...STARBUCKS AS AN INTERNATIONAL BUSINESS 3 Abstract The researcher examines a detailed synopsis of the specialty coffee industry and the role that Starbucks plays in it. Starbucks is in a growth market, and it has a good relative overall position. The researcher will examine the business structure of Starbucks and the future implications of its current business strategies. By examining the strategic imperatives such as how to expand abroad and understanding the international context, the researcher will determine strong and weak business strategies of the company. Starbucks has overcome organizational and managerial implications that will serve as a strong model for international businesses. The researcher will then give strategy and implementation recommendations on how Starbucks can grow as an international business. STARBUCKS AS AN INTERNATIONAL BUSINESS 4 An Analysis of Starbucks as a Company and an International Business Introduction Millions of people all over the world walk into Starbucks every day for their cup of coffee, but it is more than the overpriced coffee that brings people in day after day to the Starbucks stores across the world. Starbucks offers an upbeat environment and friendly and helpful staff to assist customers in any question or problem they might have with the coffee or service. People buy Starbucks for what it represents and the status symbol that comes along with it. Although various business...
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...Position History Starbucks was started in 1971 in Seattle’s Pike Place Market. Today, Starbucks operates in over 50 countries around the world, and they have more than 15,000 stores. Since 1971, Starbucks has continued to build themselves bigger and bigger, and as a result they are the largest and most well-known coffee shop in the world. Starbucks really started to take off after their current CEO, president, and Chairman Howard Schulz bought Starbucks in 1987. He was determined to make Starbucks into a “place for conversation and community”, and he strived to make Starbucks more similar to coffee shops that he visited in Italy, by making there be more of a friendly and inviting atmosphere. (Starbucks.com) Starbucks Today Starbucks, because of one of Schulz’s intiatives, has been doing better than Wall Street expected them to do, and this has mainly been because Starbucks has been cutting its costs where it can and closed 676 stores in the United States. (Steverman) In addition to closing down stores, Schulz has also been striving to get in better touch with Starbucks’s mission. Starbucks’ mission is: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Starbucks.com) Many people felt that Starbucks had begun to lose its personal feel, so Schulz has been working to increase customer satisfaction by improving beverage taste, the speed of service provided, and the friendliness of Starbucks employees. (Steverman) While there...
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...SWOT Analysis: Starbucks Hawaii Pacific University Jennifer Rocha Abstract Starbucks Corporation, is a retail super chain whose specialty is selling a variety of hot and cold coffee. In addition to its retail coffee, Starbucks sells coffee brewing machines, tea, merchandise and hot and cold food items. The store began in 1971 with a single store in Seattle and has expanded to 23,305 stores in 65 countries and territories, including 13,049 in the United States, 1,909 in China, 1,555 in Canada, 1,089 in Japan and 927 in the United Kingdom (Wikipedia 2014). Howard Schultz, Chairman, Executive and Chief Executive Officer, has been at the helm of this coffee supergiant since 1987. Mr. Schultz is the dreamer behind the “place for conversation and community” experience that Starbucks provides (Starbucks Heritage, n.d.). Although Starbuck’s is a global corporation, it primarily operates out of its United States headquarters located in Seattle, Washington. Below I will provide a Strengths, Weakness, Opportunity and Threat (SWOT) analysis of Starbucks from a managerial perspective. SWOT Analysis: Starbucks Starbuck’s management team has done a phenomenal job of ensuring that they dominate the domestic and international coffee retail markets. The company’s global presence is one of their strongest attributes. It could be argued that morning commuters, soccer moms and college students across the globe wouldn’t be able to get through their days without...
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...Introduction Starbucks is the biggest coffeehouse multinational corporation in the world. This corporation started out as a retailer solely of whole bean coffees. On a trip to Italy in 1983, Mr. Howard Schultz, an employee of Starbucks, was inspired by the numerous coffee bars in Milan. Upon his return to Starbucks he presented the idea to expand the company into a coffee bar. Mr. Schultz’s idea was rejected, and he parted from the company to start his own coffee bar. After years of great success he purchased Starbucks name and all of its assets. Their coffee service system was built on three principles, which were: hospitality, education, and production. The company is now considered “a premier roaster and retailer of specialty coffee, and operates in more than 50 countries through its company-owned stores as well as licensed retail stores” (Datamonitor, 2011 p. 4). Through a SWOTT analysis, we will see some highs as well as lows of Starbuck along its journey of being a Fortune 500 company. Strengths Diverse product portfolio Knowledgeable employees Brand Image and presence in other distribution channels Customer bond through value-added services Opportunities Entry into the health food market Emerging international retail markets Expanding in the single-serve coffee market Weaknesses High sales costs Weakening US segment Brand image affected recalls Threats Competition Rising prices of supplies and commodity Economic state of US ...
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...Why Starbucks succeeds in China and others haven't By Shaun Rein, CNBC.com Contributor Updated 2/10/2012 3:03 PM • Comments • • • • [pic] • [pic] • [pic] About 14 years ago, I met an entrepreneur who wanted to open up coffee shops around China. I never thought the coffee business would work there. The Chinese would not easily give up their tea-drinking culture for a bitter, overpriced drink, I told him. • [pic] By Greg Baker, AP A worker cleans the sign outside one of the many Starbucks outlets in Beijing. Enlarge By Greg Baker, AP A worker cleans the sign outside one of the many Starbucks outlets in Beijing. Sponsored Links Starbucks has proven me wrong. Howard Schultz, the CEO of Starbucks (SBUX), announced that China will soon become its largest market outside the United States. It has opened over 500 outlets in the country, which are more profitable per outlet than in the U.S. even though sales per outlet lags its U.S. counterparts considerably, according to the chain's chief financial officer, Troy Alstead. What did Starbucks do to succeed in a market where so many other Western food and beverage brands such asDunkin Donuts, Krispy Kreme, and Burger King have failed to live up to their own expectations? What Starbucks did right in China is a textbook case study in how food brands can succeed despite rising labor and real estate costs and increased competition on the Mainland. • PHOTOS: 10 fake businesses...
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...1/ Internal Analysis Vision To provide exceptional coffee world-wide by maintaining excellence, embracing diversity, contributing positively to communities and the environment, and pursuing profitability. (Farfan 2010, http://retailindustry.about.com/od/retailbestpractices/ig/Company-MissionStatements/Starbucks-Coffee-Mission-Statement.htm) Strengths Strong Brand: Global presence: Starbucks are currently the largest chain in the coffeehouse industry. Operating with more than 20,000 stores in 62 countries gives the company a strong presence in the industry, arguably ahead of its competitors. Consistent messaging: Starbucks consistently communicates its vision as a ‘Third Place’ between home and work place through its communications, product and store development, and customer service. This coordinated effort has built Starbucks not only as a powerful brand for coffee, but also the coffee experience that extends beyond the coffee and cafe. Unique value proposition: By positioning itself as the ‘Third Place’ and offering a ‘coffee experience’, it also provides a somewhat unique value proposition to customers. Engaging and personalized communication and marketing: My Starbucks Idea – Starbucks’ own version of a social network where customers are asked to share their ideas. The brand has created a digital dialogue with its customers, enabling people to give their feedback and receive a response back from Starbucks addressing their concerns/comments. It also has over 705...
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...How to do business in china With a Solid economic expansion, coupled with a rapid market transformation and a series of government reforms, mean China the world's second-largest economy is no longer just a country for low-cost manufacturing. It is also an increasingly attractive destination to do business. Several western companies including global giants such as Starbucks, Volkswagen, Boeing and Procter & Gamble have established a presence in the country. But despite China's increasing influence, challenges remain for those looking to do business in the country. Intense competition, corruption, business etiquette and language are some of the barriers that can be faced. In a first time we’re going to talk about a few keys of success of doing business in china, and then we will take the example of Starbucks and his adaptation on the Chinese market. Here are five things we should know before doing business in China: A mosaic of markets China is the world's most populous nation, with its sprawling 1.3 billion people making up a highly diverse market. There is no single consumer profile, and analysts suggest companies remain flexible and innovative, while understanding how their company would fit in each specific market. There's no simple answer in China it depends so much upon the specific market and upon the specific characteristic of your own company. Operating in a country with a history of thousands of years and ways of doing business that go back as...
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...Starbucks: Delivering Customer Service Case Study, BEP 430 Marketing 20030059 Dong-ock Kim1, 20030071 Min-geuk Kim2, 20040054 Keehyung Kim3, 20040535 Yohan Jo4, 20076006 Huang Qiuling5, 20076035 Dorjsuren Bayarmaa6 Marketing Team A1 2 3 4 5 6 erst_licht99@hotmail.com1, kmg0702@hanmail.net2, keehyoung@gmail.com3, zukjimote@gmail.com4, sharlin_huangqiuling@hotmail.com5, gordok_88@yahoo.com6 Professor: Wonjoon Kim Date submitted: May 7, 2007 TO: Day, vice president of administration in North America, Starbucks FROM: Dong-ock Kim, Min-geuk Kim, Keehyung Kim, Yohan Jo, Huang, Qiuling, Dorjsuren Bayarmaa RE: Starbucks: Delivering Customer Service DATE: May 7, 2007 Market Analysis Starbucks provides the highest-quality coffee what it believes in the world. It has hundreds of product lines and the sales of beverage take the largest percent. Despite of Starbucks’ overwhelming presence and convenience, customers think there was just a little of image and product differentiation between Starbucks and the smaller coffee chains. However, Starbucks has an uncomplicated distribution strategy, and it tries to make customers get entrance to Starbucks products easier and provide more convenience to customers. Moreover, it has company-operated stores located in hightraffic and high-visibility and non-company retail channels. In addition, Starbucks has four major competitors. Minneapolis-based Caribou Coffee which provides the look and feel of an Alaskan lodge has more than 200 stores...
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...Introduction The coffee industry is a multi-billion dollar industry which is getting bigger and bigger each year. Coffee is a huge industry and is the second most traded product in the world after oil. Even though there is an economic crisis going on in many countries, there strong demand for coffee keeps rising. All the major companies including Starbucks are repeatedly raising prices and consumers are spending as normal. Starbucks is an international coffee chain and is the largest such company in the world. The industry that Starbucks can be placed in is within the speciality coffee industry. Starbucks total net revenues went up to $3.032 billion, up 15% on last year. As of January 2nd 2011, they have 17,009 stores worldwide operating in more than 50 different countries. Their products include coffee, hand crafted beverages, merchandise and fresh food. Within the speciality coffee industry there are many companies. Some of Starbucks competitors include 7-Eleven, Dunkin Donuts, Caribou Coffee and McDonalds which are all USA based. In the UK Starbucks main competitors would be Costa Coffee, Café Nero and McDonalds. On top of these big competitors there are countless small independently owned coffee shops. Competitors like 7-Eleven, Dunkin Donuts and McDonalds offer coffee at relatively low prices. These chains simply just sell coffee to customers who want it on the go whereas at Starbucks it’s mainly about the whole ‘Starbucks experience’ as well as the coffee. These establishments...
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...Fig 1. The Modern Coffee Shop Marketplace A relatively mature market with fierce competition. The focus is on increasing Marketshare, mainly through outlet expansion, Premiumisation of products to Differentiate and increase prices to influence the average spend per visit; along with NPD and creating new channels to new markets, i.e. PRC. Specialists add value through their expertise and dramatic show of Barista skills. Brand Loyalty is low, with consumers under pressure due to static wages/rising prices. To offset, retailers offer miniatures/vending, improved convenience and create new occasions to visit stores. Fig 2. Porter’s Generic Strategies (1980) – Strategies to increase marketshare (outlet expansion) & loyalty Differentiation * | Premiumisation of products/services to differentiate & charge higher prices - Increasing spend per visit by consumer-driven N.P.D | Focus | A niche market strategy is not suitable; focus is on mass market & intense penetration with diversification of products/services | Cost Leadership | Low prices is not congruent to the Brand Values of Starbuck’s - Premium price for high quality products & customer service/experience | Fig 3. Porter’s 5 Forces - Market Attractiveness – 60% of consumers have not altered coffee habits in recession Competitive Rivalry Mature & Fierce * Branded coffee shops focus on premiumisation & quality of services - Barista expertise to emphasise their ‘added value’ * Independents...
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...Starbucks: Delivering Customer Service Case Study, BEP 430 Marketing 20030059 Dong-ock Kim1, 20030071 Min-geuk Kim2, 20040054 Keehyung Kim3, 20040535 Yohan Jo4, 20076006 Huang Qiuling5, 20076035 Dorjsuren Bayarmaa6 Marketing Team A1 2 3 4 5 6 erst_licht99@hotmail.com1, kmg0702@hanmail.net2, keehyoung@gmail.com3, zukjimote@gmail.com4, sharlin_huangqiuling@hotmail.com5, gordok_88@yahoo.com6 Professor: Wonjoon Kim Date submitted: May 7, 2007 TO: Day, vice president of administration in North America, Starbucks FROM: Dong-ock Kim, Min-geuk Kim, Keehyung Kim, Yohan Jo, Huang, Qiuling, Dorjsuren Bayarmaa RE: Starbucks: Delivering Customer Service DATE: May 7, 2007 Market Analysis Starbucks provides the highest-quality coffee what it believes in the world. It has hundreds of product lines and the sales of beverage take the largest percent. Despite of Starbucks’ overwhelming presence and convenience, customers think there was just a little of image and product differentiation between Starbucks and the smaller coffee chains. However, Starbucks has an uncomplicated distribution strategy, and it tries to make customers get entrance to Starbucks products easier and provide more convenience to customers. Moreover, it has company-operated stores located in hightraffic and high-visibility and non-company retail channels. In addition, Starbucks has four major competitors. Minneapolis-based Caribou Coffee which provides the look and feel of an Alaskan lodge has more than 200 stores...
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...description of the Starbucks Coffee Corporation. This paper will also discuss the six components of Starbucks organization’s supply chain. This paper will also discuss the potential problems with the supply chains and what could be used to prevent the problems. This paper will show control chart with the global operational processes. Lastly, this paper will address the importance of quality management and measurement. Starbucks Coffee Corporation Starbucks Corporation is one of the best examples of a global organization that deliver services and goods all around the world. Starbucks Coffee began in 1971 in Seattle’s Pike Place Market. Starbucks is the largest coffee company and coffeehouse global. Starbucks name derived from character in the Moby Dick book the first mate and the logo is Greek mythology twin-tailed siren. With more than “23,187 Starbuck stores in 64 countries, including 12,973 in the United States, 1,897 in China, 1,088 in Japan and 927 in the United Kingdom” (Starbucks Company Statistic, 2014). By “one person, one cup and one neighborhood,” Starbuck mission is “to inspire and nurture the human spirit” (Starbucks Company Profile, 2014). I am not a coffee drinker but ever since Starbucks been around I am drinking coffee. I never knew about Frappuccino’s, Lattes or Expresso’s. My favorite drink is Sugar Free Caramel Macchiato with couple splashes of French Vanilla syrup coffee or the Vanilla Bean Frappuccino. Let’s not forget about Starbucks other products...
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...Bobcorp are some of the competing firms as big as Starbucks with a strong hold in different geographic regions. Thus competing with these firms is quite hard. As there is no differentiation and switching costs for customers, competition is dominant. As firms invest millions and billions into this business, they fight till the last cent. 2. Potential Entrants- There are two ways to look at potential entrants. First thought would be the threat of Mom and Pop Coffee houses. They seem to be pretty high as it is easy for anyone to start a coffee house with less available resources. Second thought gives us an idea that if we compare the size of new entrants to the size of Starbucks the same threat seems negligible, as it requires vast amount of resources and time to be in competition with Starbucks. 3. Bargaining power of buyers- Products offered by different firms is identical and undifferentiated, moreover there are no switching costs for customers so bargaining power of buyers is apparently high. 4. Bargaining power of suppliers- Bargaining power of suppliers is high as coffee beans are the single most important ingredient to Starbucks and there is no substitute product for coffee beans. If Starbucks choose to switch to a new supplier, switching costs and other hassles would be high. Quality of service of the new supplier is unknown and integrating this supplier in the Starbucks supply chain is a big challenge for Starbucks. 5. Threat of substitute products- Threat of...
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...SWOT Analysis Starbucks Donnie Walker Mgmt 303 Starbucks SWOT Analysis Starbucks is a specialty coffeehouse chain that was started in 1971 in Seattle Washington. In 1982, Howard Schultz joined Starbucks, merging the Italian coffee shop culture with the pre-existing Seattle store. The coffee culture soared allowing for expansion of more Starbucks locations throughout the United States to develop during the 1990’s. Starbucks popularity allowed it to become the first publicly traded company. Starbucks continues to expand and currently has more than 15,500 locations in more than 43 countries. Starbucks mission statement is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (www.starbucks.com). One of the core strengths Starbucks possesses is its employee management and treatment. Starbucks employees are offered excellent benefits and pay. Starbucks offers a total pay packages called “your special blend”. This package includes: bonuses, 401(k) matching and discounted stock purchase options, adoption assistance and health coverage. Starbucks will help reduce out-of-pocket expenses for education. Very few companies are competitive with their pay and benefits package in this day. Starbucks is the exception and was ranked one of the top 100 companies to work for several years in a row. The appealing employment through Starbucks means less turn around for the company and more profit. Yet another core strength...
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...Name | Starbucks Corporation | Industries served | Coffeehouses, Restaurants | Geographic areas served | Worldwide | Headquarters | U.S. | Current CEO | Howard Schultz | Revenue | $ 14.9 Billion (2013) [25% Profit Gains] | Total no. of retail stores | 20,184 (2013) 13,279 in the United States | Employees | 200,000 (2013) | Main Competitors:Around the world | McDonald's Corp., Dunkin' Brands Group, Inc., Nestlé S.A., Green Mountain Coffee Roasters, Costa Coffee, Caribou Coffee Company | Starbuck’s Global Footprint Table 1 SOURCE: The Washington Post, (2013), A coffee giant’s global footprint [ONLINE]. Available at:http://apps.washingtonpost.com/g/page/world/a-coffee-giants-global-footprint/514/ [Accessed 12 March 14]. Starbucks’ External Environment Porter’s five forces Threat of new entrants: Medium-High New entrants could include local coffeehouses and companies like 7-eleven (more convenient than Starbucks) that offer new blends of coffee drinks. The entry barrier for the coffee industry is relatively low, even for premium coffee like Starbucks. Any large and well-funded company could be potential entrants. McDonalds, for instance, is able to quite easily add specialty coffee to their existing services and enter into the market. There is low product differentiation in the sense that coffee and pastries are made from basic ingredients that aren’t too difficult for one to re-create by oneself. And lastly, customers have no switching cost which...
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