starbucks swot analysis

Starbucks SWOT Analysis: A Detailed Assessment 

Jerry Baldwin, Gordon Bowker, and Zev Siegl founded Starbucks in 1971, which used to sell high-quality coffee beans in its initial years. It wasn’t until 1987 that the company embarked on its journey to rule the coffeehouse industry under Howard Schultz. 

This detailed Starbucks SWOT analysis provides useful insights into the factors driving the brand’s growth and those presenting potential obstacles, as well as opportunities.

Starbucks SWOT Analysis

Here’s a comprehensive breakdown of Starbucks’ strengths, weaknesses, opportunities, and threats. 


There isn’t one but many factors behind the roaring success of this United States-based coffeehouse brand.  

Global Brand Recognition

Strong brand recognition on the global level is undoubtedly the biggest strength of the Starbucks Corporation. Its journey from a small coffee bean retailer in Seattle’s Pike Place Market to leading the coffeehouse industry is truly impressive. 

Starbucks is operational at over 38,000 locations as of 2023, courtesy of its rapid and strategic expansion. Its first-ever international store opened in Tokyo in 1996, followed by the UK in 1998, Mexico City in 2002, and so on. 

But what made Starbucks receive such a rousing welcome from coffee lovers around the globe? 

One main reason behind this is that Starbucks isn’t just known for its rich, bold, and aromatic coffees but for the customer experience it sells. It changed how the world drank specialty coffee by offering a cozy spot between home and work where people can unwind with a freshly brewed cup in a welcoming atmosphere. 

This also helped the company bag the #1 spot on the Fortune World’s Most Admired Companies list in the Food Services industry and #14 overall–out of 645 companies. 

Innovative Product Offerings

Another area where Starbucks excels is its product diversification to cater to even non-coffee lovers. It offers a vast range of exceptional products that coffee and non-coffee drinkers enjoy in their luxury stores, at home, and on the go.  

Besides 30+ blends and single-origin premium coffee, its product range comprises other handcrafted beverages, ready-to-drink BAYA energy drink, fresh food, merchandise (like new paper cups with various festive designs), and more. 

In January 2008, Starbucks launched its “skinny” line of drinks with low-calorie content and no sugar. You’ll even find premium lunch and dinner menus at many Starbucks stores. All this innovation in its product offerings has, thus, helped the company overcome the stiff competition in the ever-evolving coffee space. 

Commitment to Sustainability

Sustainability has always been a priority of Starbucks, and its partnership with Conservation International to develop buying guidelines for ethical coffee sourcing is a testament to that. 

Besides, Starbucks affirms its commitment to solidifying a pathway to a planet-positive future by 2030. It vows to give more than we take from the planet by focusing on major areas, such as expanding its plant-based food menu, shifting to reusable packaging, managing waste generation, improving the supply chain, and innovating more responsible stores. 

Starbucks currently operates over 1,500 LEED-certified stores in 20+ countries, offering its customers sustainable, healthy spaces optimized for the enjoyment of coffee year-round. 

Extensive Global Presence

Another strength of Starbucks lies in its extensive global presence. With 32,000+ stores in 80 countries, Starbucks Corporation takes pride in being the premier roaster and retailer of specialty coffee in the world. 

With 16,346 outlets, the United States leads the way in having the most Starbucks stores as per Statista, followed by Mainland China with as many as 6,804 stores, Korea (1870), Japan (1,733), and Canada (1,458). 

It’s important to note that, unlike other brands like McDonald’s and Burger King, Starbucks doesn’t follow an aggressive franchise-heavy business model. It rather favors company-owned stores, primarily to maintain a certain level of quality control over them. 

This is what the CEO of Starbucks, Howard Schultz, wrote in his book “Pour Your Heart Into It,” opposing the franchise-based business model: 

“To me, franchisees are middlemen who would stand between us and our customer… If we had franchised [as some executives wanted to in the 1980s], Starbucks would have lost the common culture that made us strong. We teach baristas not only how to handle the coffee properly but also how to impart to customers our passion for our products. They understand the vision and value system of the company, which is seldom the case when someone else’s employees are serving Starbucks coffee.”

Source: Business Insider

Loyal Customer Base

Starbucks Corporation also benefits from its strong and loyal customer base, with which it shares an emotional bond. 

People visiting Starbucks baristas keep returning for the familiar taste of their favorite coffee, a cozy atmosphere with hotel-like amenities, and consistent quality. They trust the brand to deliver on its promises, whether it’s a morning pick-me-up or a place to unwind with friends. 

This loyal following provides the premium coffee shop with a steady revenue stream, even during economic downturns or amidst competition. Furthermore, these customers often spread positive word-of-mouth recommendations, further solidifying Starbucks’ position in the market. 

Even the staff at Starbucks is trained to engage with customers in meaningful and friendly ways, including greeting them by name to make them feel special.

By nurturing this loyal customer base, Starbucks can rely on a stable foundation for continued growth and success in the highly competitive coffee market. 


Starbucks must overcome its following weaknesses to continue its growth trajectory, no matter what. 

Dependence On Coffee As A Primary Product

According to the journal PLOS One, the world’s agricultural production for coffee, cashews, and avocados will look very different than it looks now. 

But out of these three crops, coffee will be hit the hardest due to climate change, with a significant decline in regions where it could grow by 2050. That’s why Starbucks’ over-dependency on coffee as a primary product doesn’t seem good and translates to a weakness it must overcome as early as possible. 

Any drop in coffee production or shift in its customers’ taste buds will affect not only Starbucks’ coffee demand but also its revenue. 

Intense Competition In The Coffee Industry

Coffee is one of the most consumed beverages around the world, after the likes of water and tea. As a result, stiff competition has brewed up for Starbucks over the years, both at home and abroad. 

New coffeehouse chains are not only trying to replicate Starbucks’ exclusive beverage menu but also its iconic “third place” concept. Some examples include McDonald’s McCafe, Tim Horton, Costa Coffee, and Caffe Bene. 

Mikel Coffee Company is another great example of the intense competition in the coffee industry. It’s a Greece-based coffeehouse chain with a portfolio of a whopping 130 beverages and premium stores, staffed by well-trained associates to deliver top-notch customer experience.

Apart from the aforementioned specialty coffee chains, Starbucks also faces good competition from restaurants, whose strategies are disruptive from the price perspective. 

Limited Expansion In Certain International Markets

Starbucks Corporation, despite being in service since 1971, has managed to set up its operations in just 86 countries. Yes, you read it correctly. 

Most of its stores are still concentrated at home and in China, with the highly populated Asia-Pacific region yet to be fully explored. This leaves Starbucks with ample scope to expand its market share and exert its dominance as a leader of the global coffeehouse chain. 

But there’s much more to this. One major obstacle Starbucks faces in developing countries is its high coffee prices. Although they align with the product quality and experience the company sells, such high prices are not justified at the customer’s end.

Besides, Starbucks’ non-localized food menu is another barrier to its expansion to developing nations. 


To keep its growth trajectory intact in the global coffee market, which is expected to expand at a CAGR of 5.2% till 2030, Starbucks must capitalize on the following opportunities. 

Expansion into Emerging Markets

Expansion into other emerging markets, apart from the US and China, is probably one of the biggest external opportunities Starbucks should capitalize on. 

Countries like Canada, Japan, India, Latin America, and the United Kingdom boast a decent population of coffee lovers and, thus, can help the coffeehouse chain to scale new heights. 

Of course, several challenges will cross its path, like local preferences, cultural differences, and regulatory frameworks. Still, a revamped business strategy and constant supply chain can help it overcome these rough waters. This will also help fulfill Starbucks’ aim to increase its store footprint to 55,000 by 2030. 

Diversification of Product Line

Starbucks stands out from the crowd through its distinct product innovations. 

Despite having a reputation as a coffeehouse, it constantly tries to introduce its customers to various non-coffee beverages whenever they visit their nearby Starbucks store. Its smoothies, juices, fruit-based refreshers, milk-based drinks, and range of sparkling waters are, thus, a huge hit among its customer base. 

However, it’s high time for Starbucks Corporation to lower its reliance on coffee and further diversify its product line to cater to a new market. 

Leveraging Digital Platforms for Sales and Engagement

Leveraging digital platforms in today’s modern world is the best way to connect with the masses, and for a global brand like Starbucks, this is a big opportunity. They can use their website and mobile app to let people order drinks and food easily.  

Starbucks can promote new products, share stories, and digitally interact with customers, like running their specialty Starbucks Rewards program. This program rewards loyal customers with free drinks, discounts, and special offers. 

By using digital platforms smartly, especially social media, Starbucks can make it easier for people to buy from them and build stronger relationships with their customers. It’s a win-win for everyone involved. Isn’t it? 


Starbucks’ business model faces threats from both external and internal factors, as discussed below. 

Fluctuations in Coffee Bean Prices

Coffee bean prices are dynamic in nature and are constantly influenced by increasing global demand for coffee, an unstable global supply chain, high labor and production costs, and other economic factors. 

These coffee beans being the lifeblood of Starbucks, any variation in their prices poses a significant threat to their economic well-being. This calls for a hedged supply chain for short-term volatility. If not, the brand will be left with no option but to pass on the elevated coffee prices to its customers. 

Even if Starbucks’ strategic management succeeds in handling this fluctuation in coffee bean prices, the next immediate risk it must deal with is the altering weather conditions due to global warming. 

Starbucks must brace itself for these scenarios and take appropriate action to stay alive in the long run. 

Changing Consumer Preferences

When you crave something sweet and tasty to drink, Starbucks has got you covered. Its menu has a rich collection of caffeinated and decaffeinated drinks for everyone and every craving. There are some healthy options, too. 

But the majority of the Starbucks menu is known for its unhealthy beverages, which contain more calories and sugar in them than you realize. Take the example of everyone’s favorite Salted Caramel Mocha, Pumpkin Spice Frappuccino, Pumpkin Spice Latte, etc. 

With people becoming more conscious of their health and seeking drinks with lower calories and high nutritional values, Starbucks must align its offerings with these healthy consumers’ preferences to stay ahead of the curve. 

Regulatory Challenges in International Markets

While we discussed the urgent need for Starbucks to tap into the international market to expand its foothold, the associated regulatory challenges are no less than a threat. 

Starbucks must adhere to these rules and regulations to avoid penalties and legal actions. But this isn’t as easy as it appears. These norms apply to various aspects of the business, for example, pricing, distribution, health, safety, and more.

This is where Starbucks can try the licensing and joint venture (like it did in Japan with Sazaby League Ltd.) routes to partner with local coffeehouse chains. Doing so will help the brand navigate the regulatory framework of international markets with ease.


The 53-year-old Starbucks coffee chain remains a formidable force in the coffee industry, leveraging its strengths in brand recognition, global presence, and product diversification. 

However, it must address weaknesses such as high dependence on coffee as the primary product, supply chain issues, growing competition, and changing consumer preferences to sustain its growth trajectory in the long run.

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