Opportunities 1. Expand Specialty Coffee as a big potential exists to increase the business from the indicated 22% as per note (1). 2. Introduce Flavored Coffee as per note (2). 3. Grow the business through carts (kiosks) in populated areas like malls. 4. Introduce Franchise opportunities, particularly in smaller cities and countries. 5. Rent Space for Kiosks at specialty fast food companies. (This may negatively affect the brand image; to avoid this problem, it may be done under a different brand name) 6.
Rent Space at Costco, and Target as these are perceived to have a higher clientele base. 7. Make agreements with Companies who already have a distribution channel that do not sell coffee (this may negatively affect the retail stores). Under this focus on products that their revenues are declining in stores. 8. Acquire smaller chains particularly the ones in Canada. 9. Leveraging the brand into other complimentary products such as tea, sweets, etc. 10. Introduce a loyalty program that can assist management in measuring behavior of their clients. 1. Provide sample products to people in different locations. 12. Expand the mail order and online presence through the alliances with specialized online stores ie, Amazon. 13. Continue to measure same store sales and provide incentives to managers to ensure that profitability is achieved. 14. Re-package and rename some products to meet the younger consumer segments. 15. Starbucks stores and / or products should be on every college campus. 16. Starbucks Kiosks should be available in large conventions. 17.
Starbucks products should be part of every hotel offering. Strengths: 1. Very powerful brand name. 2. Very good management team. 3. A relatively large location presence. 4. Operating Profit and net profit margins are increasing displaying strength in pricing structure. Weaknesses: 1. Witnessing same store sales decline. 2. Barrier of entry is easy for competitors to enter the market. 3. Working capital and current ratio are estimated to decline. 4. Cash Flow from Operations and Free Cash Flow are expected to decline. . EBIT margins are expected to be steady or decline. 6. ROE and ROA are expected to decline. Threats: 1. Will not be able to maintain growth rates indefinitely. 2. Serious competitor may easily enter the market. 3. Price of beans (as a commodity) is highly dependent on exterior factors. 4. Coffee as a commodity is highly regulated by governments. 5. Starbucks business model is highly dependent on one commodity. 6. Price Hedging and arbitrage dealing may back fire.