Starbucks Global Strategy
Risks to Starbucks’ Global Growth
Introduction
Every day millions of people all over the world walk into Starbucks for their java shot, but it is more than the overpriced coffee that brings people in day after day to their Starbucks stores across the world. Starbucks offers a setting and an environment created by the friendly and helpful staff. They are always around to provide excellent customer service. Managers at Starbucks put tremendous attention into hiring good “people people.” Their hiring and training process is designed to provide a customer-centric experience. People buy Starbucks for what it represents and the status symbol that comes along with it. It has been one of the fastest-growing brands in annual BusinessWeek surveys of the top 100 global brands. Starbucks' popularity has persisted even in an economic downturn - an undeniably impressive feat as other retailers are struggling, said Greg Schroeder, a research analyst with Fulcrum Global Partners LLC. "It's a phenomenal growth story - regionally, nationally and now the final stage is to become a global consumer brand," he said. Starbucks had outlined a seven part strategy for growth in its 1991 prospectus at time of IPO - and by-and-large has stuck to it since. Highest quality coffee, customer service, store design and atmosphere have been reason that Starbucks has become a global brand with 17,244 stores worldwide.
The coffee chain is expanding into other countries at a time when American cities are becoming saturated. The crowding of stores so close to each other in the US has cut sales at existing outlets. The tepid performance of US stores has led to closing of some stores though the plans for international expansion are growing. The US coffee giant has big plan overseas, but where it assumes more risk, and foreign outlets’ narrowing profits margins. This paper discusses various risk factors and performs SWOT analysis to evaluate Starbucks’ penetration in global markets. It also outlines
Introduction
Every day millions of people all over the world walk into Starbucks for their java shot, but it is more than the overpriced coffee that brings people in day after day to their Starbucks stores across the world. Starbucks offers a setting and an environment created by the friendly and helpful staff. They are always around to provide excellent customer service. Managers at Starbucks put tremendous attention into hiring good “people people.” Their hiring and training process is designed to provide a customer-centric experience. People buy Starbucks for what it represents and the status symbol that comes along with it. It has been one of the fastest-growing brands in annual BusinessWeek surveys of the top 100 global brands. Starbucks' popularity has persisted even in an economic downturn - an undeniably impressive feat as other retailers are struggling, said Greg Schroeder, a research analyst with Fulcrum Global Partners LLC. "It's a phenomenal growth story - regionally, nationally and now the final stage is to become a global consumer brand," he said. Starbucks had outlined a seven part strategy for growth in its 1991 prospectus at time of IPO - and by-and-large has stuck to it since. Highest quality coffee, customer service, store design and atmosphere have been reason that Starbucks has become a global brand with 17,244 stores worldwide.
The coffee chain is expanding into other countries at a time when American cities are becoming saturated. The crowding of stores so close to each other in the US has cut sales at existing outlets. The tepid performance of US stores has led to closing of some stores though the plans for international expansion are growing. The US coffee giant has big plan overseas, but where it assumes more risk, and foreign outlets’ narrowing profits margins. This paper discusses various risk factors and performs SWOT analysis to evaluate Starbucks’ penetration in global markets. It also outlines