Starbucks International Expansion

The Original Store Expansion Strategy: In 1992 and 1993 Starbucks developed a three-year geographic expansion strategy that targeted areas with favorable demographic profiles, that could be serviced and supported by the company's operations infrastructure. A large city was selected to serve as a focal point for each targeted region. Starbucks professional teams were strategically positioned at these focal points to supervise opening of another 20 stores in each city in the first two years. Following focal point successes additional stores were opened in smaller surrounding areas. Zone Vice presidents with extensive experience in chain-store retailing were in charge of expansion process locally. In 1995, new stores generated an average of $700,000 in revenue in their first year, far more than the average of $427,000 in 1990. Success could be assigned partially to growing reputation of the brand, and successful identification of top retailing sites for stores. b) Details of International Expansion:

In 1998, SCI had 12 retail stores in Tokyo (Japan is the world's third-largest importer of coffee);

7 stores in Hawaii through partnership with The Mac Naughton Group, a unit of Hawaii-based investors. Because Hawaii is an integral part of the Pacific, it fit into Starbucks' strategy to expand internationally.

6 stores in Singapore, and 1 in the Philippines.

Taiwan and Korea Thailand, and New Zealand stores in 1998. The company and its licensees had plans to open as many as 40 stores in the Pacific Rim by the end of September 1998, with 200 Taiwan potential. The possibility of locating stores in Europe and Latin America was being explored.

257 international locations were opened by the end of 2000, including: 63 locations in UK, also in Lebanon, the United Arab Emirates, Qatar, Hong Kong, Shanghai, and Australia.

Retail location in Kuwait through an agreement with M.H. Alshaya Co. W.L.L. Kuwait. Kuwait will serve as the gateway into the rest of the