Opportunities

1. Expansion into Emerging Markets – The self-cannibalization of the

US market, indicates how important it is for Starbucks to expand the
brand, internationally. Starbucks had already started the process (the
latest country that joined the list was, India) and they have great growth
potential in the emerging and developing markets.

2. Expanding Product Mix and Offerings – Lately, Starbucks started to

expand its mix by adding Tea and fresh juice products. Though, they
still have a lot of room left.

3. Technological Advances – Starbucks has leveraged the use of mobile

applications. The “Starbucks App” provides reward programs and
creates a friendly, comfortable environment for the customers. Today,
10% of transactions in the US are being made through mobile apps
and Starbucks App will surely be effective.

4. New Way of Distribution – Starbucks introduced a new delivery

system called “Mobile Pour”. This is a great opportunity to improve
their distribution system and drive more revenue.

5. Expansion in Asia, the Middle East, and Africa – Starbucks just

opened its 1,600th store in China. It’s essential to use this popularity
and expand in the Middle East and Africa, where the company currently
has minimal presence.

Starbucks has the opportunity to expand in the Middle East and Africa, where the firm currently
has minimal presence. The company also has the opportunity to expand in Asia, where
economic growth rates are high. In addition, even though Starbucks already has a considerably
diverse product mix, further diversification can help improve its competitive advantage.
Partnerships and alliances can also strengthen Starbucks Coffee’s competitive position. This
part of the SWOT analysis shows that Starbucks has major opportunities for global growth.
Starbucks has a significant opportunity before it in the form of the large and
untapped emerging markets. Markets like India and China can prove important
sources of customers and revenue. However, Starbucks should also try to align its
products as per the cultural standards of these markets. Diversifying its product line
can also help the brand grow and improve its brand value. Currently, the brand is
mainly known for its premium quality coffee. It can add other products including
beverages and snacks to its product line to provide its customers with variety.  Its
assortment of products is limited.

Another major area of opportunity for the Starbucks brand exists in the form of cobranding or
partnership. The brand can partner with snack brands or regional stores to sell its own products.
Imagine someone having a big fat burger with coffee. Coffee tastes better with snacks. Such
partnerships can help Starbucks improve its brand presence and get closer to its customers. It
will find a huge source of revenue by tapping into the customer base of the partner brands in
this way. Apart from that it could sell its coffee through local stores or the big retailers as well.
Such strategic partnerships will not only increase its customer baser but also improve its brand
awareness.

Threats
1. Increased Competition – This is by far the biggest threat for
Starbucks. Dunkin’ Donuts and McDonald’s are the companies, trying
the minimize Starbucks’ market share and they have already shrink it by
26%.

2. The Price of Coffee Beans – Lately, there have been talks that the
price of quality coffee beans might increase. And if this happens, the
overpriced Starbucks coffee will get even more pricey.

3. Economy of the Developed Country – If a crisis like 2008 somehow

repeats, it will severely damage Starbucks revenue. Moreover, the
company will lose a significant amount of customers because they’ll
shift to cheaper brands.
4. Change of Lifestyle and Preferences – The shift of customers toward
healthier products and the risk of coffee culture vanishing, represents a
future threat for Starbucks.

5. Brand Imitation – If big brands like McDonald’s and Dunkin’ Donuts

decide to imitate the brand strategy of Starbucks and introduce the same
product they have, with lower prices, will definitely harm the company.

The Starbucks brand is facing heavy competition from its rivals.

Particularly, it is the smaller competitors whose products are available at
much lower prices that pose a major threat. The lower end consumers
are attracted towards the rivals for the lower costs of their products. The
changing consumer trends have also affected its business to a small
extent. The people are looking for healthier products. The sales of juices
and other healthy drinks has gone up. While Coffee is not considered an
unhealthy drink, still its sales are slightly affected. Another major threat
comes from the imitation of the products. Starbucks sells premium
quality products. However, they are not inimitable. The rival brands
make the same products available at lower costs. It increases the
competitive threat for Starbucks.