SWOT seminar
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Starbucks has many internal strengths like its famous brand, trendy atmosphere, and product quality. However, it also has weaknesses such as high prices and issues with standardization. Externally, opportunities exist through new distribution channels and markets, but threats include intense competition and economic downturns lowering consumer buying power. A SWOT analysis can help Starbucks leverage its strengths, address weaknesses, capitalize on opportunities, and mitigate threats.
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SWOT seminar
- 1. SWOT analysis Seminar for MKT1002 Elena Chatzopoulou
- 2. Definitions of SWOT … An analytical tool which should be used to categorize significant environmental factors both internal and external to the organization (Pickton and Wright, 1998) … Enable us to adapt a firm’s internal qualities or characteristics (strengths and weaknesses) to the external situations (threats and opportunities) (Hill and Westbrook, 1997)
- 3. SWOT should be… • Simple and practical, as it will be communicated to several people and everyone should understand it in order to put it in practice • Focusing on key issues and factors, which are most likely to influence a firm’s success • A tool for strategy formulation, managerial decision making and action Should be not… • a static tool BUT a dynamic part of the business development process • too simplistic as it could lead to damaging consequences and suggestions detailed investigation needed
- 4. SWOT table This needs more detail and evidence of sources Provide more details
- 5. STRENGTHS WEAKNESSES • International famous brand and logo strong brand awareness • Trendy atmosphere attracting consumers • Strategic locations preferred by consumers • Recently bought a coffee farm in Cost Rica credibility, experience & power • Training for employees good service • Equal treatment to employees productive employees • Range of products (varieties of coffee, selling coffee beans & equipment) please all the tastes, consumer satisfaction, consumer flow • Coffee quality is not as good as reputation disappointment • Standardisation of product (not always matching the cultural differences worldwide) • High prices (not for all) • Many stores close to each other (self- cannibalism) OPPORTUNITIES THREATS • New distribution channels (retailers, restaurants, universities, etc.) new consumers • New markets (e.g. Asia, South America) profits • Fair trade coffee products conceived as an ethical brand • Ethical values: Starbucks UK & Ireland • Tax evasion scandal / media unethical, disappointment • Celebrity boycottage (Monsanto) influencing consumers • Intense competition within the coffee market expand to new markets • Global crisis (low buying power)
- 6. TOWS matrix (Weihrich, 1982) STRENGTHES WEAKNESSES OPPORTUNITIES SO STRATEGIES (e.g. new selling channels-distributors) WO STRATEGIES (e.g. collaborations) THREATS ST STRATEGIES (e.g. new products) WT STRATEGIES (e.g. discontinue a specific production line) Good strategy = adaptation of a firm’s internal qualities or characteristics to the external situations (Hill and Westbrook, 1997)
- 7. Group of 4 – practice Develop an outline SWOT analysis for: • your university OR • your favourite coffee shop/restaurant OR • McDonalds/Pizza Hut/Kentucky Fried Chicken Tips: 1. Choose your team leader (to present your SWOT) 2. Start working… 3. Focus on where the organisation wants to be; how it gets there and what may prevent it achieving objectives 4. SWOT Analysis: Internal - Strengths & Weaknesses: Consider its competitive advantages and critical success factors External – Opportunities & Threats: What are the key issues facing your organisation for the future. How should it develop and what may constrain it? Each group should choose one organisation to consider
- 8. Suggested answers Your college/university Potential strengths/weaknesses: • quality of teaching staff, of support staff, of teaching facilities, of library staff and stock, • fee prices, location, • availability of accommodation, price of accommodation, • range of courses offered, specific courses offered • employment prospects Potential opportunities/threats: • government funding, government policy on grants/bursaries/loans, • existing and new colleges/universities: competition, perception of the quality/desirability of the college/university and its competitors, range and specific courses offered by competing colleges/universities, costs of living at competing colleges/universities • economic conditions affecting parental ability to support students
- 9. Your favourite coffee shop or restaurant : Potential strengths/weaknesses: location, product quality, staff quality/knowledge, facilities (ranging from basic requirements such as cleanliness of toilets to added value facilities such as Wi-Fi), range of menu offered, atmosphere, décor, reputation/image, other customers, prices Potential opportunities/threats: existing competition quality, location, price, staff etc., economic conditions – affecting individual ability to pay, expansion opportunities, social trends (towards or away from coffee shops/pubs)
- 10. McDonalds: Potential strengths: brand awareness, locations, range of products, convenience, price Potential weaknesses: quality, other customers, atmosphere, décor, reputation/image Potential opportunities: further global expansion, further product range development, in recession people taking cheaper options-healthy diet Potential threats: healthy eating awareness, anti-American feelings, increase in direct and indirect competition including healthier options (subway, coffee shops etc), media (Reilly, 2015), anti-globalisation lobbyists (Phelps, 2007; PETA, 2013)
- 11. Thank you
- 12. Heinz Weihrich, (1999) "Analyzing the competitive advantages and disadvantages of Germany with the TOWS Matrix ‐ an alternative to Porter’s Model", European Business Review, Vol. 99 Iss: 1, pp.9 - 22 Hill, T. and Westbrook, R. (1997) 'SWOT analysis: It's time for a product recall', Long Range Planning, 30(1), pp. 46-52. PETA (2013) 'McDonald's', McCruelty: I'm hatin' it website. Available at: http://www.mccruelty.com/ (Accessed: 17/3/2016). Phelps, N. (2007) The Longest Struggle : Animal Advocacy from Pythagoras to PETA. Lantern Books. Pickton, D.W. and Wright, S. (1998) 'What's swot in strategic analysis?', Strategic Change, 7(2), pp. 101-109. Reilly, J. (2015) 'Victory for Jamie Oliver in the U.S. as McDonald’s is forced to stop using ‘pink slime’ in its burger recipe', Daily mail edn). Available at: http://www.dailymail.co.uk/news/article- 2092127/Jamie-Oliver-Victory-McDonalds-stops-using-pink-slime-burger-recipe.html. (Accessed: 17/3/2016). Weihrich, H. (1982) 'The TOWS matrix—A tool for situational analysis', Long Range Planning, 15(2), pp. 54-66. References