...Executive Summary Starbucks Corporation offers gourmet coffee and coffee drinks in coffee bar-style establishments worldwide. Starbucks customers are coffee drinkers who wish to have a place where they can pick up a quick cup of coffee or treat. Starbucks offers a variety of products from regular coffee to breakfast sandwiches – all in their in-store environment. Due to its initial strategy and fast-paced growth, the Starbucks brand has developed through various product extensions and become a giant in the worldwide coffee business. Across the United States the gourmet coffee industry has seen a great expansion of growth over the last three years. With the worldwide recession, consumers have cut back on needless spending and are becoming more conscientious about what brands they choose to associate with. Starbucks, though successful, had gained the reputation of being a high-cost luxury that was losing its personality quickly. Competitors, including McDonalds, soon entered the market with increased vigor in an effort to intercept some of Starbucks lost market share. Starbucks must reassess their marketing strategy in order to re-emphasize the quality of their product, the reliability of their brand and the unique experience of being a Starbucks customer. Introduction The following will present strategic analysis of Stabucks company and discuss the rise and fall of the Starbucks brand and company in the U.S. market as well as present two possible strategies for re-gaining...
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...Globalization and Starbucks Globalization has impacted almost every organization currently in operation. Even when organizations choose to limit their activities and operations to a specific geographical region, globalization becomes part of operations as new technologies bring international attention and customers to the company. In the end, few organizations are able to escape the impact of globalization. Given the importance of globalization on the organization, there is a clear impetus to consider how this reality will impact business operations in both the short and the long-term. Using this as a basis for investigation, this research considers the impact the globalization is having on the Starbucks organization. Through a careful consideration of how globalization has impacted this organization, it will be possible to provide salient policy recommendations for change that will improve operations in the organization. Starbucks-An Overview In order to begin this investigation, it is first helpful to consider a review of the Starbucks organization and critical issues currently impacting its development. Reviewing this history of this organization, Lyons (2005) reports that Starbucks originated in Seattle, Washington as a premium coffee retailer. In an effort to foster the success of the organization, leaders chose an aggressive business model that would allow them to permeate and saturate local markets. The business model used by the organization was novel, prompting...
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...Starbucks has a strategy in production to create the perfect coffee, which is done by its Employees/Baristas, in its outlets across the world. These Baristas are trained directly by Starbucks on multiple aspects from creating a coffee to promoting and selling it, in its originality, as it should be and also delivering it to make for a very good experience for the customer. Starbucks has its own university where there employees are trained, Starbucks is looking to leverage its brand value to be able to sell premium coffee beans and coffees, premium teas and a host of other merchandise items such as mugs, coffee machines etc., all of which are original to the label to the Starbucks coffees. Starbucks spends more on training and developing their Baristas then in marketing. Starbucks’ Strategy includes expanding their store internationally, as well as, domestically. They plan to continue tracking and recognizing their employees. The strategy also includes real estate and store design as well as planning and construction. Starbucks strategy includes expanding their domestic store in three years – have Starbucks coffee houses everywhere in the USA. The International Strategy, will continue as it has always been a company owned and operated or licensing. Starbucks is considering a new subsidiary internationally. Starbuck has a strategy, which includes expansion of stores, their original Product Line, and even coffee purchasing strategy. Starbucks main location where...
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...2-B So what are the critical HR issues with regard to Starbuck’ international goals? What are the key questions that must be asked once research has determined that the market is going to be profitable in a particular country? In terms of the HR domains discussed in Chapter 1, what answers are required before getting too far along in plans to open another location? Write down what you regard as the top five most important questions for which you need answers. Select a country that you believe would be a good opportunity for a Starbucks location. Then think about the variables you considered in selecting that country. Write down these variables. Starbucks is a company that has been founded, establishes, and altered based upon the United States of America standards. They have grown internationally in over fifteen locations. The growth of their company internationally is due to their specific business strategies and international partners. The three business strategies that Starbucks has is; Joint Ventures, Licenses, and company-owned operations. All three of these strategies benefit Starbucks in more than one way. It allows the company to keep growth within the company under a strong brand. It allows the company to cut cost for expansion, and it also helps the company to make sure all business ventures they embark upon are ones that will ultimately benefit the company. The most important strategy Starbucks has is Joint Venture. This particular strategy encompasses...
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...in depth how Schultz and his team saved Starbucks from near-collapse, by both executing a deep, comprehensive return to its core values and, at the same time, investing in a range of new products, customer experiences and organizational capabilities designed to make the company fit for enduring success in a turbulent global economy. Set against the backdrop of the Great Recession, the case also considers the impact of unprecedented important shifts in consumer spending and confidence as well as new competitive forces on Starbucks' transformation. The case concludes by examining Schultz's own leadership journey, the lessons he learned personally during Starbucks transformation, and how he is using these lessons-within Starbucks and on the national stage-to redefine the roles and responsibilities of a public corporation in the 21st century. Based on extensive interviews conducted with Schultz and other Starbucks executives conducted from 2011 to 2014, the case offers a range of vital lessons on leadership, organizational transformation, restructuring, strategy, innovation, entrepreneurial vision, and customer service. Identifying symptoms and problems Analysis of the environment (where applicable) Analysis of the organization Balancing is, cans and musts; What is the current strategy and how is it executed? The strategic problems. What should change? Developing recommendations Decisions and implementation Problem Starbucks is struggling to maintain customer satisfaction...
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...Environmental Factors and Marketing Decisions: Starbucks Starbucks has wide range of business activity. These activities allow the company to use numerous channels of product distribution. With the company operating in many locations worldwide environmental factors play a major role in marketing decisions. Each distribution channel is affected differently and the company's flexibility in the marketing plan allows the company to adjust their strategies to meet the needs of the environmental factors. Starbucks is known as the premier company of the finest coffee in the world. They purchase and roast high quality whole bean coffee, sells them with fresh, rich-brewed Italian style espresso beverages, pastries, confections and coffee-related accessories and equipment. Starbucks provides a work environment treating others with respect and dignity. The company embraces diversity as an essential component in the way Starbucks does business. Starbucks also applies the highest standards of excellence to the purchasing, roasting and fresh delivery of their coffee. Starbucks believes that the company should enthusiastically satisfied customers all the time and contribute positively to our communities and our environment and recognize that profitability is essential to our future success (Starbucks.com, 2008). Starbucks owns and operates its own facilities, warehouses, and retail stores giving the company control of product design, shipping, and receiving. The company's strategy...
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...STARBUCKS IS COMING TO INDIA INTRODUCTION As we all may know, behind any successful achievement, there is a long story of withstanding hardship and endeavouring persistently behind any success. The Starbucks’ case of successfully bringing the brand into the Indian market is one example. This paper is to study the (3) reasons why Starbucks International decided to expand its market scale internationally and to figure out the initial criteria required for Indian Market. This is also to analyse appropriate circumstances at that time for Starbucks to be able to earn its foothold there provides us with valuable business guidance. Besides, this study by pointing out key factors which lead to Starbucks’ success in launching its brand in India demonstrates how Starbucks applied sustained competitive advantage and dealt with obstacles during the launching period, which created significant courage for Starbucks International to move next steps to fulfil its ambition for international expansion. COMPANY’S OVERVIEW Founded in 1971 in Seattle, Starbucks was started as a store to roast and sell coffee bean by three partners. Its name and logo were named after the famous novel Moby Dick. In 1987, Howard Schultz who is currently the company’s CEO acquired Starbucks and single-handedly converted it into a national, publicly owned company. Having more than 11,000 stores in 36 countries worldwide and over 10,000 employees in 2006 (Case Study), the company grew to about 17,000 stores (starbucks...
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...Environmental 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...
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...Starbucks History Starbucks Coffee Company (Starbucks) was founded in 1971 by Jerry Baldwin and Gordon Bowker. At the time, the concept of selling coffee drinks and fresh-roasted whole beans in a specialty store was revolutionary. Howard Shultz and David Olsen purchased Starbucks in 1987 for $3.8 million. By 2004, Starbucks has grown to more than eight thousand locations worldwide. Strategy Starbucks strategy is that they are absolutely dedicated to brewing the finest coffee in the world, while maintaining their incentives to grow. Starbucks believes that in order to build respect and confident with customers, they must build respect and confidence with the employees first. The company is not only about coffee, but also about the experience created in the stores and in the company. Also, Starbucks persists to be profitable and it is. They live by a strict, slow growth policy completely dominating a market before setting its sights further abroad. As a supplement tot the growth provided by new outlets, Starbucks tried out new concepts in their store but the management felt that it took away from their core business. In 1994, Starbucks introduced a drink called Frappuccino, a cold coffee drink. Through a joint venture with Pepsi, a grocery-store version was marketed. International expansion to Japan and the UK As Starbucks was reaching the point of saturation in North America, the firm set its sights on overseas expansion. In 1996, Starbucks opened its first Japanese...
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...benchmark 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...
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...STARBUCKS HISTORY As with any corporation in America or throughout the world, Starbucks started out as a dream or a vision ready to be delivered to the world. Starbucks was born in the early seventies (Starbucks, 2005). In 1971, three friends, Jerry Baldwin, Zev Siegel, and Gordon Bowker got together on numerous occasions to discuss what type of business would be successful during their time. During the early 1960s coffee was a major success in the US Market; however, overtime the popularity declined due to the dreadful taste of the coffee. Jerry, Zev, and Gordon together had the opportunity to travel to Europe where they had the chance to indulge in the dark, rich coffee made there. It was not until Jerry visited a coffee store in Berkley, California that he was reminded of their trip to Europe and of the luscious coffee there. Moreover, this convinced the three friends that they should embark in opening a gourmet coffee shop. The three friends followed the appropriate procedures for establishing their vision. When asked to for the name of the company they were unsure and deliberated for names. They finally agreed to name the shop after Seattle’s seafaring heritage, Starbucks. However, it was also said that they named it after the coffee loving first mate Herman Melville’s Moby Dick (Starbucks, 2005). Starbucks was no longer a dream or an idea but an organization in the making. By the 1980s, four stores were up and successfully running in Seattle. It was...
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...Analysis of international operations of Starbucks company. 1. Provide brief examples of strategies at the level of business unit implemented by this firm over last five years. Throughout the startup of Starbucks with the CEO, Shultz, the focus has always been on the people. The strongest strategy to surround himself with good people and not to compromise. This strong belief in his people and the promise of good benefits and stock programs, was a well calculated and well-reasoned business decision early on (www.umsl.edu). It was Shultz’s belief that it was better to give the employees a sense of loyalty so that they can train newcomers and become veterans who can train the next round of newcomers…thus saving the turnover that many of the fast restaurants and small shops experience. CEO Shultz’s belief to “Pour your heart into it…one cup at a time” brought in the introduction of lattes and cappuccinos. The business strategies for product branding and product differentiation, price competiveness, and offering the Starbucks store card that will allow for rewards for being a customer…all provided uniqueness and growth for the store. Increasing multiple stores in same communities created storefront advertising and brand awareness, while saving advertising costs elsewhere. Where most stores will segregate themselves from region to region, this strategy proved strong in putting the Starbucks presence around every corner. Core strengths carried on from earlier Starbucks business plans...
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...STARBUCKS HISTORY As with any corporation in America or throughout the world, Starbucks started out as a dream or a vision ready to be delivered to the world. Starbucks was born in the early seventies (Starbucks, 2005). In 1971, three friends, Jerry Baldwin, Zev Siegel, and Gordon Bowker got together on numerous occasions to discuss what type of business would be successful during their time. During the early 1960s coffee was a major success in the US Market; however, overtime the popularity declined due to the dreadful taste of the coffee. Jerry, Zev, and Gordon together had the opportunity to travel to Europe where they had the chance to indulge in the dark, rich coffee made there. It was not until Jerry visited a coffee store in Berkley, California that he was reminded of their trip to Europe and of the luscious coffee there. Moreover, this convinced the three friends that they should embark in opening a gourmet coffee shop. The three friends followed the appropriate procedures for establishing their vision. When asked to for the name of the company they were unsure and deliberated for names. They finally agreed to name the shop after Seattle’s seafaring heritage, Starbucks. However, it was also said that they named it after the coffee loving first mate Herman Melville’s Moby Dick (Starbucks, 2005). Starbucks was no longer a dream or an idea but an organization in the making. By the 1980s, four stores were up and successfully running in Seattle. It was...
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...Situation Analysis: Company Starbucks is a leading international coffeehouse that was founded in the year 1971 and acquired by Howard Schultz, the CEO of the company, in 1987. It has shaped the American culture by altering what we pay for coffee, what we eat, where we meet and how people spend their time socially. It rose from a single location in Seattle to a multibillion-dollar enterprise that operated in more than 17,000 retail stores in fifty countries. Originally Starbucks only sold coffee beans and ground coffee and later on came up with prepared coffee, Italian-style expresso beverages, cold blended drinks, food items, premium-teas, and beverage-related accessories and equipment. However, as the brand moved into new markets because of its aggressive growth strategy, its activities in the retail coffee shops were weakened and this made it more vulnerable to competitive threats from both higher as well as lower quality entrants. Therefore, it had to make decisions on vertical integration related to its expansion into the Consumer Packaged Goods domain. Collaborators The first product of Starbucks was sold through mass distribution channels such as Kraft, Dreyer’s and Pepsi. It also expanded product distribution through licensing agreements with United Airlines and Hyatt. Starbucks also expanded its retail stores. By 2008, 16% of Starbucks revenues came from sources other than the company-owned retail stores. Customers When Starbucks began in the early nineties, the...
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...Starbucks Corporation Summarize the overall strategy of Starbucks Management in its effort to create and develop a new concept and a rapidly expanding company. The overall goal of Starbucks Management was to create an American version of the Italian coffee bars that Howard Schultz had experienced first-hand in Milan. He believed that Starbucks should function as an important part of the community, as a meeting place for its customers. He wanted Starbucks to become an experience that would differentiate itself from its competitors. One of their key strategies in meeting this goal is a focus on customer service in order to create an experience for its consumers. Another one of their strategies is to ignite their emotional attachment with consumers. They also have a commitment to improving their business through better training, tools, and products and to give attention to store-level economics and operating efficiency. All of these are prongs to their strategy that will allow Starbucks management to turn Starbucks into a location where people don’t just go to grab coffee, but to experience the atmosphere of an Italian coffee shop. Another prong to their strategy is to offer many different products and to distribute them among a variety of distribution methods. Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates the competitive approach that Starbucks is employing? There are five generic competitive strategies that...
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