Starbucks's International Strategy
Introduction
Coffee, initially only consumed by the upper class of society, was perceived as a luxury and only consumed within special coffee bars hidden in the shadows of western society, the first organisation which brought coffee outside of shadows and into the limelight was Starbucks during the later twentieth century. Even now, the company has evolved to be a household name and transformed the commodity of coffee from a luxury into an upscale culture phenomenon.
The very name Starbucks is practically synonymous with coffee. As opening the first location in 1971 in Seattle’s Pike Place, nowadays, Starbucks has become the largest specialty coffee store, with nearly 16,000 stores and more than 170,000 partners (employees) in 44 countries (Starbucks, 2007), and has already gone public in American and Japan market. Since 1992, its stock has risen a staggering 5,000 percent. The success of Starbucks lies in its ability to create personalized customer experiences, stimulate business growth, generate profits, energize employees, and secure customer loyalty-all at the same time (Machelli, 2006).
For Starbucks, their knowledge of where the finest coffee beans are grown, the knowledge of how best to prepare them in order to make the best cup of coffee and also the knowledge of how best to approach a foreign market as, of their industry competitors, they are the most successfully globalised. In this report, by implementing the PESTLE and Port’s Five Force analysis, to evaluate the international business strategy of Starbucks, compare to other company’s international strategy, and finally give some recommendations for improvement and development.
Literature Review
For over decades, globalization has been a key factor in decisions by many organizations seeking expansion and high profits (Allen and Raynor, 2003). Many corporations put their strategies around the assumption that will bring more opening of national markets, more cross-border capital flows, and
Coffee, initially only consumed by the upper class of society, was perceived as a luxury and only consumed within special coffee bars hidden in the shadows of western society, the first organisation which brought coffee outside of shadows and into the limelight was Starbucks during the later twentieth century. Even now, the company has evolved to be a household name and transformed the commodity of coffee from a luxury into an upscale culture phenomenon.
The very name Starbucks is practically synonymous with coffee. As opening the first location in 1971 in Seattle’s Pike Place, nowadays, Starbucks has become the largest specialty coffee store, with nearly 16,000 stores and more than 170,000 partners (employees) in 44 countries (Starbucks, 2007), and has already gone public in American and Japan market. Since 1992, its stock has risen a staggering 5,000 percent. The success of Starbucks lies in its ability to create personalized customer experiences, stimulate business growth, generate profits, energize employees, and secure customer loyalty-all at the same time (Machelli, 2006).
For Starbucks, their knowledge of where the finest coffee beans are grown, the knowledge of how best to prepare them in order to make the best cup of coffee and also the knowledge of how best to approach a foreign market as, of their industry competitors, they are the most successfully globalised. In this report, by implementing the PESTLE and Port’s Five Force analysis, to evaluate the international business strategy of Starbucks, compare to other company’s international strategy, and finally give some recommendations for improvement and development.
Literature Review
For over decades, globalization has been a key factor in decisions by many organizations seeking expansion and high profits (Allen and Raynor, 2003). Many corporations put their strategies around the assumption that will bring more opening of national markets, more cross-border capital flows, and