Starbucks: International Retail Strategy

Starbucks Corporation is a coffeehouse chain that began in Seattle in 1971. Since that time, Starbucks operations have grown; there are now over 22,000 retail stores throughout 67 countries. Starbucks strives to offer customers a comfortable, “home-like” environment while remaining conscious of ethical behaviors and social responsibility. It can be argued that Starbucks dominates the coffeehouse market, and much of this may be due to a grand strategy with a focus on growth. Using a growth strategy, Starbucks attempts to increase its market share and revenues by increasing the number of its stores and the number of locations it serves. So far, Starbucks has enjoyed much success with this strategy.

Starbucks is one of the leaders in coffee industry. Starbucks has entered into many new markets and today it has more than 16,000 outlets across the globe (Johnson, Scholes and Whittington 2011). Due to unlimited business opportunities, Starbucks Corp has set strategies to enter India as it is next major hub for development in near future. Previously Starbucks has gained wide success in China and Japan due to high consumption of coffee and tea. Since its inception, Starbucks has tapped the major markets across the world, India was left untapped. In India, Starbucks has setup alliances with TATA Global Beverages which is a unit of TATA Group of Companies. Starbucks along with TATA has started with an investment of $80 million and plans to open 50 coffee shops in a year. Currently few coffee shops has been setup by Starbucks, however in near future, it is expected that the company will achieve its target in capturing Indian market (Lamb2009). Thus, besides sourcing coffee beans from TATA, Starbucks can now explore more Asian markets (Hitt, Ireland and Hoskisson 2012).

Starbucks is a corporation well known for roasting, marketing and retailing of crafted quality beverage that is based on coffee. Starbucks started its operations in Seattle’s Pike place market with Howard Schultz helping in its marketing and retailing efforts. The company is extremely successful and focused on the development of positive company-customer relationships. Starbucks uses company-customer relationships and a customer-centered approach as its key business strategy. The customer-centered approach allows the company to maintain its current position in the market.

This paper discussed about the Starbucks Corporation, the Mission and Vision statement of the Starbucks Corporation and the strategies formulated and implemented by Starbucks in maintaining competitive edge over its competitors. It also discussed about problems recently faced by Starbucks and recommendations to solve the problems and strategies for potential development of Starbucks in near future.

Starbucks forms licensing agreements with the majority of their foreign retail stores to collaborate and develop international partnerships with brands that have a solid position in the overseas market. Starbucks has 698 company-operated stores and 1743 licensed stores in 39 countries in Europe, Middle East, and Africa (EMEA) regions. In the China/Asia Pacific (CAP) regions, Starbucks spans across 15 countries consisting of 2542 company-operated stores and 3201 licensed stores. China alone has 2000 stores and Starbucks projects a growth of 500 additional retail stores per year over the next five years. The acquisition of Teavana Holding, Inc. in 2012 has become a prosperous venture capital investment and Starbucks strategy is to extend Teavana into Europe and China/Asia Pacific markets. Starbucks plans to enter their most intimidating market, Italy in 2017. Will the Italian coffee market be a challenge for Starbucks Corporation or prove a positive economic venture for the company?

This paper is structured around the Eclectic Paradigm (OLI Framework) and incorporates a PESTLE analysis and attempts to bring out the major areas of concern for Starbucks Corporation in order to enter the India market. Although, the FDI regulations and legal requirements have been reformed over the last couple of years and doing business in India is gradually improving, it seems that Starbucks needs to focus its attention more towards the economical and socio-cultural areas rather than the political and legal aspects of the business environment in India. OWNERSHIP SPECIFIC ADVANTAGES The Starbucks brand has become almost synonymous with coffee all around the world and the same is the situation in India even though India does not have a single Starbucks outlet. Having opened its first store in 1971, Starbucks has been highly successful in starting a cult following that has put the Starbucks brand at a level higher than just a coffee shop. The passionate staff and their unique blends of the best coffee beans have propelled Starbucks as a way of life in many parts of the world. The vision created by Howard Schultz, the President and CEO of Starbucks, has resulted in over 16,000 stores adding almost 1500 stores in the last one year (Starbucks Corporation, Annual Report, 2008). The company

I. The company that I will be working on is Starbucks. The company's business is based on coffee. The core business is in the quick service food sector, with a coffeeshop focus. QSR Magazine ranks Starbucks as the 3rd-largest firm in the US in the industry, and the largest with a coffee focus. The company also has retail and institutional businesses, marketing coffee in a variety of formats both to consumers via grocery outlets and to hotels and other institutional buyers.

One of the opportunities presented to Starbucks is the growth in coffee market. In the United States, specialty coffee sector accounts for approximately 15% of the total retail coffee market which is equivalent to $21billion. In 2005, the retail coffee market was valued to be around $23billion and specialty coffee accounted for nearly 45% of the market and was still expected to grow. Starbuck has a 40% market share in the specialty coffee sector which provides an indication that anticipatory growth in the following category will provide Starbucks with opportunity to expand and grow in the US. Furthermore, Starbucks has the opportunity for major expansion in to Asia Markets such as China. Starbucks plan to focus on

The company has the opportunity to expand its global operations. Significant opportunities exist, especially outside domestic US market for joint ventures. Starbucks could overcome planning boundaries; reduce costs through co-locating at supermarket chains, pubs & restaurants. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

Nevertheless, Starbucks wanted to expand their market. Their first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc.  This joint venture was divided in half between the two companies. In order to replicate the experience without losing their competitive advantage, the Starbucks format was then licensed to the venture. To ensure that the Starbucks experience in Japan was duplicated properly, Starbucks actually transferred some of their employees to their Japanese operations. Many critics did not feel that Starbucks was capable of duplicating their experience into foreign countries. However, by the end of 2009, Starbucks had

The technological advances is the opportunities of Starbucks which is has application of Starbucks that easy process for customer to the reward for those is loyalty or may be customer want look what new information or new things that Starbucks have because nowadays majority have smartphone and easy for them by using the mobile application. Next, new distribution channel is Mobile pour is the beta version of a delivery system that has introduced by Starbucks. Brand extension is one of the Starbucks opportunities that has venture into product diversification to make sure their product or brand always dilution risk in check and Starbucks also can extend into horizontal lines of its business because they have brand image strongly. Emerging international markets that can expansion, in the further expanding into emerging and developing market that Starbucks has an excellent in growth potential. Starbucks as joint venture entry in India that has list it because Starbuck has good inroad to other country that they had made. They can make their market share stronger that have opportunities to develop their experience, size, efficiencies and powerful of financial. Other opportunities is they have new products that are not only sell the coffee drinks, they have also doughnut, muffin, mug and etc, and they have opportunities with distribution agreements and can continued domestic expansion of domination of

This piece of work aims to analyse and evaluate areas of strategic management relating to global coffee chain Starbucks. The strategic analysis will discuss various areas including that of market, industry and business strategies performed throughout Starbucks as a whole with a view to determining overall performance outcomes.

Starbucks is ensuring that its marketing strategy never goes too far outside it 's culture. Composed of two key points. The first key point is Starbucks ' image. When an individual walks in to Starbucks, there is a friendly face to greet customers, color scheme is very cool and earthy, and same thing goes for smell too. Starbucks is ensuring that customers feel relaxed and comfortable in the coffee house. The second key point is the individual himeself/herself. According to Starbucks, individual is its culture. That is why Starbucks knows how to reach out to their customers. It may be through mobile phone application, website, or in-store.

Companies are continuously translating their policies according to the rules and regulations of each country that they operate in. For instance, American company Starbucks which is coffee house chain, which is producing goods like; coffee, beverages, tea, smoothies, and baking goods. Jerry Baldwin founded Starbucks. Starbucks revenue is$16.447 billion. Starbucks continues its legacy as a global brand, but prior to launching stores of Starbucks in new countries, the purpose of any organization is to increase its profits and sales through satisfying the needs of its consumers. The escalating change in technology drastically affects the businesses of many organizations. Due to stiff and cutthroat competition, the companies that did not enhance their business functions with the rapid change in technology may be easily wiped-out from the market. Localization is the process of modifying the features of the product according to the language, culture and taste of the desired population. This strategy is also known as adaption strategy. The concept of globalization has originated from the word “Global” in which, people from different social, cultural and economical backgrounds live together. During globalization national boundaries are reduced, which results in a larger customer base for companies and hence, an increased revenue and profits. The marketing strategy of an organization is a comprehensive plan that encompasses overall market goals. A good marketing strategy can be

This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.