...Abstract In this paper there will be a discussion concerning the problems that the Starbucks Coffee Company has had to deal with when they expanded their business operations to different parts of the world. Because of the cultural differences both from within the company and the customers there were various issues that had to be dealt with before the company could successfully manage the coffee shops internationally. There will also be a brief discussion about why some people do not acknowledge other people’s cultural differences and how this could effect someone’s’ ability to effectively communicate with other people when dealing with a multinational corporation such as Starbucks Starbuck’s worldwide corporate agenda is to be known as the leader in coffee selling and to be the number one name for coffee in all of their targeted expansion goals. They have a plan to do this by selling only quality coffee and other premium goods and service (Benzaken, 2007) Today Starbucks is a household name globally, but it has not always been that way they had some initial problems when they first started to go global, as many companies have experienced. Starbucks went into a joint venture with Japan and later they extended their business into Europe and then eventually into the Middle East (Benzaken, 2007). The socio economical atmosphere in the coffee business is a lot different in other countries for instance; the coffee consumption tendencies are so dissimilar...
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...Case Study #1: Starbucks Starbucks is the largest coffeehouse company in the world. According to starbucks.com: “There are approximately 19,767 stores in over 60 countries in the world.” Starbucks has expanded its company around the world like no other coffeehouse company ever. This is the result of such an incredibly successful business. Production is going so well for Starbucks because the revenues are being higher than expectations. Starbucks started a new strategic plan called “the Blueprint for profitable work,” in which the use multi channel sales distribution strategies to improve their performance and reduce company’s expenses. Moreover, Starbucks still center most of their attention to market the quality of its principle product: the coffee. Furthermore, this company makes such a big effort on modernize and improve their product every year that consumers keep growing daily. And finally due to their expansion not only in the nation but also all around the world this company is able to increase their net sales, net income, and returns in dividends. Starbuck’s global international expansion was initiated in 1996 when they open their first franchise in Tokyo, Japan. This global expansion has brought Starbucks some positive advantages, evidenced in the increased of the company’s annual return. The China and Asia Pacific market are so important to Starbucks not only because they have one of the best economies in the world but also because Starbucks owns almost 3,300...
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...upcoming expansion opening about 1200 stores around the world in 2013. According to the article, Starbuck’s global strategies to international market seems going well considering the fact that it has the biggest coffee-chain in the world over many years. However, the article also points out a retreat of the company in Australia with the number of the stores dropping from 84 to 22 in 2008 (기사). The decreasing popularity of the company in Australia appears to be quite surprising compared to its significant success in the U.S and many other countries such as Canada, Japan and China and so on. In this manner, examining Starbuck’s failure in cross cultural factors rather than identifying reasons of prosperity in other countries can be critical for the company. Moreover, finding out the fundamental reasons of its regressive business in Australian market might lead to developing solutions for cultural markets as well. Surely, the Starbuck’s failure in Australian market can be explained by various cultural factors. In this report, however, global strategy will be discussed as a major theoretical principle and finally there will be recommended solutions for the problems. Starbucks Struggling In Australia With the growing trend of globalisation, many companies has been trying to expand their business globally for past decades. In order to be successful in international expansion, setting a good global strategy is a vital process for a company. The definition of global strategy...
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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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...City college international faculty of university of sheffield 2013 STARBUCKS COFFEE STRATEGIC PLAN MODULE TITLE: Business Strategy Executive Summary The main purpose of the current paper was to develop strategic plan for Starbucks for the future and to analyze the alternative strategic directions compared with the existing strategy. The paper starts with brief description of the company profile and the product line that company successfully offers during their operations history. The second part of the strategic plan analyzes the external environment of the company by analyzing the industry current situation. From the Five forces model we able to move on to ascertain that the industry generally is attractive that lead to a growth of strategy. The external environment analysis identify that company faces a strong competition from competitors from other industries like case of McDonalds and Dunkin Donuts. Also, from the external analysis was identified the success factors of Starbucks that led them to leading position in the industry. The drivers of change are describing the external environment in which the company operates and to which factors company need to pay attention for the future avoidance of challenges. The third section of the assignment analyzes the internal environment of the company there is given high attraction to SWOT analysis in order to understand the company’s opportunities for growth and strengths that could increase the strategy’s success and...
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...Factors-Starbucks LaToya Mason MKT 421-Marketing March 26, 2012 Sheryl Joyner Environmental Factors All corporations both nationally and corporations must consider the mechanics of expansion. This factor is inclusive for the marketing plan to start. Organizations have to review the global landscape, and industry trends to determine if expanding to a global market would be the right choice for the organization. Other factors that needs to be considered is confirming the market niche, timing considerations and of course have a marketing plan for the campaign. Once a decision is made, the marketing strategy is determined by the political, economic, and cultural environment. The political environment will have a significant impact on a company’s international marketing activities (The Political Environment, 2012). So, the political climate in other countries must be monitored in order to ensure successful marketing internationally. The economic environment is part of the macroenvironment encompassing wealth, income, productivity, inflation, credit, and employment which will affect the company’s markets and opportunities (Economic Environment, 2012). All of these factors are considered in the economic environment. The cultural environment is best defined as institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors (Cultural Environment, 2010). One company that has been success in both domestic and global markets...
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...Starbucks: Going Global Fast Ronnie Deaver MKG400 International and Multi-Cultural Marketing Colorado State University – Global Campus Dr. Michael E. Ricco June 19, 2016 Starbucks: Going Global Fast Starbucks is a fast growing and well known US based company focused on penetrating international markets. When entering a new market, there are always associated risks, problems, controllable/uncontrollable elements, and process optimizations. Below is a discussion on the factors contributing to Starbucks expansion into international markets such as Japan. Controllable Elements For any company expanding to a new market, there is a plethora of controllable and uncontrollable elements to consider; some new and some similar to those faced in domestic markets. Interestingly, the controllable factors that Starbucks encountered when entering the global market were similar to those faced in their domestic market; product, price, place and promotion. The Starbuck’s brand name and image connect with millions of customers globally. Starbucks can control and adjust its product to meet the cultural needs and expectations of a market; including price, availability, and their marketing strategy. Using appropriate market research, Starbucks can pre-emptively make certain that their product is the right fit for each of its international locations. According to Starbucks (n.d.), they maintain a high level of success internationally by working with international partners who understand...
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...Overview of Starbucks Starbucks is known for their variety of premium coffee and pastries. Like most businesses, Starbucks measures success by expenses, revenues, and store counts. Starbucks also emphasizes success on the growth of their brand and returning value to shareholders (Schultz, 2012). Starbucks’ strive to be innovators, leaders, and contributors to society and a healthy environment (Starbucks Coffee Company, n.d.). Starbucks continues to build a company with a fair and humane treatment for their people within the world and the communities they conduct business (Schultz, 2012). With the increase of competition in the industry, Starbucks’ is thriving to differentiate themselves from their competitors. Starbucks believes they can have a positive impact on the communities it serves (Starbucks Coffee Company, n.d.). “One person, one cup, and one neighborhood at a time” (Starbucks Coffee Company, n.d.). Launching Starbucks’ Natural and Little Bucks will separate them in the beverage industry. Product Description There is no denying that Starbucks is known for pronounced coffee, the next opportunity for growth is for to be known for great drinks. Starbucks’ Natural is a product line that appeals to multiple generations. Starbucks’ Natural drinks will be made from juice extracted from raw fruits and vegetables. This drink provides a healthy alternative of energy than the traditional Starbucks coffee and tea drinkers. The product line gives Starbucks the opportunity...
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...Starbucks’ Mission Statement Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow. The following six guiding principles will help us measure the appropriateness of our decisions: • Provide a great work environment and treat each other with respect and dignity. • Embrace diversity as an essential component in the way we do business. • Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. • Develop enthusiastically satisfied customers all of the time. • Contribute positively to our communities and our environment. • Recognize that profitability is essential to our future success. Corporate Objectives 1. Establish Starbucks as the most recognized and respected brand in the world 2. Achieve rapid growth through national and global retail store expansion opportunities – target 25,000 to 30,000 stores worldwide by 2013 3. Increase revenue through innovation of new products, and consistent delivery of the Starbucks experience 4. Increase U.S. and global market share – Target >7 percent U.S. and >1 percent worldwide 5. Secure a reliable supply of high-quality coffee beans, at stable prices, through environmentally and socially responsible means 6. Leverage the Starbucks’ brand through diversified product offerings Corporate Strategies 1. Market penetration of retail stores 2. Global market development 3. Backward vertical integration...
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...Successes in Global Expansion McDonalds and Starbucks McDonalds and Starbucks are two of the biggest and most recognizable companies in the world today. They have both dominated their particular markets to such an extent that they have begun competing for the others market share all over the world. Both companies have expanded to markets all over the world. Sometimes even expanding too fast for their own good. In 2008 Starbucks had oversaturated many domestic markets and ended up closing approximately 600 stores. (Merced, 2008) In the early 2000’s McDonalds realized they needed to revitalize their brand after they had attempted to expand to fast and had taken its customer’s needs for granted. (Light & Kiddon, 2012) McDonalds has reached such market penetration that in the United States it seems like you can’t drive but a few miles without passing the golden arches. They have over thirty five thousand stores, and have established those stores in over one hundred countries Worldwide. (Getting To Know Us) McDonalds had successfully spread their brand all over the world but with profits and brand notoriety falling fast they knew they had to make a change. McDonalds had fallen into a downward spiral of always trying to do what had worked for them in the past. They made every new store look alike instead of focusing on local or changing cultures (Light & Kiddon, 2012). With more and more people, especially in the United States, becoming more health...
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...The history of Starbuck’s started in 1971 when the store first opened in Seattle, Washington. Starbucks was founded by Jerry Baldwin, Zev Siegal and Gordon Bowker. The store primarily sold only coffee beans and coffee making equipment rather than the drinks they have become so famous for today. Later roughly 10 years, Howard Schultz was hired as Director of Retail Operations and came to the assumption that they should be selling drinks rather than just machines and beans. He couldn't persuade the owners, so he went his own way to start the Giornale chain of coffee bars in 1986. Today, Starbucks has expanded to more than 17,000 stores in 55 countries around the world. Their biggest presence is still in the United States, with 11,000 locations. (Coffee.org, n.d.). The company steadily produces similar store sales by mid-single numerals each year impressive results for such a large company. The progress is making the stock price ascend, and Starbucks is undertaking everything it can to keep it profitable. The organizational strategies of Starbucks includes Product Quality and Variety, Price Competitiveness, Customer Loyalty and Global Expansion (Essays,UK, 2013). The customers may concentrate on the quality of the product or the service. They also may concentrate on the different products that the organization may have to compromise. The Product Quality and Variety Acquire of Starbucks is that they are engaged in the production and selling of high specialized bread, pastries, cookies...
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...Final: A Starbucks Case Study Brian Davis Business Ethics BUSM 4263 Dr. Johnson April 5, 2012 Incorporating Coffee and Business the Starbucks Way The Early Years Starting a Small Group – During a business trip Howard Schultz visited Seattle, WA, investigating why a local coffee shop was outselling Macy’s in specific drip coffee makers. His visit brought him to Starbucks where he first met Jerry Baldwin, Zev Siegl, and Gordon Bowker. Inspired, Howard Schultz sought and achieved employment with Starbucks as the head of marketing, forming a small group of owners and leaders. A small group interaction is, “the process by which three or more members of a group exchange verbal and nonverbal messages in an attempt to influence one another” (Tubbs, 2007, p. 6). As a new member of the Starbucks group Schultz brought fresh new ideas and a vision for future growth and expansion. For example, Schultz helped develop customer-friendly skills that employees utilized to build better relationships with clientele. This process was the beginning of teamwork in the Starbucks Company during the Schultz era. Group Dynamics – Group dynamics is defined as, “the interactions that influence the attitudes and behavior of people when they are grouped with others through either choice or accidental circumstances” (Dictionary.com, 2012, p. 1). Over time the dynamics of the cohesive Starbucks team shifted, after hiring Schultz, causing dissention...
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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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...challenges facing Starbucks in 2010 Motives of Starbucks’ internationalization Exploring internationalization motives of Starbucks represented by a number of factors, including proactive and reactive factors, provides a better understanding of the reasons for the company’s decision to expand to foreign markets. Proactive motives are related to the firm’s motivation to take advantage of new market opportunities. While reactive motives represent that the firm responds to environmental changes and pressures in its domestic market or in foreign markets and adjusts the activities over time. (Hollensen 2011; Czinkota et al. 2009) Seeking growth and exploring new market opportunities are major proactive motives of Starbucks’ internationalization. Moreover, decision-makers are likely to explore first those overseas market opportunities perceived as having some similarity with the opportunities in their home market. At a later stage of internationalization Starbucks strived to make use of economies of scale which enabled the company to rise more rapidly on the learning curve and reduce production costs. (ibid) Major reactive motive for initial stage of Starbucks’ internationalization is represented by physical and psychological closeness to Canada that was the first foreign market for the company. Another reactive motive of Starbucks’ international expansion is saturation of the domestic market. The case study mentions that Starbucks expanded to foreign...
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...order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: 2012-02-22 By 2009, Starbucks had achieved a global reach of almost 17,000 stores in 56 countries. The company had enjoyed tremendous growth over the previous two decades. Between 2007 and 2009, however, Starbucks’ relentless march had been slowed by three forces: increasingly intense competition, rising coffee bean prices and a global economic recession. To remain profitable, the company started to scale back its overseas operations. In 2010, as the world gradually emerged from the economic downturn and as prospects for growth improved, Starbucks was faced with a critical strategic decision: Should the company resume its international expansion and once again intensify its commitments in overseas markets? If so, what approach should the company take? Had the pace of Starbucks’ internationalization (i.e. the rate of opening new stores...
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