Strategic Management | IBM-IC 2021

SWOT Analysis Form

Business/Company Starbucks
Name

Members’ Name & NIM Tim

Instructions: Within you group, discuss and fill out this form. Make sure to fill out all the tables
and diagrams, answer all questions, and elaborate your reasons. Submit the fill out form
according to the deadline written in Moodle.
Note: If you are confused how to fill in this form, refer to the reading materials and the lecture
PPT.
Simple SWOT Analysis
Fill out the table below

Strengths Weaknesses

1. Strong brand recognition 1. Major dependence on a single product

line (coffee)
2. Innovative business model
2. Intense competition in the coffee industry
3. Commitment to sustainability
3. Potential negative impact of commodity
price fluctuations

Opportunities Threats

1. Acquiring complementary businesses or 1. Competition from other coffee chains and

brands
2. Expanding into new markets
3. Expanding the Starbucks Rewards loyalty
program and other customer loyalty
initiatives
independent coffee shops
2. Economic downturns or market instability
3. Changes in consumer preferences or
trends
 Strategic Management | IBM-IC 2021

IFE Matrix
Fill out the matrix below. Cell colored black is not to be filled.

Strengths Weight Rating Score

Strong brand recognition 0.22 4 0.88

Innovative business model 0.19 3 0.57

Commitment to sustainability 0.15 3 0.45

Weaknesses

Major dependence on a single product line (coffee) 0.13 2 0.26

Intense competition in the coffee industry 0.16 3 0.48

Potential negative impact of commodity price fluctuations 0.15 2 0.30

Total 1.00 2.94

Analysis: elaborate your reasons for each strategy stated in the matrix above.
Strengths
trong brand recognition is a key strength for Starbucks. The company has a solid reputation for
quality and customer service, making it one of the most recognizable and renowned coffee
brands in the world. This strong brand recognition has helped Starbucks establish a loyal
customer base and differentiate itself from competitors.
Having a strong brand can also help Starbucks command a higher price for its products, as
customers are willing to pay a premium for the quality and reputation that the brand
represents. Strong brand recognition can also make it easier for Starbucks to enter new
markets and expand its customer base, as the brand is already well-known and trusted.
Strong brand recognition is a key asset for Starbucks and helps to drive sales and support the
company’s growth.
Starbucks has a long history of innovation, including the introduction of the coffee bar concept
and the development of new products such as the Frappuccino. This focus on innovation has
helped Starbucks stay ahead of the competition and maintain its position as a leader in the
coffee industry.
Innovation is also essential for meeting the changing needs and preferences of customers. By
continually introducing new products and improving its operations, Starbucks can better meet
the evolving needs of its customer base and remain relevant in a fast-changing market. This can
help to drive sales and support the company’s growth.
 Strategic Management | IBM-IC 2021

Starbucks places a high priority on sustainability, and it has put in place several initiatives to
lessen its impact on the environment and support sustainable agriculture. For example,
Starbucks has set a goal to become resource positive, meaning that it will give back more
resources to the planet than it uses.
This commitment to sustainability has several benefits for Starbucks. First, it helps to reduce
the company’s environmental impact, which can improve its reputation and appeal to socially
conscious consumers. It can also help Starbucks to reduce its costs, as sustainable practices can
lead to more efficient operations. Additionally, a commitment to sustainability can help
Starbucks to attract and retain top talent, as many employees are attracted to companies that
prioritize social and environmental responsibility.
Weaknesses
One of Starbucks’ weaknesses is its major dependence on a single product line: coffee. While
the company does offer a variety of other products, such as tea, smoothies, and food items,
coffee is the primary focus of the business and the main source of its revenue. This dependence
on a single product line can be seen as a weakness because it leaves the company vulnerable to
fluctuations in demand for coffee and changes in consumer preferences.
If there were a significant decline in demand for coffee or a shift in consumer preferences
towards alternative beverages, it could hurt Starbucks’ financial performance. On the other
hand, if coffee demand remains strong and consumer preferences remain favorable, this
dependence may not necessarily be a weakness.
Another weakness of Starbucks is the intense competition it faces in the coffee industry. The
coffee industry is highly competitive, with a large number of players, both large and small, vying
for market share. Starbucks faces competition from a variety of sources, including other
specialty coffee chains, independent coffee shops, and even fast food restaurants and
convenience stores that sell coffee.
The company also faces competition from emerging players, such as specialty coffee roasters,
and new entrants into the market. This intense competition can make it challenging for
Starbucks to maintain its market position and can put pressure on the company to continually
innovate and differentiate itself to remain competitive. In addition, intense competition can
lead to price wars and other forms of price competition, which can impact the company’s
margins and profitability.
Starbucks is vulnerable to the potential negative impact of commodity price fluctuations,
particularly when it comes to the raw materials used to produce its products. Coffee, in
particular, is a commodity that is subject to price fluctuations due to a variety of factors,
including weather conditions, disease outbreaks, and global economic conditions. If the price of
coffee were to significantly increase, it could hurt Starbucks’ profitability and financial
performance..
 Strategic Management | IBM-IC 2021

EFE Matrix
Fill out the matrix below. Cell colored black is not to be filled.

Opportunities Weight Rating Score

Acquiring complementary businesses or brands 0.19 3 0.57

Expanding into new markets 0.18 4 0.72

Expanding the Starbucks Rewards loyalty program and other 0.16 3 0.48
customer loyalty initiatives

Threats

Competition from other coffee chains and independent 0.16 2 0.32

coffee shops

Economic downturns or market instability 0.17 3 0.51

Changes in consumer preferences or trends 0.14 2 0.28

Total 1.00 2.88

Analysis: elaborate your reasons for each strategy stated in the matrix above.
Opportunities
Acquiring complementary businesses or brands is an opportunity for Starbucks to expand its
capabilities, diversify its portfolio, and enter new markets. By acquiring companies or brands
that complement its existing business, Starbucks can access new technologies, expertise,
customer segments, or distribution channels that can help drive growth and value for the
company.
For example, Starbucks has made a number of acquisitions over the years, such as the
acquisition of Teavana, which allowed the company to enter the tea market and expand its
portfolio of non-coffee products.
Starbucks needs to keep growing and diversifying its business, and one way to do that is to
move into new markets. The company has a strong presence in the US, but there are still many
markets where it does not have a significant presence or where it has struggled to gain a
foothold.
 Strategic Management | IBM-IC 2021

Expanding the Starbucks Rewards loyalty program and other customer loyalty initiatives is an
opportunity for Starbucks to deepen its relationship with its customers and to drive customer
loyalty and retention. The Starbucks Rewards program is a loyalty program that rewards
customers for their purchases with points that can be redeemed for rewards, such as free
drinks or food items. Expanding the program could involve offering more rewards or benefits to
customers, such as exclusive offers or discounts, or increasing the number of ways in which
customers can earn points. Other customer loyalty initiatives could include personalized
recommendations or offers based on customer preferences or purchase history, or special
events or experiences for loyalty program members. By expanding its loyalty program and
other customer loyalty initiatives, Starbucks can create a more engaging and rewarding
experience for its customers and encourage them to continue to patronize the company.
Threats
Starbucks faces competition from a variety of sources, including other coffee chains and
independent coffee shops. These rivals may provide similar products and services to Starbucks,
which could make it challenging for the business to stand out from the competition and hold
onto its market share. Competition from other coffee chains and independent coffee shops can
impact Starbucks’ market share, customer traffic, and profitability, and can also put pressure on
the company to continually innovate and improve its offerings in order to remain competitive.
Economic downturns or market instability can be a threat to Starbucks, as they can impact
consumer spending and the demand for the company’s products and services. During times of
economic uncertainty or recession, consumers may be more cautious about their spending and
may choose to patronize lower-priced options or cut back on discretionary purchases, such as
coffee or food items. Market instability can also impact the cost of raw materials or other
inputs used to produce Starbucks products, which can impact the company’s margins and
profitability.
If there is a shift in consumer preferences toward healthier or more sustainable products, it
could impact the demand for certain Starbucks products or put pressure on the company to
adapt its offerings to meet these changing preferences. Also, if there are changes in consumer
trends, such as a shift towards online or mobile ordering, it could impact the way Starbucks
does business and require the company to adapt its operations in order to remain competitive.
 Strategic Management | IBM-IC 2021

SWOT Matrix (TOWS)

Instruction: Fill out the matrix below to put meaning for your SWOT analysis.

Note: make sure all 3. Strengths 4. Weaknesses

points are covered (if
not covered, it means
you have unused
strengths &
opportunities, and
alarming weaknesses &
threats)
• Strong brand • Major dependence on a
recognition single product line
(coffee)
• Innovative business
model • Intense competition in the
coffee industry
• Commitment to
sustainability

1. Opportunities 5. SO Strategies 6. WO Strategies

• Acquiring Starbucks has been known as - The increasingly fierce
complementary an exclusive brand, so by competition can be used
businesses or expanding other Starbucks as an opportunity by
brands loyalty programs, Starbucks acquiring other local
will become more widely businesses to
• Expanding into
known and the exclusive complement Starbucks
new markets
image will remain with products and services so
• Expanding the Starbucks. that Starbucks will be
Starbucks known as an exclusive
Rewards loyalty brand that is friendly
program and where the store is located
other customer (in some countries
loyalty consumers sometimes
initiatives prefer local brands)
- Starbucks' dependence on
1 product line can be
strengthened by
expanding the loyalty
program so that Starbucks
is better known as an
exclusive coffee shop

2. Threats 7. ST Strategies 8. WT Strategies

• Competition Using strength to mitigate Identify weakness that will be
from other risks & threats influenced greatly by threats,
 Strategic Management | IBM-IC 2021

coffee chains - By adopting a then develop strategies to reduce

and sustainability weakness and avoid threats
independent strategy, Starbucks
- By adopting one product
coffee shops can continue to
line, namely coffee, if
follow current trends
• Economic there is a decline or
and be known for
downturns or market instability then
being
market Starbucks only needs to
environmentally
instability look for another supplier
friendly, which is
(in this case coffee) and
• Changes in currently being done
does not need many
consumer by many people
suppliers for raw
preferences or around the world
materials
trends
- Starbucks' very strong
innovation can make
it a strength to
compete with other
coffee chains