SWOT for potential coffee business

Before starting a business it is imperative to see the factors which influence its success. The SWOT analysis serves as an important tool to deduce how lucrative a business is and what changes can be made to improve its profitability and future growth.

Conducting a SWOT analysis can help businesses uncover opportunities which are easily exploitable and determine the threats it faces so they become avoidable. These are the externalities of a SWOT analysis. The SWOT analysis also helps a business realise its strengths which it can use to exploit opportunities and its weaknesses which it can come to terms with and change to strengths. 

Sample of an independent coffee store.

Strengths

A Skilled Barista

• The independent coffee industry is booming. 
• Loyal customers
• Highly personalised service
• Skilled service compared to big brands
• Quality coffee 
• Comfortable, character filled environment

Weaknesses

Coffee shop closed due to rising costs

• Customers spend less on each individual purchase.
• High start-up costs
• High rents
• More susceptible to market fluctuations
• Competition with brands that have achieved economies of scale.
• Less capital for marketing and attracting foot fall.

Opportunities

Local drive against big corporations

• Aging population allows for different target groups
• Internet. One of the largest opportunities available to the coffee industry is the advent of the internet which serves as a resource through which new startups can source their raw material and sell to a larger market. 
• Automatic coffee machines and standardised coffee have deskilled and de personalised the labour force of large brands. 

Threats

Three of the largest UK Coffee Chains

• Very stiff competition from big brands.
• The threats faced by some new startups in the coffee industry are the high set up costs.
• Economic irregularity
• Startups survive on average for under two years
• Need a safety net for initial period while forming consumer base
• The opening up of a large brand coffee store in the same neighbourhood