Running head: STARBUCKS AS AN INTERNATIONAL BUSINESS 1
An Analysis of Starbucks as a Company and an International Business Lauren Roby
A Senior Thesis submitted in partial fulfillment
of the requirements for graduation
in the Honors Program
STARBUCKS AS AN INTERNATIONAL BUSINESS 2
Acceptance of Senior Honors Thesis
This Senior Honors Thesis is accepted in partial
fulfillment of the requirements for graduation from the
Honors Program of Liberty University.
Edward M. Moore, Ph.D.
Melanie A. Hicks, D.B.A.
Harvey D. Hartman, Th.D.
James H. Nutter, D.A.
STARBUCKS AS AN INTERNATIONAL BUSINESS 3
The researcher examines a detailed synopsis of the specialty coffee industry and the role that Starbucks plays in it. Starbucks is in a growth market, and it has a good relative overall position. The researcher will examine the business structure of Starbucks and the future implications of its current business strategies. By examining the strategic imperatives such as how to expand abroad and understanding the international context, the researcher will determine strong and weak business strategies of the company. Starbucks has overcome organizational and managerial implications that will serve as a strong model for international businesses. The researcher will then give strategy and implementation recommendations on how Starbucks can grow as an international business.
STARBUCKS AS AN INTERNATIONAL BUSINESS 4
An Analysis of Starbucks as a Company and an International Business Introduction
Millions of people all over the world walk into Starbucks every day for their cup of coffee, but it is more than the overpriced coffee that brings people in day after day to the Starbucks stores across the world. Starbucks offers an upbeat environment and friendly and helpful staff to assist customers in any question or problem they might have with the coffee or service. People buy Starbucks for what it represents and the status symbol that comes along with it. Although various business models exist, the principles and structure of Starbucks is a good model to follow, due to its national and global success. The researcher examines how Starbucks is financially succeeding as a corporation even through hard economic times. By looking at the industry and company situational analysis, the researcher will determine where Starbucks stands in the world coffee industry. The researcher will then discuss why Starbucks is a successful international business and the implications of being an international business. The last thing that will be discussed is the strategy recommendations for Starbucks, and how to go about implementing those strategies.
Industry Situational Analysis
Millions of people around the world thrive on their morning, afternoon, and sometimes evening coffee. Due to the massive amount of consumers for the coffee industry, there is also a lot of competition for those consumers. Coffee has been around for a long time, but the competition of coffee retailers has just recently sprouted with coffee sales rising more than 50% in 2007 (Burritt, 2007). The main competitors that STARBUCKS AS AN INTERNATIONAL BUSINESS 5
will be examined in this thesis are Starbucks, McDonald’s McCafe, and Dunkin Donuts Coffee.
The dominant economic characteristics of the industry environment have to be examined in order to determine where the industry is headed, and why Starbucks is a good model to follow. The coffee industry is continuing to grow despite the increasing costs for coffee from January of 2009’s 108.39 U.S. cents per lb. to December of 2010’s 184.26 U.S. cents per lb. ("International Coffee Organization Prices," 2010). The almost 200% increase in the price of the coffee...
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