Starbucks Case Study

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2011 was a lucrative year for Starbucks. Overall sales increased to $11.7B, there was a 22% increase in profitability, and its stock price increased 43%. How was this possible? Well, in 2011 there were approximately 17,000 stores open worldwide, and about 10,800 solely in the United States. Having more stores than ever provided Starbucks with more customers and supporters therefore, increasing sales. With the rising amount of customers in outside countries, Starbucks continued to gain worldwide recognition, also influencing on the major increases in sales, stock price, and profitability. Having worldwide recognition assisted in sales in some countries, has its advantages and disadvantages to Starbucks’ global expansion. The China market, for instance, is of great importance to Starbucks. Chinese customers, who traditionally drink tea, don’t seem to mind paying a relatively higher price for coffee. By drinking Starbucks coffee, customers in China feel it enables them to relate to a Western lifestyle. They want to live like those in the developed countries, and to them, drinking a cup of coffee that people in the U.S also drink helps them to fulfill that dream. Holding those white paper cups with the green logo on them gives them the illusion that they live better than those who don’t drink Starbucks. In my opinion, Starbucks should do reasonably well in India. The Indian economy is growing, and with its billion-plus population, there’s plenty of room for Starbucks. Another factor accounting for why Starbucks would do well in India is the country’s growing taste for coffee. If more people like coffee, the number of customers will increase. Europe, on the other hand, has had the complete opposite outcome with Starbucks. Because Europe is going though so many financial troubles, Starbucks isn’t doing as well as intended, causing a fall in coffee sales. In his years with Starbucks, CEO Howard Schultz has come to be very inspirational. Schultz stepped out of the CEO...
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