Why has Starbucks not penetrated the Finnish market yet?

The reason why Starbucks hasn’t entered the Finnish market is still a mystery to me. By annual consumption of coffee, as of 2008, Finland is the biggest consumer with 12 kg per person. Norway as the second biggest consumer with 9,9kg doesn’t even give the Finns a good run for their money!
An excellent tool to get a deeper understanding of Starbucks is SWOT analysis. In this case the SWOT-analysis focuses on the export policy towards Finland. In order to get a coherent picture I decided to divide the SWOT into internal (SW) and external analysis (OT). The internal analysis focuses on the internal factors that characterize Starbucks; its purpose is to attain insight in the success-increasing and the value-decreasing factors in the organization. The external analysis, on the other hand, focuses on the factors which can have an influence on the success of Starbucks entering Finland.

Strengths

• Starbucks has no hierarchical organizational structure or formal organizational chart. The company believes that its employees are one of the most important assets and in Starbucks’ company language an employee is called a partner.

• Starbucks’ products have an image of high quality. Starbucks itself is worldwide recognized and has a trendy image; it’s considered even popular to visit Starbucks.

• Starbucks’ strong financial position is a proof that they are capable of entering new markets although they already have enormous number of locations worldwide.

• The organization has strong ethical values and an ethical mission statement that 'Starbucks is committed to a role of environmental leadership in all facets of our business.'

• Starbucks’ mission to make its stores a third place for people to go besides work and home comes by offering services like free internet and cozy atmosphere.

• Starbucks is the only coffee chain with their own logistics chains for guaranteeing freshness an quality of coffee

Weaknesses:

• Starbucks’ products have relatively high prices.

• Due to the extension of the product portfolio, the company has got further away from its initial core-concept, and it is sometimes described as the “McDonald’s of coffee”.

• Starbucks is pretty inflexible with their pricing. For example, they have the same price for their products whether you’re in LA or Beijing.

• Their business isn’t as well established internationally as for example McDonalds.

• In general, Starbucks has kept their business plan pretty centralized and they try to keep their branches as untailored as possible in different locations.

Opportunities:

• Finns are, in general, high educated and internationally-minded.

• There is pretty high economic level in Finland.

• Finland has a tremendous coffee culture. Furthermore, Starbucks opportunity is in the coffee shop culture which is still in its infancy

• Finland offers convenient and efficient distribution possibilities: potential consumers of Starbucks are to be found in the large cities which are almost all located in the South.

• Starbucks has good opportunities to improve their market share and get more visibility by further expanding their portfolio of products, such as bottled Frappucinos and other specialty goods, in Finnish grocery stores.                                 

Threats:

• Existing Finnish brands and competitors in the coffee business (even McDonald’s is now offering quality coffee).

• If Starbucks decides to stay only in the airport they won’t get high visibility locations to attract Finnish customers.

• Being a major worldwide corporation Starbucks is subject to many critical opinions from different corners of society: criticism against the “evil” corporate character of Starbucks and Starbucks leaving small coffee store-owners no choice but to give in and close their stores.

• Starbucks may lack knowledge of the Finnish market.

So as you can see Starbucks has some weaknesses as a company and there are some threats when considering entry to the Finnish market. However, these are not insuperable problems and in my next post I will try to convince you how Starbucks can turn these weaknesses and threats into opportunities in the Finnish market.

Sources:

Finnish coffee: preserving a Scandinavian tradition. Retrieved on Feb 3, 2012, http://www.luxner.com/cgi-bin/view_article.cgi?articleID=59Finnish people and lifestyle. Retrieved on Feb 3, 2012:
http://www.squidoo.com/finish-people-and-life-styleHelsinki Times, Finns love affair with coffee continues despite rising prices. Retrieved on Feb 3, 2012: http://www.helsinkitimes.fi/htimes/eat-and-drink/16241-finns-love-affair-with-coffee-continues-despite-rising-prices.htmlShaun Weston, Starbucks premium iced coffee now available in Finland. Retrieved on Feb 3, 2012:
http://www.foodbev.com/news/starbucks-premium-iced-coffee-now-availa

Starbucks, monoculture, and American Imperialism. Retrieved on Feb 3, 2012: http://www.everything2.com/index.pl?node_id=1535254

 Starbucks Website. Business ethichs and compliance. Retrieved on Feb 3, 2012: http://assets.starbucks.com/assets/sobc-english-2011-09-01.pdf

 Starbucks Website. Our Company. Retrieved on Feb 3, 2012:

http://www.starbucks.com/about-us/company-information

 Wikipedia, List of countries by coffee consumption per capita. Retrieved on Feb 3, 2012: http://en.wikipedia.org/wiki/List_of_countries_by_coffee_consumption_per_capita