Channel Strategy: Starbucks
Evaluate 7.1
Short Paper: Channel Strategy—Starbucks Corporation
Kathleen Litman
INT 640—Multinational Marketing Strategies
Professor Michelle McKeogh
February 26, 2012
Overview—Starbucks Corporation
According to Starbucks’ 2011 Annual Report, the company is the premier roaster, marketer and retailer of specialty coffee in the world, with over 17,000 stores in more than 55 countries, as of fiscal year 2011.
2011 was an important year for the company in that it celebrated its 40th anniversary (it was founded in 1971 in Seattle, with its first store in the historic Pike’s Place Fish Market) and also enjoyed one of its best years ever in terms of financial performance, with global revenues reaching $11.7 billion, an 11% same-store increase over 2010 for the company overall, with global sales (over the same period) rising more than 8%. CEO Howard Schultz noted that these impressive results were achieved during a time of dramatically rising commodity prices, including coffee, as well as a continually weak economic environment around the world, particularly in Europe and the U.S. Due to the company’s strong performance over the last several years—a time during which time Howard Schultz instituted a dramatic turn-around strategy to cut expenses, close non-performing stores and pull back on some of its peripheral brand extensions like music and food—Starbucks is bullish on its prospects for future growth, particularly in foreign markets, where it plans to open 800 new stores in 2012, including its first-ever in India, where it is partnering with Indian conglomerate Tata.
Starbucks began its strategy of expansion abroad in 1987, when it entered Canada. Its first foray into a foreign market outside of North America was in Japan in 1996, where it has opened—as of 2011—its 900th store. The company reported that its international operations accounted for 22% of its overall revenue in 2011.
As its core product, Starbuck sells high quality, whole bean coffee,
Short Paper: Channel Strategy—Starbucks Corporation
Kathleen Litman
INT 640—Multinational Marketing Strategies
Professor Michelle McKeogh
February 26, 2012
Overview—Starbucks Corporation
According to Starbucks’ 2011 Annual Report, the company is the premier roaster, marketer and retailer of specialty coffee in the world, with over 17,000 stores in more than 55 countries, as of fiscal year 2011.
2011 was an important year for the company in that it celebrated its 40th anniversary (it was founded in 1971 in Seattle, with its first store in the historic Pike’s Place Fish Market) and also enjoyed one of its best years ever in terms of financial performance, with global revenues reaching $11.7 billion, an 11% same-store increase over 2010 for the company overall, with global sales (over the same period) rising more than 8%. CEO Howard Schultz noted that these impressive results were achieved during a time of dramatically rising commodity prices, including coffee, as well as a continually weak economic environment around the world, particularly in Europe and the U.S. Due to the company’s strong performance over the last several years—a time during which time Howard Schultz instituted a dramatic turn-around strategy to cut expenses, close non-performing stores and pull back on some of its peripheral brand extensions like music and food—Starbucks is bullish on its prospects for future growth, particularly in foreign markets, where it plans to open 800 new stores in 2012, including its first-ever in India, where it is partnering with Indian conglomerate Tata.
Starbucks began its strategy of expansion abroad in 1987, when it entered Canada. Its first foray into a foreign market outside of North America was in Japan in 1996, where it has opened—as of 2011—its 900th store. The company reported that its international operations accounted for 22% of its overall revenue in 2011.
As its core product, Starbuck sells high quality, whole bean coffee,