Starbucks: Going Global Fast

Starbucks was bought out by current CEO Howard Schultz in 1987. Since then, Andrew Harrer (2012) reports the company has grown to operate over “17,244 stores worldwide” (para. 1). Fortune (n.d.) reports in its yearly 100 Best Companies to Work for that Starbucks employs “some 95,000 employees”. From only a handful of stores in 1987 to a billion dollar franchise today, the success of Starbucks is due in great deal to their corporate culture, specifically how employees, or as Starbucks calls them, partners are treated. Joseph Michelli (2007) echoes this sentiment, “A great cup of coffee is only part of the Starbucks success equation” (p. 767).

CEO of Starbucks, Howard Schultz, originally had the idea that Starbucks would have the community/traditional feel in their stores, and still serve high-quality coffee (“Our Heritage” 1). Adding an Italian vibe to the coffee shops, keeping its

With the first coffee shop opened in Sydney CBD, Starbucks entered into Australian market in July of 2000 and then expanded rapidly to 85 coffee shops in the following years. However, in August of 2008, Starbucks Coffee Company Australia announced to shut down more than 60 of its 85 coffee shops and to date it has scaled down to 22 opened in Sydney, Brisbane, the Gold Coast, the Sunshine Coast and Melbourne (Starbucks 2010).

Quality of Coffee – Starbucks history has shown that they place a huge emphasis on product quality. Their coffee is notorious for satisfying customers with its rich, delicious taste and aroma. They strive to offer the best coffee to its customers even going to the producers themselves to ensure quality.

“Brewing Innovation,” an article by Shezray Husain, Feroz Khan, and Waqas Mirza in 2014 for London Business School, focuses on the history and outlook of a popular chain coffee shop, Starbucks. By discussing a brief history of the café brand and its rise and fall through the economic crisis of 2008, it was clear that the company managed so proficiently due to strategic moves made by leadership. The article explored how the company centered it focus on its consumers and building itself a priority spot in the community by utilizing customer opinions and social media. In fact, by doing so, the corporation not only survive the 2008 economic downfall, but thrived to become of the innovative leaders of the 21st century (Lemus, Feingenblatt, Orta, Rivero, 2015.)

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.

When one thinks of a global corporation, one thinks of a company who has got it together. They must right? How else could a corporation overcome transnational barriers and socio-cultural issues and still make a profit? Turns out not all global companies have this ability. Some do for the most part but are still vulnerable to mistakes. Such is the case with Starbuck’s failure in Australia. We will introduce you to the company, overview their history and expansion efforts, and explain in short why they failed miserably at something they have done literally thousands of times before.

Who hasn 't wondered into a Starbucks location, then left muttering: "I can 't believe I just spent six dollars for a cup of coffee"? Starbucks has built its reputation on serving quality coffee at a high price. It has positioned itself accordingly.

With the entry of Starbucks into the Chinese market in 1999, the company faced economic issues. In China, operating costs are higher than in the United States. This led to an increase in labor costs, which then offset the price of the drinks offered. The Chinese only about three cups of coffee annually, and the price of drinks Starbucks offered to the people was 50 to 70 percent higher than in the United States. Even with Chinese inspired foods and coffee-free beverages, the high prices made it hard to attract customers. With the

McDonald’s and Starbucks are two of the largest successful American companies operating in the global marketplace. Their popular iconic brands are recognized around the globe. Both Starbucks and McDonald’s face the challenging task of managing brand image in multiple locations. They must maintain the uniqueness that grew them to success, but also appeal to the desires of local populations. While there have been some ups and downs over the years, there are some similarities and differences in the ways these two megabrands have operated and found success.

When we make reference to weak points, it may be evaluated that Starbuck’s has affordable prices in supermarkets and also the truth that it only focuses on people more than 35 years old. Additionally, when the organization was established, the proprietors were living with the idea that they are the only people who can prepare fantastic coffee. As per Datamonitor (2011), Starbucks has been involved in different court proceedings, which taken overall provide a poor compliance function. For that reason in 2004, 2 of the company’s workers filled a lawsuit versus Starbucks telling that the organization moved into contradiction with the requirements of Fair Labor Standards Act or FLSA. While in October 2004, one more worker filled a lawsuit

With Starbucks being on basically every corner, it is hard for other coffee shops to come in and be competitive. Another ethical issue that Starbucks faces is their use of hormone-addled milk in their coffees (Ferrell, Fraedrich, & Ferrell, 2015). With all of Starbuck’s unethical aspects and criticisms of their company, they are well-known for their ethical values. One of their top ethical attributes is their employee relationships. Their employee relationships with the company are what Starbucks is known for if you work for them. Starbuck’s offers their employees top healthcare and benefits. Naturally, their employee turnover rate is not high, and as I stated before, they are one of the top companies to be employed

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.

1. What factors in the global environment provide opportunities or threats for Starbucks? How do Starbuck’s strengths and weaknesses match up to its opportunities and threats?

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.