The question remains that with recent tensions between China and the U.S. many American businesses believe the Chinese government was backing the protest. However, even with the possible government intervention China still remains Starbucks number one market, outside the U.S., with close to 400 stores. Knowing the entry strategies and possible government involvement, let 's take a look at Starbucks potential future strategic factors. I believe Starbucks ' future in China is dependent on two factors, keeping the consumer interested in the Starbucks brand and sourcing their coffee from Chinese growers. The emerging Chinese coffee drinkers see Starbucks as a type of restaurant and with a cup of coffee costing as much as a days salary for many, this new trendy generation, much like the American yuppie, see these outlets as a place to show off their sophistication and hip western ways.
When it also comes to business level, large companies like Starbucks can effectively pursue Focus-Based Strategy in conjunction with cost leadership based strategy. Being a lower cost store will increase the difference between Starbucks and other known stores. At present, Starbucks competitors are attempting to specialize in the coffee business, therefore Starbucks must pursue focus strategy to increase its strength. Starbucks must also focus on Health Drinks, because Consumers are always progressively looking for the nourishment items that are common and natural on Health Drinks, Enlargement into the Corporate Market, and Market their brand more aggressively in order to convince people that they serve coffee that is superior to any other coffee being served in different shops. My suggestion for Starbucks is to enter new markets and while doing that they can use a combined joint venture and licensing strategy since it has been proven very effective for Starbucks in the past, and it minimizes
Target market: Adults Starbucks’ target market is men and women who are aged 25 to 40 years old. This group people contribute 49 percent to Starbucks profit. Among these ages, most customers are urbanites with relatively high income. Most of them have professional careers and more focus on social welfare. Also, these target customers are growing at 3 percent per year.
for one day in order to “perfect their espresso making ability” was the first thing Schultz did when he regained control of Starbucks, which leaded to the company loss of $6 million; however, Schultz answered, “How could it be wrong to invest in our people?” This day-long training first made a commitment to the training of staff at Starbucks. Full health-care benefits as well as equity in the form of stock options, in addition, had been continually offered to part-time and full-time workers. In 2009, it cost $250 million to run health coverage for staff. Notwithstanding, Schultz believed if he couldn’t invest in his people, they wouldn’t invest in him or Starbucks. With belief that if he couldn’t invest in his people, they wouldn’t devote to him or Starbucks, Schultz did not take away either option through the darkest days of Starbucks with satisfaction and respect from friends, senior staffs and stakeholders till the program
With over 27,000 locations worldwide, Starbucks has become a goliath in the commercial coffee market, with a revenue of $22.38 Billion in 2017 (Starbucks, 2017). The coffeehouse chain was founded in 1971 in Seattle Washington, starting with a single small store that embraced a community and friendly feel (Schultz, 2012.) Now in modern times, Starbucks still aims to have traits that match that original socially responsible mindset (Starbucks, n.d.). Corporate Social Responsibility (CSR) is a business entity 's capabilities to recognize/act on their effects on society, with the four main areas of CSR defined by (Carroll, 1991) as Economic, Legal, Ethical and Philanthropic (In descending order of importance.) Each year Starbucks produces a Global impact report (Starbucks, 2016), this voluntary report sets out the goals and CSR progress that the entity has made on those four areas.
Starbucks is a global company operating in coffee retail market since 1972 which sell premium coffee products. (Slide share) The first Starbucks opened in Seattle, Washington by three partners (Jerry Baldwin, Zev Siegl and Gordon Bowker). (Wikipedia) They were inspired by coffee roasting entrepreneur, Alfred Peet to sell premium coffee bean and equipment. (Wikipedia) The original owners sold the Starbucks chain to their former employee, Howard Schultz. (Wikipedia) Today, Starbucks is present in 66 countries and interiorities and has grown to become the world’s largest coffee house.
A 1995 partnership with Dryers created a new line of coffee ice cream under Starbucks names that was later disbanded in 2008. At this time the rights to manufacture, market, and distribute Starbucks ice cream was given to Unilever. In 1998 Kraft Foods began marketing and distributing whole bean and ground coffee to supermarkets in the US. Tazo Tea was acquired by Starbucks in 1999 and in 2005 they acquired Ethos Water. A partnership with Jim Beam Brands created Starbucks Coffee Liqueur in 2004 and Starbucks Cream Liqueur in 2005.
Starbucks has its very own advantage compared to his competitors because they possessed the technology and expertise in verifying the quality of their coffee beans are top-notch before they used it in their products (Figure 1.1). In addition, their product is mostly made of environment friendly ingredients such as reusable cup whereas most of the competitors could not achieve the recycling and reducing waste concept due to the high cost involved. Furthermore, Starbucks doesn’t franchise its stores to the private market. It’s simply because the mentality has a lot to do with maintaining high company standards from stores to stores (Bonander, 2007). Next, they offer specialty coffee selections, flavours, and variety.
Corporate Strategy: In the case of Starbucks the corporate strategy is unique amongst other companies in its industry that allows it to be differentiated and have a competitive advantage from their competitors and is précised best by Howard Schultz CEO of Starbucks, “We’re in the people business serving coffee,” high quality specialty coffee and related products in a European café environment. It can be seen that Starbucks is in a growth strategy employing three significant techniques that support its Mission. Business Strategy: The business strategy that Starbucks have executed by starting its own premium roasted coffee, along with freshly brewed espresso style coffee beverages, coffee accessories, a variety of pastries, and other products, in a coffeehouse setting. Starbucks operates a predominantly distinguished business level strategy concerned with high product development and proposing a 'premium'
STRATEGIC MANAGEMENT CASE ANALYSIS STARBUCKS COFFEE COMPANY: THE INDIAN DILEMMA SUBMITTED BY: AMAN AHMED ANSARI BS 393410 I. CURRENT SITUATION • Current Performance Profitable financials The best specialty coffee retailer in the world Starbucks serves more than 40million customers per week with 85% derived from retail itself There is a constant and continued increase in sales margins Had over 11000 stores in 36 countries and employed over 10000 individuals with 7600 retail stores in US (as of 2006) • Strategic Posture Mission “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” – 2013 Through this mission statement Starbucks hopes to nourish and maintain