...7 Market entry strategies adopted by Starbucks 7 Porter’s 5 forces 8 Challenges and Barriers in International Business 11 Conclusion 13 References 15 Executive Summary Starbucks is one most successful example of transnational companies across the globe with its rich cultural and organizational strength. This paper analyzes Starbucks from an International Business perspective in which the various nitty-gritties of International Business are applied on the company to analyze its core strengths and prospect areas of concerns. The paper starts with an introduction regarding Starbucks, its origin, current standing in terms of stores across the world and a brief history. The SWOT analysis of the company uncovers its major strengths and weakness and prospect areas of threats and opportunities while expanding internationally. The current situation analyses analyzes the prime factors of the current organizational situation, which are of use and which should be looked forward to improve its international perspective. Further the paper discusses its basic market strategies while entering in any foreign market in which is focusses on analyzing the market and culture in depth and the collaborating partner so as to keep a sync with its values. The organizational barriers discusses the various obstacles and barriers that come in the way of any company while going international and how Starbucks has overcome them with great effieicncy. Various recommendations to Starbucks have been quoted...
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...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, 2012). Today, Starbucks is the largest coffeehouse corporation in the world. From its start as a local coffee bean roaster and retailer, the business has flourished in just four decades. In the 1990s, Starbucks was opening at least one new store every business day, a growth rate that was sustained until the 2000s. Starbucks went global in 1996, opening their first store in...
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...1|Page Business Internationalization STARBUCKS’ INTERNATIONAL OPERATIONS1 Internationally, we are in our infancy. (Howard Schultz, Chairman & Chief Global Strategist – Starbucks, 2003) The expansion strategy internationally is not bullet-proof as it is in the U.S. (Mitchell J. Speiser, Analyst – Lehman Brothers, 2003) ALL’S NOT WELL WITH STARBUCKS In March 2003, Fortune came out with its annual list of “Fortune 500 companies”. For Howard Schultz (Schultz), Chairman of Starbucks Corp. (Starbucks), this list was special as Starbucks [was] featured in the list (position 465). It was a dream that come true for the Seattle-based entrepreneur. Though the U.S. economy was reeling under recession and many retail majors were reporting losses and applying for bankruptcy, Starbucks announced a 31% increase in its net earnings and a 23% increase in sales for the first quarter of 2003. Analyst felt that the success of Starbucks showed that a quality product speaks for itself and the fact that Starbucks spent less than 1% of its sales on advertising and marketing strengthened this view. In addition to be a popular brand among customers, Starbucks was also considered the best place to work due to its employee friendly policies (Starbucks was the first organization in the U.S. to offer stock options and health coverage to part-time employees also). However, analysts felt that the success of Starbucks was due to its profitable domestic operations. It was reported that most of Starbucks’...
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...Stella for the first time after two years? The case study manifests McDonald’s cold-blooded actions against the anguish of the 79-year-old plaintiff, Stella Liebeck in much publicized lawsuit, “hot coffee case”. It is the social responsibility of the company to look into the agony faced by the consumers in relation to its product, and this is where McDonalds fall short. The incident: The accident took place on 27th February, 1992, in Albuquerque, when Stella Lei beck along with her grandson ordered a McBreakfast at McDonald’s drive-thru on the way home. She was in the passenger’s seat, during her attempt to add cream and sugar in the coffee, inside stationary car, the scalding coffee spilled onto her lap. McDonald’s coffee was exceedingly hot, around 170 degree against the industry standard of 120-130 degree, within three seconds it caused third-degree burns on Stella’s groin area. She suffered numerous torments both physical and mental in the course of recuperation which took almost two years. After two years Stella sent a letter explaining the incident to McDonalds, her intent was not to claim for compensatory damage or filing a lawsuit for it, but to admonish them against the repercussions of their dangerously hot coffee posed. Her polite request to lower the coffee temperature was in the public interest. Past Action: The accident was not first of its kind for the McDonalds and the management was well aware of the fact that the incident is in the capacity to produce...
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...Business Research for entry of Global Specialty Coffee Chains in Indian Market Submitted to Dr. Arun Abraham Elias BRM RESEARCH PROPOSAL by Abhishek Rehan PGP16/301 Email id: abhishekr16@iimk.ac.in 2/28/2013 CONTENTS ABSTRACT……………………………………………………………………………………….3 INTRODUCTION………………………………………………………………………………...4 PROBLEM STRUCTURING…………………………………………………………………….5 STAKEHOLDER MAP…………………………………………………………………………..7 LITERATURE REVIEW…………………………………………………………………………8 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS………………………………...10 PROPOSED METHODOLOGY AND METHODS…………………………….………………11 SIGNIFICANCE OF STUDY…………………………………………………….……………..12 LIMITATIONS OF STUDY…………………………………………………………………….13 REFERENCE…………………………………………………………………………………….14 2 ABSTRACT India has witnessed a rapid social and cultural transformation in the past decade, mostly due to substantial western influence in every sphere of life. Coffee not only evolved from a mere commodity to a competing brand across companies, but there also has been a significant shift in its consumption pattern. Consumption of coffee at a coffee chain has grown at a rapid pace and has almost outgrown the consumption in our living rooms. Global giants like Barista and Costa Coffee have opened up retail outlets in India, though the café market is mostly dominated by Café Coffee Day in India. Through this research, I would try to evaluate the industry attractiveness of a new global coffee chain trying to enter Indian market and set up outlets here. In order...
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...cscanada.org Study on Competitive Advantages of Starbucks Surfers’ Paradise Coffee Shop ZHANG Zhenjia[a],* [a] School of Tourism and Geographical Science, Shenyang University, Shenyang, Liaoning, China. * Corresponding author. Received 25 May 2012; accepted 9 September 2012 Abstract This study is conducted to give a clear picture of the competitive advantage of the Starbucks Surfers’ Paradise coffee shop. With this purpose as the direction, a thorough marketing research is conducted. According to results of the research, a conclusion of the competitive advantages of the shop is achieved based on the analysis of its marketing mix and positioning. Generally speaking, the Starbucks Surfers’ Paradise coffee shop’s convenient location, guaranteed high quality of both coffee and service, and the Starbucks brand itself give it assurance of success. Key words: Competitive advantages; Starbucks; Marketing mix ZHANG Zhenjia (2012). Study on Competitive Advantages of Starbucks Surfers’ Paradise Coffee Shop. Management Science and Engineering, 6 (3), 16-21. Available from http://www.cscanada.net/index.php/mse/article/ view/j.mse.1913035X20120603.1788 DOI: http://dx.doi.org/10.3968/ j.mse.1913035X20120603.1788 marketing theories including marketing mix, positioning, competitive advantages and the interrelationship among them. Further, on the base of the literature review, the essay analyzes the specific situations of the shop in question from two aspects of marketing mix...
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...services they offer. Starbucks provides a good quality service, an inviting atmosphere and an exceptional coffee that most of the customer wants. But in spite of that, as what a normal company experiencing, they are also facing different issues and concerns. The key issues facing this firm were its attempts at massive expansion and creating new value innovation. The need to expand could cause the company to become over exposed and risk its ability to change. New players in the field such as McDonalds pose a new potential threat of competition, though it is unclear if they share the same market. They were also concern on continually improving their coffee. Given the specialty coffee market’s transition into the mature stage of the industry lifecycle, it is important to maintain a reputation for the highest quality coffee in the industry. To ensure the quality of their coffee, Starbucks should continually analyze their brewing systems and practices and consider renovations. The brewing process should at all times be judged based upon its ability to bring out the complexities and distinctive flavours of the world’s different exotic specialty coffees. Starbucks should also be intent upon protecting whatever brewing process they deem to be the best through patents or acquisition of patents, which would, in turn, provide a defendable competitive advantage. Although the American coffee market is value over $18 Billion, over reliance on this market leaves Starbucks...
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...COMM 401: STRATEGY AND COMPETITON IDIVIDUAL CASE ANALYSIS: CAFÉ COFFEE DAY By: Presented to: John Molson School of Business Tuesday July 29, 2014 Problem statement Although India is traditionally known as a tea-drinking nation, Café Coffee Day (CCD) was able to grow the café culture and become the leading coffee chain in India. However, to keep maturing and be relevant, CCD needs to come up with ways to react to the entry of Starbucks in the market, which is the leading coffee chain company in the world. CCD should decide on how strong and forcefully it should react towards Starbuck’s entry, based on whether there is enough space for both brands to be provided in India’s growing market or not. Café Coffee Day should find ways to promote its brand in such a dynamic environment that is affected by all the various competitive brands and changing lifestyle of consumers. The following paper will analyze the external environment of the coffee market, the internal environment of Café Coffee Day. These will be taken into account when coming up with alternatives and recommendations that will help Café Coffee Day remain growing successfully and have a strong brand image in the market. External Analysis: The coffee industry will be analyzed firstly at the macro level through the PEST analysis, followed by an in depth look at Porter’s five forces and how they play out in this industry, and finally looking at the key success factors in this industry. PEST Analysis ...
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...Marketing Plan for Starbucks Coffee BMM 364 Assessment-Part A Written by: Tianyi Wang (WAN12383771) Written for: Leo Billington 2012/10/19 * Table of Contents 1.0 Executive Summary 3 2.0 Introduction 4 3.0 Current External Marketing Situation 4 3.1 External/General Environment analysis and Trends 4 1 Demographic Segment 4 2 Economic Segment 5 3 Political/Legal Segment 6 4 Social-Cultural Segment 6 5 Technological Segment 8 3.2 Detailed Market Analysis and Projected Demand 8 1. Market Size 8 2. Market Growth Rate 9 3.3 Industry Analysis Including Porter’s Five Forces 9 1. Threat of New Entrants 9 2. Bargaining Power of Supplies 10 3. Bargaining Power of Customers 10 4. Power of Substitutes 11 5. Intensity of Rivalry 11 3.4 Competitors Analysis 11 4.0 Current Internal Analysis 12 4.1 SWOT of the Business and the Product/Service 12 1. Strengths 12 2. Weaknesses 13 3. Opportunities 13 4. Threats 14 4.2 Issues and Risk Analysis 14 1. Strategic Risk 15 2. Operational Risk 15 3. Political Risk 15 4. Country Risk 15 5. Technological Risk 16 6 Environmental Risk 16 4.3 Ethical and Corporate Socially Responsible Behavior 16 5.0 Identify a Commercially Viable Market Opportunity 17 5.1 Market Opportunity Including Potential Segments of the Market and Justification 17 5.2 Define the Value Provided 17 5.3 Positioning statement 18 6.0 Marketing Plan Objectives 19 7.0 Conclusion...
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...strategic direction and business activities are determining factors of a business organization success or failure. I have selected a Christian Internet/Cafe organization to develop as a strategic plan. This plan will include my mission and vision guiding principles. Mission Statement The goal in a mission statement is define the strategic planning of a company. The company mission statement describes “the company’s product, market, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision maker (Pearce & Robinson, 2009 p. 12). The mission statement says who we are and what we do. In the Christian Internet/Café organization the mission is to have customers of all ages enjoy coffee, food and purchase religious supplies and books and share the internet experience in a comfortable environment. The organization will be a place that is unique, upscale, and customers can be a part of innovative experience. Vision Statement The vision statement for my business is to become a market leader through differentiation of the internet/café. The aspiration is to have my organization become a one-stop-shop of business for the Christian community to receive nourishment, obtain reading material, supplies and have internet access for educational or research purpose. There will be advertising and promotional tools attained to make customers aware of the company offerings. My advertising and promotional tools will...
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...collected several types of data, which are Primary data and secondary data. Normally, I will get the articles from the hunt library and Internet. In the process of analyzing the information, some essential methods will be used, such as Motivation Strategy analysis, Equity Strategy analysis and Goal-setting Strategy analysis. The issue is to investigate and to analyze the rewards and performance structure of Starbucks Corporation. Starbucks Corporation, one of the most famous retail coffee shops chain in the world, specialize in grinding, roasting, and selling special coffee beans and a variety of coffee or tea drinks. Starbuck publicize they are the “third place” between home and company, where you can get together with families and friends, or just take pleasure in a quiet moment alone with fresh coffee, book and music. Starbucks always meet its customer’s requirements; they achieve a good motivation staff which will be beneficial on its internal and external customers. Its internal customers includes its shareholders, managers and staff, whereas its external customers are the people who with trend knowledgeable coffee drinker. Someone think that to measure a company success or not, is base on the profit that this company earned. But in these days, the attitude should be changed due to the global market changing. For staff has become one of the most important factors in...
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...INTRODUCTION Established in 1742, Whitbread is one of the UK’s oldest and well-respected companies. The story really begins in August 1720 with the birth of Samuel Whitbread, who began his brewing apprenticeship in 1736, then founded his first brewery six years later. In 2001, Whitbread become the company it is today. They sold their breweries and left the pub and bar business, refocusing on the growth areas of hotels and restaurants. Their reinvention as the UK's leading hospitality business naturally coincided with the ending of this country’s brewing and pub-owning tradition, started by Samuel Whitbread over 250 years earlier. Now Whitbread is the UK’s biggest hospitality company, it has got the UK’s no. 1 hotel brand, Premier Inn and the no.1 coffee shop brand, Costa. Also very proud of their much-loved restaurants, Brewers Fayre, Beefeater...
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...revenue from the sales. The difference between the total revenue and total costs becomes the profit to the firm. The total revenue to total cost approach is, therefore, concerned with maximizing the difference between total revenue and total cost. 2. Marginal revenues to marginal cost approach are meant to supplement the total revue to total cost approach (Taylor, 2008; Landsburg, 2011). In this perspective, marginal profit is arrived at after subtracting marginal cost from the marginal revenue of a firm. In the event that the marginal revenue is higher than the marginal cost at a given level of output, it follows that additional quantities should be produced. B. 1. Marginal revenue is known to be the revenue that accrues to the firm after having produced one extra unit on top of what had been produced initially. It is got from dividing the total revenue obtained by the firm from trading activities with the number of units sold. Marginal revenue increases when the production of additional units generates more revenue while it reduces when the production of additional units tend to result into the realization of relatively low revenue. It follows the notion of having a revenue increase at a diminishing rate. The marginal revenue remains constant if the production of an extra unit does not add to the value of the revenue realized in the firm....
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...Managing Diverse Employee at Starbucks: Focusing on the ethic and Inclusion Abstract Workforce diversity is a reality of the modern times for every organization and managing it effectively can lead to a sustainable competitive advantage. The purpose of this paper is to discuss how managers lead diverse employees in a global environment and what makes this company so unique. Effective management of diversity is not only employing diverse employees, but learning to appreciate, respect and respond to the needs, value, and beliefs of diverse employee and provide a positive work environment. Therefore, we will analyze the general environment and task forces that affect the diversity, as well as the challenges faced by Starbuck managers when managing diverse employees. Besides, the impact of diversity on the company performance will be subject of analysis through a value driven perspective. Lastly, we will identify some of the best practices for effectively managing diversity and propose some recommendations. Introduction One of the greatest challenges for managers today is managing the increase of diversity in the workplace. Diversity is defined as” dissimilarities or differences among people due to age, gender, race, ethically, religion, sexual orientation, education any characteristic that are used to distinguish between people. According to the Thompson (2005), organization who limits the kinds of people they are willing to hire, are limiting also the talent pool from...
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...• 1. Starbucks Coffee CompanyExpanding into IndiaBRENDAN CRONININSIDE:This document contains an environmental analysis of Starbucks Coffee Company,strategic decision options, an action plan to implement those strategic decisions anda recommendation on Starbucks expanding into India. • 2. 2Current Situation: Starbucks is a provider of high-end coffee products and more importantly, arelaxed experience. Starbucks as it is known today was purchased in 1987 and hasseen tremendous amounts of growth over the years. The company is known globallyand does business internationally, although it’s headquartered in the United States.Starbucks has historically had a differentiation strategy, with prices comparablyhigh and uniquely high-quality products, service and environment for the consumer.This differentiation strategy is used with a horizontal growth strategyinternationally. Starbucks currently has a market expansion strategy focusedaround Asia, and has recently seen both problems and great sales figures arise fromthis market in China and Japan. The objective of this strategic campaign is tocapitalize on the highly dense Asian market, with its high population and growingwealth. In 2002, Starbucks announced that it intended on breaking into the Indianmarket, however has failed to do so four years later. The problem facing Starbucksright now is whether or not to expand into India and if the company were to expand,how it would go about doing so. If Starbucks does decide to expand into India...
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