Purpose of a SWOT Analysis

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The Purpose of a SWOT Analysis
Charles Anderson Joyner III
Grantham University



Every business to include the largest ones that control their areas of industry--has a limited supply of manpower, production capacity and capital. Evaluating the company’s strengths, weaknesses, opportunities, and threats helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and
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By 2010, the company

was losing money and had a major drop in its stock price. Its stock price had dropped to around

$10 in 2009 from its high of $35 a few years earlier. The economic crisis throughout 2008 and

2009 really hit Starbucks’ stock price hard ("SBUX Basic Chart | Starbucks Corporation Stock –

Yahoo! Finance," 2011). Even though Starbucks’ stock price took a huge hit, its net revenues did

not. Starbucks’ profits went from $7.8 billion in 2006, to $10.4 billion in 2008, down to $9.8

billion in 2009, and back up to $10.7 billion in 2011 (Starbucks Corporation, 2010). The

amazing thing here is that the company endured an economic crisis and still come out stronger

than when its stock price was at its highest. Lauren Roby (2011) performed a well researched

SWOT analysis of Starbucks covering this time frame and identified the following strengths,

weaknesses, opportunities, and threats.


#1: Market leader in the coffee industry including almost 17,000 stores as of the end of the

2010 (Starbucks Corporation, 2010).

#2. Starbucks is recognized by customers worldwide due in part to its high quality products

and consumer friendly environment.

#3. Starbucks is on good footing financially. Its stock price might have fallen in the late

2000’s, but its profits barely took a hit (Starbucks Corporation,
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