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Starbucks on the international market
Starbucks global strategy
Starbucks global strategy
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5). In October of the same year Starbucks entered New Zeland. The company had a franchisee for KFC and Pizza Hut, to open retail stores in the country (The Seattle Times, 1998, para. 2). Then Starbucks took the market of Taiwan, Thailand, Malaysia. In 1999 the brand extended to China, South Korea and Lebanon. The next year it added 7 more countries, then 3 more in 2001, and then 9 more in 2002. After that Starbucks started just filling the gaps in the cities of those countries, and add the new ones to the list of its global marketing.
Being loyal to the basic values of the brand, Starbucks understands the need of cultural adaptation. Many countries can 't share the same taste due to cultural views. In this way, an opportunity to have an iced coffee
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This makes company to have a lower share of profits. But at the same time it allows Starbucks to have its business at different markets (Catora&Graham, 2007, p.596).
According to Kathy Lindermann, SVP of operations for Starbucks International, the local partnerships focus comes first, country second. The firms that can be a potential partners should share the views Starbucks has, has commitment to have a long-lasting relations; Starbucks prefers partners with multi-units restaurant experience, good financial situation, knowledge of picking up the best location and retail market, and with strong relationships with professional people to invite to take part in the partnership.
Among all Starbucks stores worldwide employees are treated as partners of the company. The company understands that each store is the best advertisement for the brand, so Starbucks focuses on the quality of skills of their workers. All over the world people can feel special during their Starbucks coffee experience as they will receive warm reception at any of the stores, as well as a personalized cup with the customer 's name of it.
When starbucks enter the Australian market in 2000, It was successful. Starbucks targeted the capital cities before going into regional centers. The reason is simple, as demand for pricey coffee is higher in the capital cities, and during that time less competition are expected. Starbucks became the leading and competitive company in the coffee chains globally. By 2007, Starbucks has opened more than 84 company-operated stores across the country. It was until mid 2008, that Starbucks realise its peak of success has ended in the Australian market.
With that store being there to help support new stores that would be entering the region. The goal was to have around 20 stores after two years of entering a market and have those stores expand even further into smaller cities and suburban locations. They also started to add drive-through because it made it more convenient for parents with small children. Some of the drawbacks of drive-through were that it took away from impulse buys and sometimes created bottlenecks in the line. Licensing the brand was also a great way that they expanded their business; by putting Starbucks in airports in malls they create a lot of foot traffic lead to successful stores. Starbucks carefully considered their image and the image they wanted to uphold when choosing licensees. The international market is now where Starbucks has the most potential to grow. As of right now Starbucks has plans to open 1,400 new stores in China. That’s more than half of the store it already has in China. The growth technique that I was most impressed with was that having two locations so close to each other would not saturate the market. The first store would see a drop in sales at first but would bounce back and the new store would grow. I notice we have that here, at Target in uptown you can actually see the Starbucks across the street while you are in line. Both seem pretty busy most of the time too.
Starbucks is one of the most recognizable and successful coffee brands in the world. Starbucks believes in serving the best coffee possible. Starbucks’ international market that was expanded into China in 2002, still has only a tiny part of the Chinese beverage market (Harrison et al., 2005). The company President, Charles Shultz is ascertaining the possibility of establishing new coffee houses in China.
Starbucks recognizes its employees for much of its success. This is due mostly to maintenance of a great and proven work environment for all employees. The company does not have a formal organizational chart; sot employees are permitted by management to make decisions without a management referral. Moreover, management trust and stands behind the decision of the employees and it is this that allows for employees to thinks for themselves as a part of the business, so as to make them feel as a true asset and not as just another employee.
Emphasis on quality, Starbucks Experience, brand image, and important suppliers to dispute lower price contributions to competitors hence increasing profits
...nal locations in the heaviest coffee drinking countries. This has to be done quickly as to get the jump on other that may also be considering this type of a move. At the same time they should be selling franchise right for the coffee carts. This will provide an increased cash flow as well. During all of this Starbucks should be looking at coffee producers who are in financial trouble or are looking at selling their farms. This has to be done discretely as not to cause unnecessary bad press. After they run a couple of these coffee producing farms for a few years they should be able to see how the whole operation works and determine its viability. Once it’s proven viable they should send out simultaneous offers to the biggest producers as to catch them and other coffee companies off guard. Starbucks also should be getting into the bottled Frappuccino as soon as possible. They should leave the introduction of the product up to Pepsi because of their past experience. They should leave their entry into the grocery store market until some of these other strategies are implemented. This will prove to be the best strategy for Starbucks being able to reach their long-term gaol.
Business Environment – The firm is considered a coffee giant company that is a big brand in the business being able to expand aggressively in the market worldwide before it entered in New Zealand. But the business environment of this country is quite unimaginable for a US based company for it to venture without having a thorough marketing analysis covering all the risks in the venture considering the distance and the traditions which differs a lot in many countries thus making it very unique and incomparable. It is only when the company is able to come up with the correct strategy in entering the business that will make it thriving. Starbucks New Zealand entered the Kiwi market by way of franchise and joint ventures. They partnered with a very stable local business partner called The Restaurant Brands New Zealand Ltd. In this case, the company is able to hurdle the market barriers including business laws, taxation, physical set up, traditional and cultural differences that may come along the way. (Starbucks, 2012)
Starbucks continued its expansion throughout the late 1980 and beyond. In 1991, Starbucks became the first privately owned U.S. Corporation to offer stock options to part time employees (Starbucks timeline and history, 2004). In the early 1990s Starbucks started setting up coffee shops in Nordstrom¡¦s department stores, Barnes & Noble bookstores and ITT/Sheraton hotels. In 1995, the corporation began selling compact discs and formed an alliance with the Canadian bookstore, Chapters Inc.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
The Starbucks Corporation is built around an experience, the Starbucks experience. While the Starbucks experience is most notably associated with the way customers are treated, one could argue however, that the Starbucks experience transcends just the way customers are treated. The Starbucks experience is an all encompassing culture that revolves not just around customers but also to employees, or “partners” and suppliers. Burks (2009) notes that the company cares about the footprint it leaves, no matter where it does business; “the company is dedicated to making positive contributions to the communities where it doe...
This paper will provide an argument for diversification to be presented to board of directors for Starbucks. A strategy for diversification indicating the products and industries for diversification and how synergies may be gained will be provided. The identification and the discussion of the foreign market Starbucks should enter will be presented, along with the strategy it should use to enter the market. Challenges Starbucks may face in the foreign market will be discussed, as well how it might respond strategically to minimize the impact of these challenges.
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
Since it was its first foray internationally, their approach was to rely on local partnership to get everything up and working. Therefore, Starbucks formed a 50:50 joint venture - called Starbucks Coffee Japan Ltd with Sazaby, a major Japanese retailer and restaurateur. This alliance combined two major lifestyle companies that would provide the Japanese consumers a new and unique specialty coffee experience. Starbucks Coffee Japan was formed with capital of $1.5 million,
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded