The Report of Starbucks Development in Asia Pacific

Topics: Coffee, Starbucks, Coffee culture Pages: 8 (2723 words) Published: March 16, 2011
For many multinational companies, they have begun global expansion. The Asia Pacific region is a potential market to get more profits. Starbucks is one of the international companies, who expand the market in the AP. This report will introduce Starbucks firstly, and then articulate the strategies of the company and use SWOT to analyze the internal and external environments. Some recommendations for Starbucks managers are given according these analyses.

company profile—Starbucks
Starbucks coffee company was founded in 1971, opening its first store in Seattle’s Pike Place Market selling coffee beans only. During this time most coffee was purchased in a can directly from supermarket shelves. Starbucks’ concept of selling fresh-roasted whole beans in a specialty store was a revolutionary idea. Howard Schultz purchased the company in 1987 and Starbucks Coffee Company opened the first store to sell brew coffee and espresso beverages. It completed Initial Public Offerings on NASDAQ in 1992 under the trading symbol “SBUX” (Starbucks Corporation), thus opening a new chapter of growth for the company. Currently, it operates in 39 countries around the world with more than 13,000 stores and over 145,000 employees (Ian, 2009). Starbucks has some guiding principles about mission. Like providing a great work environment and treat each other with respect and dignity and applying the highest standards of excellence to the purchasing, roasting and fresh delivery of their coffee. Starbucks have a wide range of products lines including coffee, handcrafted beverage, merchandise, fresh food, consumer products and brand portfolio. Additionally, Starbucks is committed to doing business responsibly and try to earn the trusts and respects from customers, partners and neighbors. Starbucks global expansion strategy in AP. The AP region is filled with emerging markets, and consumers’ disposable incomes increase as their countries’ economies grow. Consequently, Starbucks has existed in a few foreign countries: China, Japan, 4 NIEs, Indonesia, Malaysia and Thailand in recent years. Designing a strategy for AP includes 4 major dimensions: realizing firm’s ambitions for AP, organizational capabilities, creating capabilities through investments, and positioning in AP. Moreover, the timing of strategic implementation typically falls into 3 stages: entry, growth and consolidation. China and Japan are Starbucks’ primarily targeted markets in AP.

Starbucks Ambitions
Considering the anticipated future importance of the AP region in Starbucks portfolio relative to the existing one, entering AP can assist Starbucks realize its ambitions. Qualitatively, the overall corporate mission is “Establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles as we grow” (Schultz, 2008). To achieve the goal of becoming the most recognized and respected brand of coffee globally, exploiting new markets is an indispensable part of the whole global strategy. On the other hand, the AP region can make Starbucks accomplish its quantitative objectives, such as increasing market share and reducing the sourcing and operation costs. Firstly, Japan is a developed country in AP, and the majority of its population is in the middle class, which is fit for Starbucks positioning. Moreover, the crowded places, constantly busy working conditions and a higher density of people all create significant attraction. Equally, China is a large untapped emerging market with the reform and open policy for foreign investment. These markets have attracted Starbucks’ exploitations. Until now, Starbucks has owned about 500 stores in China, and operates about 846 stores in Japan (Annual Report, 2009). Starbucks imports its high-quality coffee beans mainly from Latin-American and Arabic regions previously, and then re-ship to its different operating areas. Nowadays, since the AP superior geographic location, Starbucks can...
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