SWOT examples

Found on marketingteacher.com

Amazon:

Strengths.

• Amazon is a profitable organization. In 2005 profits for the three months to June dipped 32% to $52m (£29.9m) from $76m in the same period in 2004. Sales jumped 26% to $1.75bn. Until recent years Amazon was experiencing large losses, due to its huge initial set up costs. The recent dip is due to promotions that have offered reduced delivery costs to consumers.
• Customer Relationship Management (CRM) and Information Technology (IT) support Amazon's business strategy. The company carefully records data on customer buyer behaviour. This enables them to offer to an individual specific items, or bundles of items, based upon preferences demonstrated through purchases or items visited.
• Amazon is a huge global brand. It is recognisable for two main reasons. It was one of the original dotcoms, and over the last decade it has developed a customer base of around 30 million people. It was an early exploiter of online technologies for e-commerce, which made it one of the first online retailers. It has built on nits early successes with books, and now has product categories that include electronics, toys and games, DIY and more.

Weaknesses.

• As Amazon adds new categories to its business, it risks damaging its brand. Amazon is the number one retailer for books. Toy-R-Us is the number one retailers for toys and games. Imagine if Toys-R-Us began to sell books. This would confuse its consumers and endanger its brands. In the same way, many of the new categories, for example automotive, may prove to be too confusing for customers.
• The company may at some point need to reconsider its strategy of offering free shipping to customers. It is a fair strategy since one could visit a more local retailer, and pay no costs. However, it is rumoured that shipping costs could be up to $500m, and such a high figure would undoubtedly erode profits.

Opportunities.

• The company is now increasingly cashing in on its credentials as an online retail pioneer by selling its expertise to major store groups. For example, British retailer Marks and Spencer announced a joint venture with Amazon to sell its products and service online. Other recent collaborations have been with Target, Toys-R-Us and the NBA. Amazon's new Luxembourg-based division aims to provide tailored services to retailers as a technology service provider in Europe.
• There are also opportunities for Amazon to build collaborations with the public sector. For example the company announced a deal with the British Library, London, in 2004. The benefit is that customers c an search for rare or antique books. The library's catalogue of published works is now on the Amazon website, meaning it has details of more than 2.5m books on the site.
• In 2004 Amazon moved into the Chinese market, by buying china's biggest online retailer, Joyo.com . The deal was reported to be worth around $75m (£40m). Joyo.com has many similarities to its new owner, in that it retails books, movies, toys, and music at discounted prices.

Threats

• All successful Internet businesses attract competition. Since Amazon sells the same or similar products as high street retailers and other online businesses, it may become more and more difficult to differentiate the brand from its competitors. Amazon does have it s brand. It also has a huge range of products. Otherwise, price competition could damage the business.
• International competitors may also intrude upon Amazon as it expands. Those domestic (US-based) rivals unable to compete with Amazon in the US, may entrench overseas and compete with them on foreign fronts. Joint ventures, strategic alliances and mergers could see Amazon losing its top position in some markets.
• The products that Amazon sells tend to be bought as gifts, especially at Christmas. This means that there is an element of seasonality to the business. However, by trading in overseas markets in different cultures such seasonality may not be enduring.

Ben & Jerry's:

Strengths

• Prestigious, established, successful, global operation, with sales in USA, Europe and Asia, which is synonymous with social responsibility and environmentalism. For example, its products are packed in unbleached cardboard containers.
• Ben & Jerry's also donates a minimum of $1.1 million of pretax profits to philanthropic causes yearly. The company sponsors PartnerShops, which are Ben & Jerry outlets independently owned and operated by nonprofit organizations such as Goodwill Industries. The company is also involved in other good causes, including global warming, gun control and saving family farms.

• The company sells its colorfully named ice cream, ice-cream novelties, and frozen yogurt under brand names such as Chunky Monkey, Phish Food, and Cherry Garcia. It also franchises some 750 Ben & Jerry's Scoop Shops worldwide.
• Ben and Jerry's were bought by consumer products manufacturer Unilever in 2000, but were still able to retain their social responsibility platform and kept both co-founders closely involved with product development. Their brands complement Unilever's existing ice cream brands.
• In 2009 Ben and Jerry's Chunky Monkey ice cream flavor was named in a top ten list of the best ice cream in London.
• In 2007 Ben and Jerry's co-founders, Ben Cohen and Jerry Greenfield were asked to join Lance Armstrong in speaking about clean technology and alternative energy at the Ernst and Young national entrepreneur of the year awards.
• In 2008, their market share was second only Haagen-Dazs who had a 44% market share while Ben and Jerry's had 36%. This was achieved in spite of a premium price point. The premium price of the product was supported by a high quality image, and high quality products.

Weaknesses

• In 2006, former CFO Stuart Wiles was convicted of embezzling some $300,000 from the company during his tenure at Ben & Jerry's, which ran from 2000 to 2004.
• In 2006 they had to stop using Michael Foods as their egg supplier, due to bad PR from the Humane Society, which alleged that Michel Foods treated chickens inhumanely.
• They achieved success despite several corporate weaknesses. The most obvious was a lack of professionalism in its management, and no clear mission statement (which they have amended). They reinvested huge amounts of property and equipment in 1994 increasing their long-term debts by almost 45% in 1993. They increased marketing and selling expenses and administrative infrastructure, which increased 28% to $36.3 million in 1994 from $28.3 million in 1993 and increased as a percentage of net sales to 24.4% in 1994 from 20.2% in 1993. They took out a vast amount of capital lease in their aim to automate their production to keep up with the intense competition.
• Their clear focus on multiple social responsibility issues could hurt the company by shifting the focus away from important business matters, and also add unnecessary costs.
• They need more experienced management to fuel aggressive growth in a downturned economy and change flat sales in their premium product lines.

Opportunities

• In today's health conscious societies the introduction of more fat-free and healthy alternative ice cream and frozen yogurt products.
• Provide allergen free food items, such as gluten free and peanut free.
• In 2009 Ben & Jerry's announced plans to roll out the country's first HFC-free freezers; freezers that would be sold to grocery stores and would not emit harmful chemicals into the atmosphere.
• In 2008 they acquired Best foods and Slim-fast which will allow them to enter a new industry of weight loss products. In turn they can now expand into new geographic markets-more countries, like Europe, where the weight loss/management trend is taking hold.
• They could expand their existing product lines to compete with the 'private-in house brands' offered by supermarkets, and in developing countries.
• Selling Ben and Jerry's premium ice cream in South America (which is an emerging market that has yet to be capitalized upon). There is a growing demand for premium ice cream in new markets like Asia.

Threats

• Much of their target market is constantly changing its product preferences (desiring to prevent diabetes, obesity etc.). That, coupled with a decrease in household sizes and discretionary income, has left sales flat in recent years.
• Consumers are concerned about fattening dessert products. Especially Ben and Jerry's target market, which are accustomed to reading nutrition labels.
• Any contamination of the food supply, especially e-coli.
• Major competitors, like Nestle (Pillsbury), Kraft Foods, Dunkin Donuts, and Dean Foods. They also have competition from global food companies with similar products and any grocery store label products. Much of their competition seems to be merging together, in order to remain marketable in this tough economy.
• Experts say that animal feed prices are rising, partly because biofuel crops are replacing cow fodder. In turn, the high priced animal feed pushes up the cost of milk. Prices of all milk products are rising worldwide, due to what some call a "perfect storm" of low supply and high demand. There is a distinct possibility that their may not be enough milk to meet demand, and that there could be a global milk shortage.
• Agricultural economists say today's milk shortage is basically a case of low supply and high demand worldwide. Supply is down for many reasons. A bad drought in Australia dried up the grass that the country's cows eat. New export taxes were added on Argentina's milk in an attempt to keep the country's food prices under control. Also, European farmers can't significantly increase production until a quota system is phased out eight years from now. The U.S. and Europe always used to have spare dairy products to sell cheaply around the globe, but that's no longer the case, says market expert Erhard Richarts.
• Skim Milk powder (which is easier to transport than fresh milk) is used in a wide range of foodstuffs, and in 2007 its price shot up to record levels worldwide - almost twice as high as the year before. Then retail prices went up, a butter shortage, cheese prices went up, and then wholesale prices went up, and there doesn't seem to be an end to it.

Starbucks:

Strengths.

• Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year.
• It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries.
• 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 as follows, 'Starbucks is committed to a role of environmental leadership in all facets of our business.'

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 with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk.
• The organization is dependant on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.

Opportunities.

• Starbucks are very good at taking advantage of opportunties. In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe 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 the 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 manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

Threats.

• Who knows if the market for coffee will grow and stay in favour 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 copy cat brands that pose potential threats.