Swot Mat With Explanation.docx

STRENGTHS 1.Relatively cheaper prices of drinks compared to other milk tea stores

WEAKNESSES 1.New to the Market 2.No marketing strategy employed

2.Stable supply of resources: good relationship with suppliers

3.Limited space

3.Focus to deliver good-quality teas

4.No separation of duties

4.Strategic location of the shop

5.No vision, mission, and objectives for the business

5.Owner supervises the shop 6.Offers healthy food/snacks

6.No separate bank account for the business

7.Financially stable OPPORTUNITIES 1.Philippines’ Tea Segment will amount to $51M by the end of 2019 2.The tea market in the Philippines is expected to grow annually by 6.55 (CAGR 2019-2023)* 3.Iloilo becoming a hub for milk tea industry 4.Gen Z’s increased demand for milk tea 5.Lax competition within the area 6.Trend towards healthy living is increasing 7.Drinking milk tea is now a trend on social media 8.Government is giving out tax discounts for new establishments

SO (S6:O6) Gradual increase of promotions through social media for wider dissemination of information. (S3:O7) Provide quality products and services in order to gain customer loyalty, good customer ratings, and free promotions from customers themselves. (S1-O4) Target the growing market by offering low cost milk tea. (S2:O3:O4) Opt for backward integration to minimize the raw materials expenses and to maintain the costleadership strategy. (S6:O8) Maximize the government's tax discount by expanding business operations to reach wider target market (S4:S7:O4) Expand business by strategically branching out near the target market. (S6:O6) Heighten the competitive advantage of the business by highlighting its healthy milk tea and snack options. (S2:O3) Ensure good supplier relationship for stability of resources.

WO (W1:O8) Invest more on development of products and services while it is still relatively not costly. (W1:O4) Provide something "new" or "fresh" for the target market to entice them and secure customer retention. (W2:O7) Capitalize on people's positive word of mouth by asking them to post their Dragon Pearl experience on social media (W2:O5) Establish a good reputation and make the consumers patrionize the products by soffering healthier, cheaper and palatable food,snacks, and beverages. (W3:O7) Owner can exhort creativity on their limited space by making it as aesthetic as possible. (W2:O6) Marketing strategies should be incorporated to inform target market of their product offerings.

THREATS 1.Low barrier to new entrants 9 2.Inflation rate is at 3.8% 3.Commercial property beside Dragon Pearl are up for rent 4.Substitute products surround Dragon Pearl 5.Newly implemented tax reforms

ST (S1:T4:T7) Continue targeting the price sensitive consumers such as students and workers and continue being the cost-leader through offering milk tea in a lesser price. (S7:T3) Rent the commercial space beside them to be able to accommodate more customers and mitigate threat of having geographically close competitors.

6.Competitor’s promotions on social media are trending 7.Competitors released new milk tea flavor

WT (W1:T5) Develop promotional ads, pubs and set promos. (W3:T3) Lease on another establishments which has lesser rent compared to the present within the vicinity to maximize the strategic location. (W4:T2) Employ part time workers who are in need of extra income to increase work force. (W2:T6) Battle out social media campaigns by people's free positive word of mouth. (W3:T3:T4) Widen space by renting out the commercial spaces besides the establishment to box out other competitors. (W6:T1) Maximize the ease of processing and set up an independent bank account for the business.

SWOT Matrix is a matching tool that helps the managers develops strategies for the betterment of the company. By matching the strengths and opportunities, the company use strategies that maximize the opportunities by using its internal strengths. Meanwhile, WO Strategies use firm’s external opportunities to eradicate its weaknesses. ST strategies use the firm’s strengths to avoid or reduce the impact of external threats and lastly, WT strategies are defensive tactics to reduce weakness and threats. Dragon Pearl offers heathier milk tea, dumplings and pancakes, with the increasing trend towards milk tea; the shop should promote and heighten their competitive advantage by gradual increase in promotions in social media. By taking advantages of the opportunities in milk tea industry, it is recommended that the shop will have a good relationship with supplier to maintain the low-cost of raw materials or adapt the backward integration buy buying the

supplier, in this situation, since the raw materials will be directly transact by the owner, it will minimize the cost of the ingredients. In addition, the shop should provide quality-products with low-cost to gain loyal customers, to get good ratings, and to get free promotions from their customers themselves. The government has granted tax discounts on building establishments, this opportunity is to be taken advantage to reach wider target market. In addition, qualitatively, the shop is financially stable; financial statements are not disclosed but they are doing well in terms of financial because they have managed to branch out in less than a year. With this internal strength, the shop may branch-out near the other target markets. By taking advantage of the opportunities to minimize its weaknesses, the shop may invest more funds to research and development of the product. This initiative may provide something new to the customers. In regards with the limited space of the shop, the owner may design it as aesthetic as possible. In addition, the shop may establish its Brand to its niche market and use the people’s positive word of mouth to disseminate its new product offerings. To reduce the impact of the threats to the shop, Dragon Pearl may continue to offer lowcost but good food to the students and workers. In addition, maintain being the cost-leader in milk-tea industry in Iloilo. Moreover, in order to minimize potential competitors, be the firstmover and lease-out other establishments within the vicinity. As defensive strategies, Dragon Pearl may employ part-timers to increase workers. In this move, the staff will have their own delegation of works. And to solve the limited space issue, the shop may widen the space by leasing out the other stalls beside the current location of the business. To have a good accounting practice and to easily track the transactions of the business, it is advisable to have a separate account exclusively for the shop’s cash flow. In addition, in order to gain more buyers, the company may invest more money on promotion or hire marketing strategists to battle out in social media.