...Starbucks Corporation: Competing in a Global Market There are multiple factors that Starbucks should consider in deciding where and when to expand into international markets. In determining where to expand it’s important that Starbuck’s considers the local demographics of each region they may expand into. When determining which countries or regions to expand into, they need to consider where consumer’s tastes and preferences align with their product offerings. In Starbucks case, they offer a product that is used by people worldwide but they sell it at a price premium so it’s important that they choose locations in more affluent areas. While their goal seems to be to eventually expand into markets throughout the entire world, including emerging markets, their focus at this point should mainly be on more established countries where the demand will be much greater due to the larger percentage of consumers who can afford their product. They should also look to densely populated areas where they can be sure to see large amounts of traffic on a daily basis. They must also consider differences in host government demands when determining where to expand. Some markets may be more difficult to enter due to local rules and regulations that may not be in place in other countries. Since Starbucks has chosen to operate with local partners in their international markets it’s important that they choose locations where they feel comfortable and confident in the abilities of their...
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... Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. The Starbucks Corporation has dealt with many different elements when entering a new international market. Some of the controllable aspects that have been handled are things such as the taste pallets of different countries. For instance Japan prefers less sweetener in their products as opposed to Americans. In addition to this Starbucks was able to change menus to satisfy new foreign consumers such as introducing café style foods to compete with the Italian market. Lastly Starbucks had the ability to expand into new market segments, like bottled drinks in order to capture more control of foreign markets like Japan. On the contrary there were also several things that the Corporation could not control. Such uncontrollable elements included the competing markets of foreign countries like Italy’s, whose market was already saturated with coffee shops who could provide better and cheaper drinks. Another uncontrollable aspect that came into play was maintaining relationships with Foreign Secretary’s and other Officials. This could make the difference between successes and failure for the company overseas. Lastly the competition of look-a-like companies, stole sales by having more caffeine or cheaper prices. 2. How might Starbucks’ improve profitability in Japan? There are several ways in which Starbucks could improve profitability. The first of which would be to continue...
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...Upper Iowa University Chris Worley 11/12/2014 A SWOT Analysis of Starbuck’s Organizational Introduction Starbucks got its start in 1971 by three academic teaching professionals. English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, all three love coffee and decided to open Starbucks Coffee, Tea, and Spice in Pikes Place Market, Seattle Washington. The three partners shared a common love for fine coffees and exotic teas. They believed they could build a customer base in Seattle that would appreciate the best coffees. With this being the case, they borrowed the money and Starbucks’ was born. Since the first stores grand opening, Starbucks has made the fortune 500 list, they had a goal of opening 30,000 stores by 2013 and half of those are going to be outside the U.S. (Starbucks, 2014) Starbucks is the largest coffeehouse chain in the world with presence in 50 countries and about 15000 stores (Starbucks, 2014). The Seattle based company sells espresso based hot drinks; drip brewed coffee, coffee beans, snacks, Panini and pastry (Starbucks, 2014). The company also sells items such as tumblers and has an entertainment division which markets music, books and films. The company has diversified on its product range in order to gain a competitive advantage over other similar companies. According to Starbucks, (2014). Starbucks Corporation is a dealer in coffee retailing, its product is known as specialty coffee product, with operation in many countries...
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...Starbucks Corporation: An Extensive Analysis By: Muhammad Almuhanna Andre Johnson-Payne Jessica Pope Natalie Schiefer Jordan Sprague Management 429 – Dr. Yu Liu April 16, 2012 Table of Contents Brief Introduction & Key Issues 3-4 External Analysis 4-5 Internal Analysis 5-7 Analysis of Business Level Strategy 7-8 Analysis of Corporate Level Strategy 9-11 Recommendations 11 References 12 Appendix 13 Brief Introduction & Key Issues Starbucks opened their first location in Seattle, Washington in 1971. Since then, the company’s main focus has been to ethically source and roast the highest quality Arabica coffee beans in the world. The company’s mission is “to inspire and nurture the human spirit, one person, one cup and one neighborhood at a time.” They achieve this by having more than 17,000 locations around the globe and being the world’s largest premium specialty coffee retailer (Starbucks Corporation, 2012). Starbucks was founded by three acquaintances: an English teacher, a history teacher, and a writer. The three were inspired by entrepreneur Alfred Peet, Dutch American entrepreneur and the founder of Peet's Coffee and Tea in Berkeley, California. The name Starbucks is taken from Moby Dick, after the name Pequod was rejected by one of the cofounders. Therefore, the company was named after the chief mate on the Pequod, Starbuck. Their logo is inspired by the sea featuring a twin tailed siren from Greek myths (Starbucks Corporation...
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...1. Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. It is the largest coffeehouse company that buys, roasts, and sells whole bean specialty coffees and premium specialty coffee drinks through an international chain of retail outlets. Inspired to the Italian espresso culture, it was started by Howard Schultz in 1985 and has impressively grown in the past 20 years form the first shop Il Giornale to the existing 5,688 outlets in 28 countries. The company is organized into two business units that correspond to the market segments: North America and International. The main guidelines of the business have always been commitment to aggressive expansion, the refusal of sacrificing “long-term integrity and values for short term profit” and the idea that the stores are the biggest source of advertising (1% of annual revenue is devoted to advertising, against the 10% of other retailers). This strategy has permitted to Starbucks to be one of the fastest growing companies in the world: the company’s net revenues increased at a compounded annual growth rate of 20% , to $3.3bn in 2002. The business mission is to provide the finest quality coffee (the Exclusive Supremo Bean) “while maintaining uncompromising principles”. Starbucks achieves this by a high grade of vertical integration, (in 1992 Starbucks outbid European buyers for the Narino Supremo Bean) supported by strong relationships with the countries they export from, by the Starbucks-everywhere...
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...Initiative Paper Veronica Johnson Melissa Herrera Nick Engelke Carlos Martinez Gary Gilberthorp FIN/370 April 21,2014 Junius Jaubert Strategic Initiative Paper Starbucks Strategic Initiative expanding globally and reaching new customers is the goal of Starbucks Corporation. To produce more revenue as well as excel above the competing international coffee organizations. Starbucks Corporation must not only meet but also continually exceed this goal. Starbucks is known for continuously creating new innovations in the marketplace. The Corporation is also well-known For using various media channels to perpetuate their reputation as the top coffee organization in the world. This strategic initiative will increase these channels of communication to include Facebook, Twitter, television advertisements, and magazine ads. The resultant efforts of this strategic initiative will determine Starbucks future revenue and future direction of the organization. Starbucks has several current strategic initiatives in place to improve the organization’s sales and drive long-term shareholder value. This strategic initiative will further expand current strategic initiatives by including a multi-channel advertising and marketing campaign to increase successfully the transparency of the Corporation. This initiative will enable Starbucks to expand globally and reach new customers to enable one-on-one dialogue while increasing sales both internationally and domestically. Current strategic initiatives...
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...Starbucks Change in Strategy By Brandon L. Chow Dr. Darryl Mitry National University School of Business & Information Management October 22, 2008 Executive Summary The following report and presentation is an inside look at Starbucks Corporation’s strategy and how it is currently affecting their sales and the long-term results. This will be accomplished by exploring four concepts of strategic business, the process for crafting a strategy, components of a macro-environment, five forces of competition and a SWOT Analysis. Analyzing the information and making recommendations based on the information gathered will show how Starbucks should keep or change their strategic plans. Focusing on principle concepts will systematically uncover what Starbucks has done well in the past, what current areas could be improved, and if the new changes ultimately weaken Starbuck’s market share in the long term or strengthen them. OVERVIEW Starbucks Corporation: Starbucks is constantly reinventing their stores to keep and attract customers. With coffee houses popping up in every nook and cranny, Starbucks has to be fresh and innovative. New technology that allows coffee customers to download the music playing in Starbucks stores to their iPhones is just the start of a wave of options for impulse purchases. Starbucks has roasters and brands of specialty coffee operating in North America, Latin...
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...1.0 INTRODUCTION Name : Starbucks Corporation (NASDAQ: SBUX) Headquarters : Seattle, Washington, U.S. Employees : 176,000 in 2008 Revenue for 2008 : US$10.383 billion CEO : Howard Schultz (Founder of Starbucks coffeehouse) Starbucks Corporation is an international coffeehouse chain based in Seattle, Washington, United States. Starbucks is the largest coffeehouse company in the world, with 16,120 stores in 49 countries, including around 11,000 in the United States, followed by nearly 1,000 in Canada and more than 800 in Japan. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks, and items such as mugs and coffee beans. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores. Starbucks’ Italian style coffee, espresso beverages, teas, pastries and confections had made Starbucks one of the greatest retailing stories of recent history and world’s biggest specialty coffee chain. In 2003, Starbucks made the fortune 500. 1.1 BACKGROUND OF THE COMPANY 1.1.1 Era before Howard Schultz In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in Touristy Pikes Place Market in Seattle. The three were inspired...
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...economic conditions that contribute to improve profitability, business growth and market size. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Financial release, 2007). Starbucks Corporation has established by purchasing high quality coffee beans and sells the customers along with a variety a specialty drinks and food that has met with an ever-increasing amount of success. Starbucks have succeeded several economic factors as well as price elasticity of demand. Price elasticity of demand can be determined by the percentage change in the quantity demanded with the percentage change in price. They should consider household income that people are willing to spend more on food and beverages when household income increases. Starbucks innovation in joint ventures has opened new markets and opportunities increasing product use among different demographics. Starbucks has proven to be highly innovative in business culture that offers prepaid cards, priced from $5 to $500. Joint ventures with Pepsi Company, Dreyer's Grand Ice Cream Inc and inspiring entertainment with the launch of "Hear Music" have developed Starbucks with great success. Starbucks has shown their values, leveraging market power, resources, and capabilities to achieve returns higher than their competition...
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...Starbucks is a leading company and a niche in the coffee business, especially popular in the United States, Canada and Japan. Since inception in 1985, its growth has been attributed to its national and global expansion strategies, innovative product development and increasing sales in current markets (Starbucks Corporation, 2009, p.1). According to the 2009 annual report (Starbucks Corporation, 2009, p.2), the company’s 16,635 stores in over 50 countries generated $9.8 billion in revenue, a figure indicating a negative growth in sales. As a result, current restructuring efforts by CEO Howard Shultz aimed at increasing revenue to $23 billion by 2012 (Helm, 2007, para.4) have necessitated an evaluation of the business model and growth strategy. In this report, we will perform a SWOT analysis on Starbucks, followed by recommendations that can be implemented to improve the sales and strategies of the firm. 1.1 S.W.O.T Analysis Strengths * Starbucks has developed to outshine other coffee retailers in the market through its outstanding financial performance, and the ability to maintain its high end standards of offering premium and exotic coffee beverages. * They have managed to develop a “Starbucks culture” amongst customers by creating an atmosphere that makes the customers feel sophisticated, welcomed and more knowledgeable of their product information. When the customers feel that they are of top priority, it also helps to create a strong sense of loyalty...
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...A Caffeine Giant: The Growth of Starbucks Abstract This paper examines Starbucks’ plan for rapid and thoroughly aggressive expansion in order to become the premier coffee ship in the United States and further, the World. Building upon a brand name that is recognizable worldwide, Starbucks continues to defy expectations, as it claims the title of the fastest growing fast-food company in the world (Horovitz, 2015). This paper provides a comprehensive analysis of Starbucks 7-year plan for growth (Tobey, 2014), and compares it to Quelch’s periodical on the demise of Starbucks (2008); suggesting that Quelch’s assessment that Starbucks growth destroyed its brand is misguided and inaccurate, while the opposite is then true. A Caffeine Giant: The Growth of Starbucks As the premier marketer of coffee and coffee products in the United States, Starbucks, an American corporation founded in 1971, is reaching new peaks as a global powerhouse, a seemingly unprecedented achievement following a slump in sales from 2008 to 2009. What makes this climb more magnificent is that it does so while competing against fast food giants such as McDonalds, Subway, and Burger King (Horovitz, 2014), dominating its competitors within its respective industry. John Quelch surmised that the slump Starbucks faced in 2008 was due to over expansion and a turn away from those consumers who wanted premium coffee with a personal experience (2008), when in reality...
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...27/05/2015 International Business Strategies TBS 984 Dr Alan Pomering T2, 2015 Week 1 Global Strategy: Preface Not a particular multinational enterprise (MNE) strategy, but “strategy around the globe” Most fundamentally about “strategy” before being “global” About entering foreign markets, but also how domestic firms strategise by competing against each other and dealing with foreign entrants 1 27/05/2015 Outline • A global global-strategy book • Why study global strategy? • What is strategy? • Fundamental questions in strategy • What is global strategy? • What is globalization? • Global strategy and globalization at a crossroads 3 Why Study Global Strategy? • Job and career aspiration opportunities • Awareness of what is going on in the world • Avoid downside risks of globalization 2 27/05/2015 Porters Critique Too Many Firms Pursue Best Practice and Seek Operational Effectiveness Through Benchmarking, TQM, JIT Etc. But This Is Not Strategy. Strategy Is About Being Different, Not Being ‘As Good As’. What is Strategy? • Origin-Greek word (strategos)-art of the general Sun Tzu, Chinese military strategist in 500 B.C. Modern-day application to business and competition dates to the 1960s • Plan versus Action - strategy is “explicit, rigorous formal planning” versus “a set of flexible, goal-oriented actions” • Strategy as Theory-how to compete successfully Firms have both intended...
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...glue that binds organizations together through the guidance of strategic and day-to-day operational decisions. An effective mission statement indicates how a firm is unique in its scope of operations and its products or service offerings. In addition, it proclaims corporate purpose, what the organization tends to accomplish, the market in which the firm intends to operate, and the philosophical bounds that are to guide their actions. The coffee industry has boomed in recent years. While fast food chains are growing at a rate of 2% each year, coffee shop chains grow more than 10% annually. According to the National Coffee Association Annual Drinking Trends Survey, “Even though 75% of the cups of coffee brewed daily are consumed at home, 66% of Americans buy their coffee outside of their homes.” This creates a strong demand in the coffeehouse market. Statista defines coffeehouses as “small establishments selling prepared coffee, tea, and other hot beverages.” In recent time, many coffeehouses started competing with other restaurants in the limited-service category by offering baked goods, sandwiches, salads, and other snack items. For instance, Starbucks has been battling Dunkin Donuts and McDonald’s for the top position as coffee king. In order to compete, each company has expanded their menu options and...
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...INTRODUCTION Starbucks, named after the first mate in Herman Melville's Moby Dick, was founded in 1971 at Seattle's Pike Place Market by three atypical businessmen, Gordon Bowker, Jerry Baldwin, and Zev Siegl. Starbucks mission is to "inspire and nurture the human spirit-- one person, one cup, and one neighborhood at a time." Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment -- primarily through its company-operated retail stores. In addition to sales through company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company. The Company's objective is to establish Starbucks as the most recognized and respected brand in the world. BACKGROUND By 1982, they manage to increase the number of stores from one to five. Apart from these stores there were a wholesale business of selling coffee and a roasting facility. The first recruitment of star bucks was Howard Schultz in retail marketing and sales division of star bucks. But after one year when Schultz wanted to expand the business by opening a chain...
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...STARBUCKS By Patricia L. Boyd BA 2430 International Management Professor Jeff Walls January 30, 2011 Summary Three Seattle entrepreneurs started the Starbucks Corporation in 1971. Their prime product was the selling of whole bean coffee in one Seattle store. By 1982, this business had grown tremendously into five stores selling the coffee beans, a roasting facility, and a wholesale business for local restaurants. Howard Schultz, a marketer, was recruited to be the manager of retail and marketing. He brought new ideas to the owners, but was turned down. Schultz in turn opened his own coffee bar in 1986 based on Italian coffee cafes, selling brewed Starbucks coffee. By 1987, Schultz had expanded to three coffee bars and bought Starbucks from the original owners for $4 million. He changed the name of his coffee bars from Il Giornale to Starbucks. His intention for the company was to grow slowly with a very solid foundation. He wanted to create a top-notch management by wooing top executives from other well-known corporations. For the first two years, Starbucks losses doubled as overhead and operating expenses increased with Starbucks' expansion. Schultz stood his ground and did not sacrifice long term integrity and values for short-term profit. By 1991, Starbucks' sale increased by 84% and the company was out of debt. Starbucks brought back founder Schultz to lead daily operations in 2008, closed hundreds of stores and cut jobs. It reemphasized training for...
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