.

The coffee plant is specific about developing conditions. Coffee trees can't endure a climate that
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is too hot or cold, or too wet or dry. Environmental change can assume a gigantic job in the

measure of coffee that is delivered and the amount it costs the retailer. For instance, in 2005

coffee costs rose. This ascent was no doubt a direct result of a collective that was 10% to 20%

lower than that in the record a long time previously. An expansion in the utilization of coffee in

Russia and China additionally had an impact (Smallbusiness.chron.com, 2019).

In light of the ongoing monetary downturn, customers are less inclined to burn through

$5 for some coffee than a year back. Customers are progressively aware of spending and are

additionally ready to search for the best arrangement. To stay fruitful, a coffee house needs to

change its business because of this customer pattern. Starbucks has understood the significance

of this shopper pattern and accordingly has started its first mix markdown by selling coffee and

breakfast nourishments together for $3.90. This is a rebate of about $1.20 trying to bait

purchasers into its coffee shops during the downturn.

Opportunities

The coffee business is all around created and established in the public arena with 54% of

the general American grown-up populace drinking coffee, which is 400 million cups of coffee

devoured each day. The stimulant impact of coffee is one reason that dedicated Americans make

halting into a coffee house some portion of their day. The nearby coffee house likewise gives a

warm, quiet condition in which individuals come to mingle, unwind or even get up to speed with

work. This continued development in the business indicates a strong open door inside the coffee

establishment industry.

The development of the claim to fame coffee market may not be the place it was in the

mid-'90s when the number multiplied like clockwork however that doesn't imply that there is
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certainly not a developing business sector. The development is driven by the interest Americans

have appeared for up-market and premium-evaluated coffees. From 2005-2010, coffee deals are

relied upon to develop by a further 125% to reach $18,839 million of every 2010. This equitable

demonstrates that there is as yet a colossal measure of chance inside the claim to fame coffee

advertises (prezi.com, 2019).

The coffee industry has changed in the course of the most recent couple of years. The

old-style coffee house is never again the main spot to buy great claim to fame coffee. Drive-

through, booths, and trucks are ending up increasingly more well-known as they can offer their

items and administrations to the 'in a hurry' American. The beginning-up expense for booths,

drive-through or truck establishments is considerably less than that of an independent coffee

house. This implies there are more open doors accessible, for a lower venture, to fire up and

maintain a coffee business. Massimo Zanetti Beverage Cafés USA INC offers the chance to

establish a Chock Café Kiosk for the low starting speculation cost of $20,100. In 2004 Seattle's

Best Coffee and Borders Books and Music declared an authorizing consent to open Seattle's Best

Coffee bistros in existing and new Borders Book stores.

Threats

A typical threat in any industry is a monetary downturn, which decreases customers'

utilization. We are as of now in a downturn and this has diminished income in organizations,

paying little respect to the segment. It isn't just the coffee business that has felt the impact of a

more cash tight buyer base. Numerous coffee stores are returning measures to carry clients to the

coffee house. Advancements and exceptional offers are methods for luring clients. Starbucks

shut 7,100 stores across the country for three hours to retrain around 135,000 in-store

representatives and individuals who supervise their stores. This was in an offered to raise deals
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and to better the overall experience of the client. Seattle's Best Coffee LLC has got one free idea

to lure shoppers to the coffee store. A coffee house is presented to increase the expenses of

coffee and dairy items. This is something that cannot be anticipated however may affect the

coffee store industry (Franchisedirect.com, 2019).

The core capabilities of a coffee company should focus on some of the factors as follow;

 The products the company offers – The products offered by any coffee company

should be its most desired and worked through product. As with Starbucks, a coffee

supplier giant in the US makes sure that it delivers one of the best coffee drinking

experiences in the market and hence it is one of the biggest suppliers.

 The quality – One of the best and easiest ways to leave behind the competitors in the

business race, is to deliver outstanding quality of any products a business is offering, and

hence Starbucks is considered to deliver the best coffee across the US and the world.

Therefore it leaves no competition for other competitors in the business race.

 Customer care – The next step that comes in enhancing the business in its approach to

become one of the best in the market, is the customer service it provides. Today the “in a

hurry” American does not have time to waste, people are looking for quick services and

hence a quick business boost is considered to be the customer care a business provides to

reach out to the consumers as fast as they can.

 Competitive research – To stay ahead of the competitors and maintain business stability

in the market, a business should always be updated and know the competition it is dealing

with in the market. In such a regard, Starbucks is considered to be one of the best in the

game adhering to its marketing strategies and analysis of the market competition. This

helps the business to stay intact and know what needs to be changed and adhered in order
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to perform well in the business and deliver to the consumers (Smallbusiness.chron.com,

2019).
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References

Trends and Issues of the Coffee Industry of Ifugao: an Empirical Analysis. (2016). International

Journal of Science and Research (IJSR), 5(6), pp.2518-2521.

Smallbusiness.chron.com. (2019). What Core Competencies Give an Organization Competitive

Advantage? Available at: https://smallbusiness.chron.com/core-competencies-give-organization-

competitive-advantage-34568.html

Franchisedirect.com. (2019). Coffee Franchises - Swot Analysis, Business Report IV | Franchise

Direct.com. Available at:

https://www.franchisedirect.com/coffeefranchises/coffeefranchisesswotanalysisbusinessreportiv/

74/221

prezi.com. (2019). Swot Analysis: Coffee and Tea Industry. Available at:

https://prezi.com/ums6qkn8v5w0/swot-analysis-coffee-and-tea-industry/

Smallbusiness.chron.com. (2019). SWOT Analysis for a Coffee Cafe. Available at:

https://smallbusiness.chron.com/swot-analysis-coffee-cafe-15644.html