Seattle-based Starbucks is the world's largest seller of premium-brewed coffee with over 8,400 stores, including 2,000 stores spread in 31 foreign countries. Starbucks used an international strategic approach to achieve its high level of international development across the globe. Starbucks built an outstanding competence in the management of retail outlets, selling high volumes of premium coffee-based drinks. The company is expanding outside the U.S. by replicating its business model in order to reach a global market. In this study we will explain how Starbucks built this core competence, and how it applied its model abroad in order to meet a global expansion.
[...] To sustain its growth and expansion, Starbucks is following a strategy of innovation in order to create new products, attract new customers and to make old ones come back (Juniper and Moore, 2002). As a follow up of this activity, in 2002, Starbucks launched its Crème Frappuccino, the company's first non-coffee blended drink. The Frappuccino was extremely important for the long-term development of the Frappuccino brand, representing a tremendous way in order to reach non-coffee drinkers. Through an acquisition, the company introduced a range of Ice blended Teas (Starbucks website). [...]
[...] (2005) “Starbucks: More than a Cup of Coffee”. Cornell Hotel and Restaurant Administration Quarterly Theodore, S. (2002): “Expanding the coffee experience”. Beverage Industry Anonymous (1996): “Starbucks - investing in people as a route to profit and growth. International Journal of Retail & Distribution Management MacLean, B. (2007) Starbucks: Building Relationships with Coffee Growers Global Business Today - Interactive resource Video (highered.mcgraw- hill.com) McGraw-Hill Online Learning Center Juniper, C. and Moore, M. (2002): “Synergies and Best Practices of Corporate Partnerships for Sustainability”. International Journal of [...]
[...] The marketing and sales are creating and recreating the value of the brand, and have been successful in creating a global, well-known brand, which thus allows the company to charge higher prices. The customer service can be assimilated as the unique ambiance created within the store, which is strictly replicated all around the globe. Secondly, we need to look at the support activities. The human resource function helps create value in many ways, notably by making all the employees involved and dedicated to the profitability of the firm. [...]
[...] These aspects are the most relevant ones in the analysis of Starbucks' international strategy, and hence will be focused on. Howard Schultz (Harrison et al., 2005), chairman and Chief Strategist Officer says, only sustainable competitive advantage is the quality of our workforce. We're building a national retail company by creating pride in and providing a stake in the outcome of our labor”. The packages of benefits that are enjoyed by the employees at Starbucks are multiple: health care, stock options, training programs, career counseling and product discounts for all workers. [...]
[...] Sustained relationship with beans farmers One of the biggest issues that Starbucks has to deal with was the need to be consistently supplied with premium coffee beans for its roasters, in order to provide the best quality to its customers. As the coffee industry is a very volatile market, Starbucks wanted to secure its input at a regular price. Following this, Starbucks achieved to establish long-term contracts with small growers of high quality coffee, lasting between 2 and 5 years. [...]
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