Starbucks Coffee: Standardization and Adaptation Strategy
Starbucks Coffee: Standardization and Adaptation Strategy
Introduction
Starbucks’ Business Concept and History
When academics Jerry Baldwin, Zev Siegel, and Gordon Bowker established Starbucks Coffee Company in 1971, their vision of Starbucks was that of a local business specialising in “selling fresh roasted whole beans in ...specialty stores.” (Darguste et al., 2006 p.655). Fearing commoditization of the brand, the founders were opposed to the idea of broadening the appeal of Starbucks coffee.
Howard Schultz, a marketer who eventually acquired Starbucks in 1987, made selling brewed coffee to a wider market the bedrock of Starbucks (Darguste et al., 2006 p.655). The concept, “inspired by the Italian espresso bars,” transformed coffee from an ordinary beverage to a lifestyle product for the aspirational and discerning consumer.
Starbucks operates in Asia Pacific, Latin America, North America and Western Europe and according to Helliker and Ziobro (2010, p.25), “ of the roughly 16,700 Starbucks stores around the world, about 11,200 operate in the U.S”.
This report summarizes how Starbucks dealt with challenges such as cultural adaption, market entry strategies and brand identity as it expands internationally.
Analysis
Starbucks’ Decision criteria for Market Entry
Starbucks’ considered variables such as “economic indicators, size of the population, and ... joint venture opportunities” (Kotabe and Helsen 2008, p.284) to determine its market entry strategy. Singapore was preferred for its middle class’ value perception which suited Starbucks concept and coffee culture. In China, where the coffee drinking culture is still undeveloped, Starbucks hoped to benefit from “its first mover advantage, the large youth population and rising disposable incomes” (Euromonitor2009, p.7).
In addition, psychic distance and similarities of business culture to USA (Griffin 2008, p.58) played a part in considering some of the markets like UK and Canada. Japan,
Introduction
Starbucks’ Business Concept and History
When academics Jerry Baldwin, Zev Siegel, and Gordon Bowker established Starbucks Coffee Company in 1971, their vision of Starbucks was that of a local business specialising in “selling fresh roasted whole beans in ...specialty stores.” (Darguste et al., 2006 p.655). Fearing commoditization of the brand, the founders were opposed to the idea of broadening the appeal of Starbucks coffee.
Howard Schultz, a marketer who eventually acquired Starbucks in 1987, made selling brewed coffee to a wider market the bedrock of Starbucks (Darguste et al., 2006 p.655). The concept, “inspired by the Italian espresso bars,” transformed coffee from an ordinary beverage to a lifestyle product for the aspirational and discerning consumer.
Starbucks operates in Asia Pacific, Latin America, North America and Western Europe and according to Helliker and Ziobro (2010, p.25), “ of the roughly 16,700 Starbucks stores around the world, about 11,200 operate in the U.S”.
This report summarizes how Starbucks dealt with challenges such as cultural adaption, market entry strategies and brand identity as it expands internationally.
Analysis
Starbucks’ Decision criteria for Market Entry
Starbucks’ considered variables such as “economic indicators, size of the population, and ... joint venture opportunities” (Kotabe and Helsen 2008, p.284) to determine its market entry strategy. Singapore was preferred for its middle class’ value perception which suited Starbucks concept and coffee culture. In China, where the coffee drinking culture is still undeveloped, Starbucks hoped to benefit from “its first mover advantage, the large youth population and rising disposable incomes” (Euromonitor2009, p.7).
In addition, psychic distance and similarities of business culture to USA (Griffin 2008, p.58) played a part in considering some of the markets like UK and Canada. Japan,
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