“It’s not unusual to see people coming to Starbucks to chat, meet up or even work. We’re a neighborhood gathering place, a part of the daily routine – and we couldn’t be happier about it. Get to know us and you’ll see: we are so much more than what we brew.” (Starbucks.com, 2015)
With a different “environment” globally, Starbucks faces the similar challenges internationally as they do domestically when it comes to the controllables; Price, Product, Placement, and Promotion. Priced as a premium, high-quality product, found on nearly every corner, promoted with minimal advertising and significant word of mouth, Starbucks has established itself as a beacon for coffee lovers everywhere, at least in the United States. When venturing into international expansion, and sometimes domestically, Starbucks has taken time to research and adapt to the uncontrollables. Social factors, like Gen Xers and being turned off by power and global companies, activists, and millennials who do not feel welcome amongst the “yuppies” buying expensive coffee; Italians with superior products; competitive forces remaining “local loyal”, political and legal forces with regulations, policies and labor benefits, and especially economic downturns in every country making profits harder to achieve. Entering any new global market is a risk, but a risk Starbucks needed to take in order to continue growth.
With an oversaturated marketplace in the United States, they faced competitors, both local, regional and nationally. In addition, opening on every corner, Starbucks had started cannibalizing their own business. As global expansion took Starbucks into Italy, Spain, Japan and Germany, and more recently into Mexico and Puerto Rico, partnering with locals provides the risk of less profits and political hoops to jump through. Also, international look-a-likes and imitators prove to stand between Starbucks and its market dominance. A greater risk falls in the