Running Head: Starbucks Efe and Ife Analysis 1

Running Head: STARBUCKS EFE AND IFE ANALYSIS 1
Starbucks EFE and IFE Analysis
Name
Institution
Professor
Course
Date
This study source was downloaded by 100000841688737 from CourseHero.com on 02-18-2022 14:30:04 GMT -06:00
https://www.coursehero.com/file/41666022/Assessment-2docx/
STARBUCKS EFE AND IFE ANALYSIS 2
Starbucks External Factor Evaluation (EFE) Matrix
The EFE matrix for an organization is used to evaluate the major external factors facing
the organization in the market. For Starbucks, it will show the major external factors affecting
Starbucks in the global coffee market.
External Strategic Weight Rating Weighted Comments

Factors Score
(0.0–1.0; (1–4; (additional observations)

0=not 1=poor (multiply
important, and weight by
0.5=somew 4=good) rating)
hat
important,
and
1.0=import
ant)
Opportunities: 1.0 4 4.0 The Company is striving to

expand into new markets.
The Company
Could Expand into
New Emerging
Markets like Asia
Product 1.0 2 2.0 The company is not putting

Diversification. much effort to diversify its
products.
Digital Marketing 1.0 3 3.0 The company is trying to carry

out digital marketing but is not
yet there.
Threats: 1.0 4 4.0 The company is facing a lot of

competition from MacDonald’s
Competition and Dunkin Donuts. It needs to
look for ways to deal with this
competition.
High price of 1.0 4 4.0 The high prices of coffee beans

Coffee Beans has a lot of implications for
Starbucks Corporation. It means
the cost of operation will go
high and, therefore, the cost of
their products will be low.
Change in 0.5 3 1.5 The change in preferences and

preferences and lifestyles is somehow significant
lifestyle for Starbucks and may affect its
operations a great deal in the
future.
Starbucks Internal factor Evaluation (IFE) Matrix
Internal Weight Rating Weighted Comments

Strategic Score
Factors
(0.0–1.0; (1–4; (additional observations)
0=not 1=poor (multiply
important, and weight by
0.5=somew 4=good) rating)
hat
important,
and
1.0=import
ant)
Strengths: 4 4.0 Starbucks is highly efficient in the

way it carries out its business
Efficiency in operations and this gives it
its operations competitive advantage.
and a strong
growth which
results in
superior
performance
financially.
Global 1.0 4 4.0 Global presence is one of the most

Presence. important strengths of Starbucks
which allows it to maintain high
profit margins and net profits.
Positive Brand 1.0 4 4.0 Positive Brand Image and High

Image and Quality of products is a major
High Quality strength for Starbucks as it ensures
of Products. that their customers are always
buying their products, thus ensuring
them of a large share of the market
and continued sales.
Customer 1.0 4 4.0 Customer loyalty allows Starbucks to

Loyalty. achieve high sales volume and hence
a huge flow of cash.
Weaknesses: 1.0 4 4.0 The expensiveness of the products of

Starbucks is one of the main factors
Expensive that makes it difficult to increase its
products. market share as most of the
customers resort to their competitors
who offer products at lower prices.
Self- 0.5 2 1.0 Self-cannibalization is important as

Cannibalizatio competition will arise among the
n. different stores in the United States
due to a heavy presence of them.
Culture Clash. 0.5 2 1.0 Culture clash affects the success of

Starbucks abroad. However, it is not
a major weakness.
Dependence 1.0 3 3.0 Dependence on the US market is not

on the US a major threat as the people are still
Market. willing to buy Starbucks’ production.
Low focus on 0.5 2 1.0 Low focus on marketing is a

Marketing. weakness because it means that not
all prospective buyers get to know
about the products that Starbucks
offers.
High Cost of 1.0 4 4.0 High cost of operation is a major

Operation. weakness because it increases the
prices of the products and makes
many prospective buyers shy away
from buying products from

Starbucks.
What do you think would allow the organization to capitalize on its strengths?
There are various things Starbucks can do to capitalize on its strengths. The company
should use its superior financial performance to try different ways in which it can attract more
customers. One way is by lowering the prices of products to see how many customers will come
to the business as a result. This will allow the company to compare the revenue gotten from the
sales of the products to more customers at reduced price and the revenue gotten from the sales of
a few products at higher prices. As a result, the company will be able to know the best approach.
The company should also use its global presence to increase the range of products it sells so as to
increase profits and its share of the market in different countries in the world.
The most important strengths for Starbucks Corporation are its positive brand image, the
high quality of the products it offers and the loyalty of its customers. The company can capitalize
on this by ensuring that it continues to provide products of high quality so that it can retain its
customers and even get more. This will raise its share of the market significantly. This strength
also gives the company the ability to introduce new products. Because the brand is associated
with high quality, consumers will be willing to try any new products that will come from the
company.
What do you think would allow the organization to improve upon its weaknesses?
Most of the weaknesses of Starbucks Corporation are not things that are simple to handle.
However, the company can still do something to remedy the situation. The company can deal
with the issue of the expensiveness of their products by striving to sell the products at such a
price that it will still make profits while attracting a larger pool of customers. This can be done
by lowering the prices of products so that the company avoids losing customers to its
competitors who offer products at lower prices. Cheaper prices, coupled with the high quality of
goods and excellent customer service, will help the company to achieve an edge over its
competitors and ensure that it gets the largest share of the market among the users of coffee.
Culture clash and self-cannibalization are weaknesses the company has little control over.
The company could reduce its dependence on the United States market by establishing
stores in many other countries to ensure that majority of its revenue does not come from one
nation. This will be of great help to the company because it will not suffer in case of an
economic downturn in the United States as there will be flow of cash from other markets in the
world. In addition, the company can take care of the problem of low focus on marketing by
allocating revenues for advertising to ensure as many people as possible get to know about the
existence of the brand and the products it offers so as to increase the consumer base for the
company. This strategy will work effectively and increase revenues for the company in different
parts of the world.
What are potential issues for stakeholders in their functional areas?
If stakeholders at Starbucks Corporation do not address the issues that come out in the
company’s SWOT analysis and they ignore the opportunities, threats, weaknesses and strengths
identified, the consequences may be dire for the company. Therefore, the stakeholders in their
functional areas need to do all that is in their power to address the issues that are presented in the
SWOT analysis. Failure to address the problem of marketing and the high prices of products may
have negative consequences as it may cause the company to experience a reduction in the
number of customers. This is likely to lead to financial losses in the company. There need to be
appropriate decision-making among the different functional areas to make sure that all potential
threats are addressed and weaknesses corrected while maximizing on the strengths to seize any
opportunity that arises so that the company is set on the path to success. The stakeholders are key
to the running of the company and, therefore, their active participation in finding solution to
problems that affect the business and coming up with effective strategies to set the business for
success and align it with its strategic goals is indispensable.
External factor Evaluation Pros
 It enables the company to perceive shifts in the business environment.
 It enables the company to deal with risks more effectively.
 It enhances the process of making decisions when it comes to the allocation of resources
(Jurevicius, 2014).
External factor Evaluation Cons
 There are circumstances that cannot be foreseen.
 It does not make it possible for the company to know the know-how of its competitors
(Jurevicius, 2014).
Internal Factor Evaluation Pro
 It makes it possible to understand the business structure well and the factors that affect it so
that better decisions can be made to enhance success.
 It offers an opportunity for the business to expand its operations and diversify on its products
(Jurevicius, 2014).
Internal Factor Evaluation Cons
 The internal factors of the business are subject to regulation by the government and the
offerings of the competitors of the company (Jurevicius, 2014).
Reference
Jurevicius, O. (2014). Why you need to know about IFE & EFE Matrices. Retrieved from
https://www.strategicmanagementinsight.com/tools/ife-efe-matrix.html
Powered by TCPDF (www.tcpdf.org)

Running Head: Starbucks Efe and Ife Analysis 1

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Running Head: Starbucks Efe and Ife Analysis 1

Uploaded by

Copyright:

Available Formats

Running Head: STARBUCKS EFE AND IFE ANALYSIS 1

Starbucks EFE and IFE Analysis

Starbucks External Factor Evaluation (EFE) Matrix

Starbucks in the global coffee market.

External Strategic Weight Rating Weighted Comments

(0.0–1.0; (1–4; (additional observations)

Opportunities: 1.0 4 4.0 The Company is striving to

Product 1.0 2 2.0 The company is not putting

Digital Marketing 1.0 3 3.0 The company is trying to carry

Threats: 1.0 4 4.0 The company is facing a lot of

High price of 1.0 4 4.0 The high prices of coffee beans

Change in 0.5 3 1.5 The change in preferences and

Starbucks Internal factor Evaluation (IFE) Matrix

Internal Weight Rating Weighted Comments

Strengths: 4 4.0 Starbucks is highly efficient in the

Global 1.0 4 4.0 Global presence is one of the most

Positive Brand 1.0 4 4.0 Positive Brand Image and High

Customer 1.0 4 4.0 Customer loyalty allows Starbucks to

Weaknesses: 1.0 4 4.0 The expensiveness of the products of

Self- 0.5 2 1.0 Self-cannibalization is important as

Culture Clash. 0.5 2 1.0 Culture clash affects the success of

Dependence 1.0 3 3.0 Dependence on the US market is not

Low focus on 0.5 2 1.0 Low focus on marketing is a

High Cost of 1.0 4 4.0 High cost of operation is a major

from buying products from

parts of the world.

What are potential issues for stakeholders in their functional areas?

success and align it with its strategic goals is indispensable.

External factor Evaluation Pros

 It enables the company to perceive shifts in the business environment.

 It enables the company to deal with risks more effectively.

External factor Evaluation Cons

 There are circumstances that cannot be foreseen.

Internal Factor Evaluation Pro

that better decisions can be made to enhance success.

Internal Factor Evaluation Cons

offerings of the competitors of the company (Jurevicius, 2014).

You might also like