Starbucks SWOT Analysis: Starbucks SWOT Analysis for 2017

BlairThe article was written by Blair Goldenberg, a Financial Analyst at I Know First, and enrolled in a Masters of Finance at Colorado State University.

Starbucks SWOT Analysis


  • Background
  • SWOT Analysis
    • Strengths
    • Weaknesses
    • Opportunities
    • Threats
  • I Know First Past Predictions
  • Forecast



Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. Today it operates 23,768 locations worldwide, including 13,107 (+170) in the United States, 2,204 (+86) in China, 1,418 (-12) in Canada, 1,160 (+2) in Japan and 872 in South Korea, among other countries.

Starbucks stock currently has the Market Capitalization of 78.57 Billion. The Average Volume for the stock is measured as 7.98 Million. The Stock has a 52-Week High of $63.19 and 52-Week Low of $52.59 following the dates, it touched its 52-Week High on Nov 23, 2015 and 52-Week Low on Oct 18, 2016. Currently, the Return on Assets value for the trailing twelve months is 20.6% with the Return on Equity and Return on Investment of 47.2% and 34.1% respectively. This firm currently has YTD (year to date) performance of -9.91 Percent which is not good. The Short Ratio for the stock is 2.19. Starbucks Corporation (NASDAQ:SBUX) Price to Earnings (P/E) ratio is 29.94. EPS or Earning per Share stands at $1.79. The TTM operating margin is 18.8 percent.

SWOT Analysis


  • Consistently Bullish: Starbucks has consistently risen in the market since it’s public debut on June 26, 1992. Last year, Starbucks had its best year since it has been open. Revenue for SBUX grew by roughly 16.5%, profit grew by 33.3%, the debt-to-asset ratio decreased, and SBUX opened 1677 new locations. The Wall Street Journal estimates SBUX average sales of $5,679.93M for their current quarter ending Sep-16. Average Sales Estimate for SBUX is $5,514.80M for the same quarter. Looking at the bigger picture, Starbucks is competing against its massive sales of 2015, which was the most impressive growth in its history. Holiday sales are just starting and there is excessive amount of room to grow for the coffee giant.Starbucks swot
  • Branding: Most people around the world know what Starbucks is or has seen their logo, even in countries where Starbucks doesn’t even exist. Starbucks is a worldwide phenomena and customer loyalty is stronger than it has ever been. Competitors of Starbucks have been around for as long, or longer than Starbucks and the company continues to tower over them.
  • Global Presence: There are 24,000 Starbucks locations in 70 different countries globally. In Chine, Starbucks plans to open 500 stores this year. As of now, China is Starbucks most sought after region with India as a close second. In the past 3 years, Starbucks has only opened 75 locations in India but will increase their scope.


  •  Starbucks premium price: Unless you are stopping by Starbucks to buy a regular cup of coffee, the price can break the bank for a regular customer. For specialty coffee and tea, prices can range from $3-$5.25. On a yearly basis, one regular customer buying the smallest, cheapest specialty drink at $3 can expect to spend about $780 on coffee alone.
  • Market Challenges: Each country has its own culture and lifestyle. Although Starbucks flourishes in Western countries, not all of them greet the chain with open arms. In 2001, Starbucks set its sights on Israel, they opened 6 locations in Tel Aviv, and hired 120 employees to run the stores. Within a year, the decline was so great that future projects, such as opening a store in Jerusalem, were withdrawn and the following year, all 6 locations were closed.


  • Global Presence: As stated above, Starbucks is in 70 different countries currently and hopes to continue expanding its presence in these countries as well as acquiring new places all over the world.
  • Product Expansion In and Out of Their Stores: Every loyal Starbucks customer knows that Starbucks comes out with new flavors of coffee every year. They also rotate their popular flavors during the holidays, like pumpkin spice, gingerbread, peppermint, etc. By now, many people have also been accustomed to seeing Starbucks products outside of their own stores. Starbucks coffee can be bought in retail spaces such as Costco, most grocery stores, Target, and Walmart. They sell Keurig pods as well as their own single cup coffee machine called Verismo.starbucks swot


  • Competition: Starbucks has many competitors such as Coffee Bean and Tea Leaf, with cheaper alternatives like Dunkin Donuts and even McDonald’s. There is a new threat, however. In Israel, Cofix has swept through the country as not only a coffee shop but also a bar and a grocery store. Cofix offers a wide arrange of coffee, fruit drinks and pastries at an insanely low price. In Israel, everything in Cofix, whether it be the bar, the coffee shop or the grocery store, costs ₪5 which equates to be about $1.30. While Cofix has only expanded its reach to Russia recently, Cofix wants to open 100 locations in Russia by mid-2018 and 1,000 locations in Russia within the next five years. Cofix then plans to expand to the United Kingdom. While this may seem like a far stretch into the future, it is a silent threat that may sweep the world.

starbucks swot

  • Competition in Authenticity: Starbucks is a place for a calm, welcoming, and cozy atmosphere. Recently, more consumers come in for the quick and easy access to good coffee. Because of this, new coffee shops are popping up to compete in this area. Starbucks is becoming less of a study spot and more of a quick stop because the authenticity of Starbucks is being spread into the coffee shop market. For example, many Starbucks are opening drive-throughs at their locations, further corroborating the quick, rushed feel that is emerging.

I Know First Past Predictions

The forecast of SBUX on November 1st, 2016 for the next year shows a bullish signal at 275.39, as shown below, the signal strength on the yearly forecast is still bullish

starbucks swot


I Know First is a FinTech company that created an advanced state of the art algorithm based on artificial intelligence and machine learning to foresee market performance for more than 3,000 markets including stock forecasts, world indices, commodities, interest rates, ETFs, and currencies. In essence, the algorithm generates a signal and a predictability indicator. The signal is the number at the center of the box. The predictability is the figure at the bottom of the box. At the top, a particular asset is identified. This format is standardized across all forecasts the results of these predictions are shown on a daily basis on the I Know First website.

I Know First has a bullish forecast on SBUX for the 1-month, 3-month and 1-year forecast.

Explanation about how to read the forecast is further elaborated here.

Starbucks Swot