Categories: SWOT Analysis

TOWS Analysis (Matrix) of Starbucks

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<h3>Strengths<&sol;h3>&NewLine;<p align&equals;"justify">• Starbucks has a strong brand presence&comma; which is leading as a global organization with more than 16&comma;000 retail stores in 48 countries across the entire world&period;<&sol;p>&NewLine;<p align&equals;"justify">• Best known for its high quality and services&period;<&sol;p>&NewLine;<p align&equals;"justify">• Strong brand loyalty&period;<&sol;p>&NewLine;<p align&equals;"justify">• It provides an atmosphere of sophistication&comma; calmness and style that represents its own functional and emotional benefits to consumers&period;<&sol;p>&NewLine;<p align&equals;"justify">• Has the Wi-Fi facility in all of its retail stores&period;<&sol;p>&NewLine;<p align&equals;"justify">• Have fewer competitions in the market&period;<&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<p align&equals;"justify">• Starbucks treats employees as partners who hold the urge to provide message to its customers which is significant to the product line&period;<&sol;p>&NewLine;<p align&equals;"justify">• Starbucks has the competitive advantage of providing innovative products more quickly in the all of the same retail stores&period; <&sol;p>&NewLine;<h3>Weaknesses<&sol;h3>&NewLine;<p align&equals;"justify">• Starbucks generates 85&percnt; of revenues from US&comma; its domestic market&period; Being known as an international brand&comma; the organization needs to obtain some revenues from outside the US market&period;<&sol;p>&NewLine;<p align&equals;"justify">• Starbucks relies more greatly on creating innovation in beverages&comma; at the time of economy slowdown it will be risky for the company as to how long they will be able to sustain&period;<&sol;p>&NewLine;<p align&equals;"justify">• Starbucks faces some difficulties internationally&comma; as one of its market expansion failed miserably like Japan so this affects the international growth of the company&period;<&sol;p>&NewLine;<h3>Opportunities<&sol;h3>&NewLine;<p align&equals;"justify">• Starbucks has a strong market share of about 40&percnt;&comma; this is beneficial for the company to expand ahead globally specifically as a coffee market&period;<&sol;p>&NewLine;<p align&equals;"justify">• Starbucks has gone for market extension in beverage category by introducing Starbucks coffee liquor drink linked with Jim Beams brand&period;<&sol;p>&NewLine;<p align&equals;"justify">• Currently&comma; Starbucks is operating 15&comma;000 international and expects to expand further in countries like Russia&comma; China which will further increase its revenue growth&period; <&sol;p>&NewLine;<p align&equals;"justify">• Technological advancement can help Starbucks improve its services&period; <&sol;p>&NewLine;<p align&equals;"justify">Threats<&sol;p>&NewLine;<p align&equals;"justify">• The political&comma; economic and weather conditions in some countries outside the domestic market like India can adversely affect the business&period;<&sol;p>&NewLine;<p align&equals;"justify">• The rise in dairy prices can be a threat to Starbucks as milk and dairy products usually get 3&percnt; or 5&percnt; of sales and its consistently increase in prices could affect the company’s operations&period;<&sol;p>&NewLine;<p align&equals;"justify">• Starbucks must be careful of the emerging competition especially in the domestic market&comma; any major competitor can hit the market&comma; therefore Starbucks must be competitive on all levels to retain its position as the world’s leading coffee retailer&period;<&sol;p>&NewLine;<h3>SO Strategies &lpar;Strengths&sol;Opportunities &rpar;<&sol;h3>&NewLine;<p align&equals;"justify">1- The major strength of Starbucks is its global presence and its strong customer loyalty which helps to increase its market share and growth in the coffee market&period; &lpar;S1&comma;O1&rpar; &lpar;S3&comma;O1&rpar;<&sol;p>&NewLine;<p align&equals;"justify">2- By constantly introducing new innovative products in each store&comma; Starbucks can continue to increase its revenue by expanding in other countries as well&period; &lpar;S8&comma;O3&rpar;&lbrack;sky&rsqb;<&sol;p>&NewLine;<p align&equals;"justify">3- Starbucks is well known for its quality and fast services throughout the world&comma; in order to upgrade its services according to customer’s requirement is to come up with more technological advancements&period; &lpar;S2&comma;O4&rpar; <&sol;p>&NewLine;<h3>ST Strategies &lpar;Strengths&sol;Threats&rpar;<&sol;h3>&NewLine;<p align&equals;"justify">1- One of the major threats that Starbucks could face is against its competitors&period; For this purpose&comma; Starbucks should innovate or diversify its products more often to retain its position in the market&period; Frappucino light blended coffee is one of its examples&period; &lpar;S8&comma;T3&rpar;<&sol;p>&NewLine;<p align&equals;"justify">2- Due to economic&sol;political instability in some countries that affect the business operations&period; However with its strong global image&comma; Starbucks can shift its operation elsewhere where it seems to have more potential growth&period; Another way is to change their market strategy by reducing their prices to penetrate in the foreign market&period; &lpar;S3&comma; T1&rpar;&period; <&sol;p>&NewLine;<h3>WO Strategies &lpar;Weaknesses&sol;Opportunities&rpar;<&sol;h3>&NewLine;<p align&equals;"justify">1- As Starbucks has large market share of about 85&percnt; in the US market&comma; they must take advantage of their market expansion to increase its market share outside its domestic market&period; &lpar;W1&comma;O1&rpar; <&sol;p>&NewLine;<p align&equals;"justify">2- If Starbucks face difficulties to operate internationally&comma; they must take advantage of their products and adapt them according to the consumer’s demand and environment through product diversification or market extension strategy&period; &lpar;W3&comma;O2&rpar;<&sol;p>&NewLine;<h3> WT Strategies Weaknesses&sol;Threats<&sol;h3>&NewLine;<p align&equals;"justify">1- Starbucks when faced with political&sol;economic instability outside the domestic market &lpar;US&rpar; needs to extend its product line in beverages&period; &lpar;W1&comma;T1&rpar; &lpar;W2&comma; T1&rpar;&period;<&sol;p>&NewLine;<p align&equals;"justify">2- To avoid this threat such as rise in the cost of dairy products is to diversify its products that do not include any dairy items&period; &lpar;W2&comma;T2&rpar; &NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;

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