CLC-Steps Required for Financial Recommendations

CLC-SWOT Matrix, BCG Matrix, and IE Matrix

Jose Alonso, Tamberlyn Crayton, Dinaja Dowdy, Pauline Morgan, and Brad Overson

Colangelo College of Business, Grand Canyon University Comment by Daniel Smith: Team - well done. Your write-up was thorough, clearly presented and you included critical thinking in your write-up. I hope that this exercise was helpful for you. Dr. Smith

MGT 660: Strategic Management

May 19, 2021

SWOT Matrix

Strengths

1.       Strong brand- Starbucks is a popular well-known coffee brand that continues to prove its self-year after year in growing popularity and sales.

2.       Public presence – Starbucks has increased its locations drastically and continues to build its presence in every neighborhood.  

3.       Supply chain- With having stores across the globe they have managed to become known for their supply chain with its global network of suppliers.

4.       Competition acquisition- Due to the financial success, Starbucks has been able to acquire some of its competitors such as Seattle’s Best taking over their portion of the market share.   Comment by Daniel Smith: Reasonable strengths - excellent

Weaknesses

1.        First and foremost, as most of us coffee drinkers are aware, Starbucks is expensive!

2.       They offer coffee just the same as Circle K, Dunkin, McDonald’s, along with the ability to make it yourself in the convenience of your own home.

3.       They do not change what they make for the culture, if you have been on vacation, they do not alter what they offer to meet the local culture (could be a strength as well).

Opportunities

1.       Coffee is continually growing in popularity, especially amongst the younger generation.  The opportunity for expansion is quite high and probably in other countries as well.

2.       The opportunity to develop something new and unique to the coffee world.

3.       Opportunity to work on getting into more home brewing coffees.

4.       Increase online sales (like subscribe and save-similar to amazon)

5.       Order from your phone for a pick-up or delivery

Threats

1.       Competitors tasting better for a lower cost.

2.       Current competitors can make better moves to gain market share.

3.        Take over from a local small business, not a chain.

4.       Economic Recession- Starbucks coffee is a luxury, not a necessity.

BCG Matrix

The BCG Matrix for Starbucks will help Starbucks in implementing the business-level strategies for its business units. The analysis will first identify where the strategic business units of Starbucks fall within the BCG Matrix for Starbucks.

Stars Question Marks

The financial services strategic business unit is a star in the BCG matrix of Starbucks. It operates in a market that shows potential in the future.  Starbucks earns a significant amount of its income from this SBU. Starbucks should vertically integrate by acquiring other firms in the supply chain. This will help it in earning more profits as this Strategic business unit has potential.

The international food strategic business unit is a cash cow in the BCG matrix for Starbucks.  This business unit has a high market share of 30% within its category, but people are now inclined less towards international food.  This change in trends has led to a decline in the growth rate of the market. The recommended strategy for Starbucks is to invest enough to keep this strategic business unit under operations.  Comment by Daniel Smith: Very well-developed matrix - excellent If it no longer remains profitable and turns into a dog, then Starbucks should divest this strategic business unit.

Customer loyalty and brand loyalty are both units that fall in the cow category of the BCG matrix. Although Starbucks’ experience is one for the books, their items are still overpriced. Therefore, not many customers return. They proceed in seeking coffee from their competitors for a much cheaper price.

Competition and availability are two units in the dog portion of the BCG matrix. There have been more competitors evolving in the coffee industry. Dunkin Donuts is Starbucks’ biggest competitor. They are rated higher in many categories of business compared to Starbucks.  There are not many Starbucks restaurants around like their competitors. It is limited to the US and some international countries; therefore, fewer stores are present.

Cash Cows Dogs

IE Matrix

The internal matrix uses the scores our group has obtained from the Internal Factor Evaluation Matrix (IFE) and the External Factor Evaluation Matrix (EFE). The scores are rated 1-5 at which 1 indicates the weakest point and 5 indicating the strongest point. Listed above shows the EFE matrix as the Y-axis and the IFE as the X-axis. The original score that was obtained from the EFE was 2.55 and the score for the IFE was 2.56. Given this information, this places Starbucks somewhere in the middle quadrant. This indicates that the company is heading in the right direction but there are still various improvements at an external and internal level.  Comment by Daniel Smith: Clearly presented data and thorough write-up

Reference

Starbucks 10-K. Financial Data. https://investor.starbucks.com/financial-data/sec-filings/sec-filings-details/default.aspx?FilingId=14498278