Starbucks Opportunities

1. Expansion in developing markets

Starbucks has coffeehouses mainly in the US. Global expansion in emerging
economies such as India, China and few regions of Africa can give a great
opportunity to the company.

2. Business diversification and Products Specifications

It can further diversify its business operations to improve overall revenue growth
opportunities. Besides, developing products as per the customer preferences in the
specific target market is also a profitable opportunity.

3. Introducing new products

As the company is quite popular, introducing new products and holiday flavors
(Peppermint Mocha, Eggnog Latte, Gingerbread Loaf) under its name would be
profitable and welcomed in the markets.

4. Partnerships or alliances with other firms

Co-branding always benefits. Starbucks has the opportunity to develop
partnerships and alliances with major firms. This would strengthen its presence
and market share.

5. Exploit Latest Coffee Trends and Technologies

Although Starbucks is at the forefront of cutting-edge coffee technology, there is
still room for expansion. From best foam technology to snap chilling, back to
black, and RSI-reducing gizmos, there are endless possibilities offered by the latest
coffee trends and technologies.
6. Adopt Price Differentiation
Some coffee houses are growing their customer base rapidly by offering regular
and premium coffee to cater to different classes. Starbucks can offer regular coffee
that is priced lower to capture the middle-class while serving its expensive variety
as premium. 

7. Strengthen Online Channels

The pandemic has discouraged in-store consumption with more coffee drinkers
opting for take-away. Starbucks can strengthen its online sales channels to attract
more customers to pick their coffee curbside or in pickup locations.  

8. Coffee Delivery Service

Currently, customers rely on Uber Eats, Grub hub, and Postmates for its
Starbucks coffee delivery. Starbucks can start its own coffee delivery service for
better customer experience.

9. Coffee Subscription
Panera bread has already started coffee subscription service. Starbucks can also try
new coffee subscription business model to expand its customer base.  
Starbucks Threats
1. Competition with low-cost coffee sellers
Many coffeehouses offer products at an affordable rate. This can threaten the
future’s stability of Starbucks which offers higher prices.

2. Competition with big outlets

Aggressive competition with multinational companies like Dunkin Donuts and
McDonald’s can also pose a threat to its market position.

3. Imitation
Products can be imitated by both new and old rivals.

4. Third-party Delivery Suppliers (union) Strike

Starbucks’ supply chain consists of many third-party contractors and stakeholders,
which makes it difficult to manage the entire chain effectively. In 2019, Starbucks
coffee houses in the Mid-West grappled with shortages after employees of a major
supplier went on strike.

5. Independent coffeehouse movements

There are many sociocultural threats for Starbucks. These sociocultural movements
support small independent and local coffeehouse and oppose the expansion of large
multinational chains.

6. Controversy on California warning rule

A California judge ruled Starbucks and other companies in March 2018 to provide
warning labels on all their coffee products. This was about preventing a violation
from chemical use that may cause cancer.

7. Philadelphia arrests
April 2018, two African-American men were arrested at Starbucks that caused
quite a controversy on social media against Starbucks. Starbucks employees
refused them to use the restroom because they didn’t purchase anything. The CEO
Kevin Johnson issued an apology to both men eventually.

8. Coronavirus
It is expected that pandemic will continue to have significant impact on Starbucks
financials performance due to reduced customer traffic and store hours.

For example, Starbucks had to temporarily close estimated 2000 stores in China

due to the outbreak of coronavirus. Considering Starbucks has 4123 stores in
China, and almost half the stores were closed during the peak of the pandemic.  

9. Change in customer behavior

Experts predict the pandemic will continue changing customer
behavior and tightening discretionary spending. In addition, the decline in the
restaurant industry and other macroeconomic factors can adversely affect
Starbucks’ development plans and operations.

10. Rising Prices of Raw Coffee Beans

The price of raw coffee beans  Arabica, the world’s most produced coffee
(representing over 60% of the world’s production), has increased drastically during
the pandemic due to concerns over its availability, hoarding, and supply chain
disruption. Any additional dollar channeled to purchase raw coffee beans at an
increased price reduces Starbucks’ profitability.  

11. Negotiation with Buffalo workers in favor of unionizing

In December 2021, Starbucks set meetings to negotiate with its Buffalo workers
that voted for unionizing. The company stated that they would talk things out with
the voters in good faith, reaching a mutual understanding. However, Starbucks
made its stance clear in a letter sent to its US workers that it will not back the idea
of unionizing. 

12. Starbucks put on the spot for dietary racism

Dietary racism involves compelling BIPOC communities (Black, Indigenous, and
People of Color) to eat unhealthy foods, offering limited food options at cheaper
costs. According to a publicity stunt by Switch4Good, the prank effectively called
out Starbucks on its tactics