Starbucks and Cultural Distance

For my ethnography project, I decided to observe the Starbucks on Rockside Road in Independence, Ohio. My plan was to observe the subculture of Starbucks’ customers. A subculture is defined as a “structured social inequality or, more specifically, systematic inequalities between groups of people that arise as intended or unintended consequences of social processes and relationships.” My question was twofold. Does Starbucks appeal to certain social statuses? And if so, does Starbucks serve as another example of social inequality?

I chose to do the Starbucks Ethnography over all of the other options because Starbucks currently plays a large role in the social behaviors of today’s society. It has grown significantly from when it was first founded and is currently dominating the coffee market worldwide. Starbucks has become a social and cultural phenomenon because, “...it is at once a globalized consumer institution and a local place in which the mundane daily activities of sipping coffee, writing in journals, and conversing with friends are practiced” (Dickinson 7). Since I am in the age group that Starbucks is particularly trendy with (young adults), I already have some expectations for what the results of the ethnography will be. I have also lived in Orange County for my entire life, so I had some context as to which race would be more prevalent to the Starbucks I had gone to. I wish to explore the symbolic anthropology, which, “...focuses on understanding cultures by discovering and analyzing the symbols that are most important to their members” (Nanda 35). Understanding the symbolism behind coffee and Starbucks is important since it has multiple meanings and has become deeply ingrained within our culture.

Starbucks should be aware of the cultural differences regarding the type of services provided and the quality of the products (example Starbucks should considered what type of food should be serve as example exclude the pork from the menu in Muslim countries were prohibited like in Saudi Arabia)

Starbucks is no doubt a phenomenon in the United States, but the brand wants to expand globally. Opening chains in various global locations such as Japan, Vienna, England; Starbucks wants to reach out to the coffee loving fans everywhere. Nevertheless opening chains globally is not that simple. There are many uncontrollable factors Starbucks need to focus on to make sure they are making profit as well has abiding by the country’s laws and regulations. Going global takes a lot of market research to make sure that the brand will be successful even with uncontrollable factors. Controllable factors can be tailored to fit the needs of each country. Starbucks has to find the happy medium so they don’t lose their identity overseas.

People in North American countries are privileged enough to be able to express their religions in public places such as a coffee shop. Some of them are ignorant enough to think that a coffee shop not putting Christmas decorations on a cup is war on Christianity.

Many multinational corporations in the coffee industry have succeeded tremendously such as Starbucks. Each of these corporations has strategies that helped them continue to expand to nations of different cultures, ethnicities, governmental practices, and locations.

1. Where did the original idea for the Starbucks format come from? What lesson for international business can be drawn from this?

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

Even so, just two weeks earlier Howard Schultz announced that the company will be expanding internationally. The plan is to open more than 1500 stores in Germany, France, and Britain over a 3-year span (Forbes, 2008). It is estimated that this expansion will boost revenue by more than 20 percent (MSN Money, 2008). In spite of Starbucks’ struggle among its love-hate relationship between customers and protesters, one thing that Starbucks

Four million people worldwide make their daily stop at Starbucks in the desperate need for a coffee fix, just don’t forget to ask them to hold the side of exploitation, modern slavery and deforestation.

This case study gives an overview about Starbucks International Operations. It will explain how Starbucks expanded outside US and the strategies they adopted to give tough competition to its international rivals.

Many coffee companies are currently in the market, making competition fierce. Although Starbucks has a strong reputation in North America, direct and indirect competitors still pose a threat. To establish market niche, competitors use location,

Following its success in the United States, Starbucks ventured overseas and quickly became a globalization icon. With its rapid globalization strategy, Starbucks expanded from about 5000 stores to an estimated 15,000 stores in 2000 (Groth, 2011). By mid-2000s, Starbucks’ supply chain faced many issues, resulting with challenges of having to fulfill expansion strategies yet minimizing escalating operation expenses. By 2008, Starbucks’ stocks fell by 42% (Schultz, 2011). The rapid expansion took a toll on the sales growth and stretched the limits of the existing supply chain, which then rippled down to erode the customer-valued ‘Starbucks experience’ (Gibbons, 2011).

Factors in the global environment provide both opportunities and strengths for Starbucks. Opportunities such as increased revenues, further expansions, and achieving their goal of becoming the most respected brand worldwide. Starbucks also faced threats. These threats include dealing with growing antiglobalization overseas and their huge risk of less return on each overseas store, this deriving from overseas operations being run by local partners instead of Starbucks

Starbucks’ retail entry model in the United States does not have the same strategy as their international model. In the states Starbucks holds great control as a corporation, but in international territory, country partnerships, cultural, government laws and politics play a very important role in Starbucks’ entry strategy. Starbucks has set it sights globally since the coffee market has come close to saturation in the U.S. which will give them the opportunity to continue to expand without fierce competition. Starbucks has looked to countries like India and other emerging markets with great growth potential to set down new roots. Starbucks recognizes India as a great choice to expand business internationally but also recognizes the complexity in the same market after several attempts to enter without success.