Starbucks International Operations
CASE ANALYSIS
STARBUCK’S INTERNATIONAL OPERATIONS
Course Name: Business Policy Seminar
Course Number: MGMT - 690
Submitted By: Emaan
Date: 14th November 2010
INTRODUCTION:
Starbucks is one the most successful companies in the United States, which is evident by the fact that it is among the FORTUNE 500 Companies. However, over the last few years its profitability has declined owing to decline in Starbucks international sales and increased operational costs. The Chairman of Starbucks is a man who made this company what it is today so there seems to be a one-person decision making in the international expansion of the company.
Each country in which a company operates represents a unique environment with a different set of economic, technological, political, and sociocultural variables for the company to face. What seems to be the problem with Starbucks is that its international expansion policy was too aggressive and did not really take into account the differences between countries. Around the world, Starbucks is not sensitive to the feelings and demands of the local people who are the actual customers. The company’s belief that what works in America will also work in other countries of the world, is not correct just because people want to experience the American lifestyle.
ISSUE WITH STARBUCKS
The Problem with Starbucks is that its top management went too aggressively on international expansion without considering the local demands with the belief that around the world they can sell the same “Starbucks’ Experience” at a high price.
In other words Starbucks did very well in its own country, but could not manage international expansion properly. Starbuck’s top management, specially the Chairman, is adamant on aggressive expansion without taking in view, different regional needs and values. He is expanding Starbucks around the world without making its outlets and products country- or
STARBUCK’S INTERNATIONAL OPERATIONS
Course Name: Business Policy Seminar
Course Number: MGMT - 690
Submitted By: Emaan
Date: 14th November 2010
INTRODUCTION:
Starbucks is one the most successful companies in the United States, which is evident by the fact that it is among the FORTUNE 500 Companies. However, over the last few years its profitability has declined owing to decline in Starbucks international sales and increased operational costs. The Chairman of Starbucks is a man who made this company what it is today so there seems to be a one-person decision making in the international expansion of the company.
Each country in which a company operates represents a unique environment with a different set of economic, technological, political, and sociocultural variables for the company to face. What seems to be the problem with Starbucks is that its international expansion policy was too aggressive and did not really take into account the differences between countries. Around the world, Starbucks is not sensitive to the feelings and demands of the local people who are the actual customers. The company’s belief that what works in America will also work in other countries of the world, is not correct just because people want to experience the American lifestyle.
ISSUE WITH STARBUCKS
The Problem with Starbucks is that its top management went too aggressively on international expansion without considering the local demands with the belief that around the world they can sell the same “Starbucks’ Experience” at a high price.
In other words Starbucks did very well in its own country, but could not manage international expansion properly. Starbuck’s top management, specially the Chairman, is adamant on aggressive expansion without taking in view, different regional needs and values. He is expanding Starbucks around the world without making its outlets and products country- or