TOWS MATRIX for STARBUCKS

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TOWS MATRIX for STARBUCKS:

A TOWS Matrix can also be understood as an extension of the SWOT matrix. A SWOT matrix helps us identify the strengths, weaknesses, opportunities and threats for a business. However, a TOWS matrix helps with strategy formulation on the basis of the identified factors. It is an analytical tool that helps build over your strengths and make the best use of available opportunities while also minimizing the threats. For a better and deeper understanding go through this   example TOWS matrix of Starbucks.

  Starbucks : Premium Quality Coffee

Starbucks is the largest coffeehouse chain in the world which had more than 22,550 stores open in 2015. There are three things well known about Starbucks – Premium quality, excellent customer service and ethical business. Apart from these things Starbucks is also known for its excellent supply chain management.

– Strengths:

  • Brand image
  • Premium quality
  • Excellent customer service
  • Known for ethical business
  • well managed supply chain

– Weaknesses:

  • High priced products
  • Imitation by others

– Opportunities:

  • Expansion in the emerging markets
  • Diversification of the product mix
  • Cobranding or partnership with other brands

– Threats:

  • Heavy competition from the rival brands
  • Consumer trends
  • Imitation of its premium products

The TOWS Matrix that follows will discuss the strategic options which Starbucks has and can use to make the best of its strengths, reduce its weaknesses as well as minimize the challenges arising out of its threats. It also discusses how Starbucks can capitalize on the available opportunities using its key strengths.

STARBUCKS TOWS MATRIX

Strengths (S) Weaknesses (W)
Opportunities (O) SO – Using strengths to capitalize on available opportunities WO – Overcome weaknesses to capitalize on opportunities
Threats (T) ST – Use strengths to avoid threats WT- Reduce weaknesses to avoid threats

SO –

  • Market the brand heavily in the less penetrated areas. Use the global brand image to extend presence in emerging economies.
  • Extend the product mix while maintaining the focus on product quality.
  • Partner the other well-known brands in the Asian markets to penetrate the market faster. Mutual benefit for both from each other’s capabilities.

WO –

  • Release medium priced products to attract middle class customers in larger numbers and increase sales in the Asian countries.

ST –

  • Focus on marketing and advertising to attract and retain more and more customers and reduce competitive pressure.
  • Marketing to the millennial generation to capitalize on changing demographic trends.
  • Advertising the quality of products to differentiate from competing brands and reduce the challenge due to imitation.
  • Marketing the ethical image of the business to reduce competitive pressure.

WT –

  • Release a range of low cost products to minimize the cost challenge from the competing brands.
  • Marketing the quality of its premium products to minimize the threat arising from imitation by the other brands that sell it cheaper.