Starbucks International Operations

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.

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.

Starbucks is one if not the largest growing coffee shops in America. It has started a war on coffee. Starbucks has taken its franchise and expanded all over the world and really placing a Starbucks in just about every corner. It went back to its hometown and opened up a café. It happened right after Dunkin Donuts which was an England franchise and began advancing west and it now in three locations in Southern California. Dunkin Donuts opened up its store on Santa Monica boulevard in Los Angeles there was a mass of people lined up outside. McDonald’s, Dunkin Donuts and Starbucks have been fighting for the position for serval years and the battle is escalating fast.

I think Starbucks certainly is a force for globalization, and already is, with presence not just in North America but Canada, Japan, Britain, Thailand, etc and not just because it offers a product (coffee) that is known and sold around the world very well, so it is easier to reach customers because people are familiar with drinking coffee, as a part of the daily basis, and plus the idea of a coffeehouse, a place to go and spend some time with friends, or studying, or even for business meetings is also a hit in a lot of cultures, these are regular activities for a good amount of people, so the market is there, the coffee culture is already there too, Starbucks will have to analyze other type of situations like competitors, or purchasing power of the specific country to determine if

Starbucks first opened in 1971 in Seattle’s Pike Place Market. They came up with the name inspired by Moby Dick and the high seas that coffee trade was done over. In 1982 Howard Schultz was introduced to the company, and quickly joined the team. Schultz then traveled to Italy and was instantly inspired by the Italian cafes he visited. He wanted to incorporate the Italian coffee bars into the American markets by adding food to the menus, and providing a romantic setting for friends to meet at. Eventually his ideas took form and the brand Starbucks became what it is today. They tested this idea by selling espresso at their locations and the business took off. At the end of 2014 Starbucks had 21,366 stores worldwide and they continue to be a major name in the coffee and food industry. Although different competitors have risen in the market, Starbucks still remains strong with a competitive advantage to most.

In 1992 the company had $100,000 in savings and The coffee brand was successful, but still relatively small. After going public the company started focusing on the expansion of the brand. Starbucks had 140 stores located in the Northwest and Chicago. Ten years later, in 2002, Starbucks had over 4500 stores I the U.S. and internationally. During that time Starbucks had healthy financial growth and solid earnings and return, while still in their fast-growth stage. The company has managed to continue healthy operations while generating enough public funds to finance

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).

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

However, management at Starbucks saw a perfect opportunity to go into a market that had not been tapped into yet. With that in mind, they decided to add products to their menu that were not available to the American market and that catered specifically to the local culture. In addition they expanded their line of tea. By associating with a local company, they penetrated the Hong Kong market with great success.

Threats to Starbucks include the entry of new competing gourmet coffee providers, the increasing overhead costs, and the ongoing sluggish economy. The success of Starbucks has garnered many admirers and competitors. Because the barrier to entry is relatively low, many coffee companies are copying and competing with Starbucks, such as Coffee Bean and Tea Leaf, Seattle’s Best Coffee, and even McDonald’s Cafe. In addition, the increasing overhead costs and the sluggish economy further negatively impact Starbucks’

There are many opportunities for Starbucks to succeed in their industry. These opportunities include expanding of product offerings, entering foreign markets, and brand awareness. In expanding of product offerings, we have seen Starbucks

A. Many people would assume that Starbucks has reached, or is fairly close to its saturation point. In just about any city, suburb, train station, or college campus, there’s a Starbucks location to meet coffee drinkers needs. With Starbucks expanding, a likely investment would be to continue expansion worldwide. Not only should Starbucks concentrate on expanding its footprint, but also continue to alter its stores. Rather than opening more dine-in restaurants, Starbucks should concentrate on drive-thrus in urban and suburban areas.

Prior a company operates in a nation the market, trade cycles, disposable income, tax regulation and exchange rates must be addressed. Per Starbucks fiscal 2017 report the 72% percentage Starbucks revenue come from North American. However, a high percentage of Starbucks profit come unusual regions. This issue came present risk to Starbucks in the future when the generating revenue highly depended on the economic state of a country. Therefore, Starbucks has been more focus on expanding in Europe, Middle East, Africa and the central Asia Pacific markets to ease on the North American Market ( Starbucks

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.