Swot_Analysis

Foundations of Business Axia College of University of Phoenix Introduction SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from fortune 500 companies. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning has been the subject of much research. * Strengths: characteristics of the business or team that give it an advantage over others in the industry. * Weakness: are characteristics that place the firm at a disadvantage relative to others. * Opportunities: external chances to make greater sales or profits in the environment. * Threats: external elements in the environment that could cause trouble for the business. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is not attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development. Starbucks Coffee SWOT Analys Strengths: Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004. It is a global coffee brand built upon a reputation for fine products and services. Starbucks was one of the Fortune Top 100 Companies to work for in 2005. The company is a respected employer that values its workforce. The organization has strong ethical values and an ethical mission statement. Product diversification Established logo, developed brand, copyrights, trademarks, website and patents High visibility locations to attract customers Valued and motivated employees, good work environment Good relationships with suppliers Globalized Customer base loyalty Strong financial foundation Knowledge base High visibility locations to attract customers Weaknesses: Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. The organization has a strong presence in the United States of America. It is often argued that they need to look for a portfolio of countries, in order to spread business risk. Ever increasing number of competitors in a growing market Cross functional management Opportunities: Starbucks are very good at taking advantage of opportunities. In 2004 the company created a CD-burning service in their Santa Monica, California café with Hewlett Packard, where customers create their own music CD. New products and services that can be retailed in their cafes, such as Fair Trade products. The company has opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. Co-branding with other manufactures of food and drink, and brand franchising to manufacturers of other goods and services both has potential. Expansion into retail operations Technological advances Emerging international markets Distribution agreements Brand extension Continued domestic expansion/domination of segment Threats: Who knows if the market for coffee will grow and stay in favor with customers, or whether another type of beverage or leisure activity will replace coffee in the future' Starbucks are exposed to rises in the cost of coffee and dairy products. Since its conception in Pike Place Market, Seattle in 1971, Starbucks success has lead to the market entry of many competitors and copycat brands that pose potential threats. Coffee price volatility in developing countries. Negative publicity from poorly treated farmers in supplying countries Consumer trends toward more healthy ways and away from caffeine Fragile state of worldwide production of specialty coffees References (Internet from 10/16/09) http://www.misd.k12.wi.us/mhs/depts/business/teachers/bruechert/documents (Internet from 7/6/09) http://portal.cornerstones4kids.org/stuff/contentmgr/files