Political systems have had some impact on Starbucks, compelling them to joint ventures and partnerships rather than greenfield investments. International relations are critical to Starbucks, since it needs strong trade agreements and positive relations not only to operate in its multiple foreign markets but also for sourcing its coffee. Positive international relations allow Starbucks to exploit the market opportunities with which it is presented.
As with all American companies, Starbucks is bound by the Foreign Corrupt Practices Act. This law covers American firms working overseas. Starbucks' strong commitment to ethical behavior compels the company and its employees to adhere to the foreign corrupt practices act. The company also adheres to, and usually exceeds the parameters of, international legislation. Starbucks pays its workers above local minimum wage and treats them as they would domestic workers.
Technology has impacted Starbucks' operations, particularly on the product side. The company has utilized technology such as automatic espresso machines to improve the pace of product delivery, allowing the company to reduce staff costs. It purchased the high-end Clover system (Starbucks, 2008) and has recently introduced an instant coffee system (Berfield, 2009), both in an attempt to diversify its coffee offerings.
Beyond product, Starbucks relied on sophisticated inventory management and sales forecasting systems. These systems are especially crucial for international operations, which may have lead times of weeks for products originating in the United States. The company also relies on information systems...
Its marketing efforts have revolved around two key elements of the marketing mix -- place and product. The company is continually adopting new products in order to broaden its appeal and in some Asian countries has de-emphasized coffee altogether. Place has also been critical -- moving into ethical markets where Starbuck's business model can be adapted to meet the needs of a strong target market. It is to this formula that Starbucks owes much of its international successes to date.
Works Cited:
Starbucks website, various pages. (2009). Retrieved November 13, 2009 from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-financialHighlights
No author. (2009). Starbucks' green tea success with Japanese consumers leads to worldwide popularity. JETRO. Retrieved November 13, 2009 from http://www.jetro.org/content/353
Lu, H. (2009). Starbucks pushes China sales with local brew. China Daily. Retrieved November 13, 2009 from http://www.chinadaily.com.cn/bizchina/2009-02/05/content_7447136.htm
Berfield, S. (2009). Behind Starbucks' instant coffee rollout. Business Week. Retrieved November 13, 2009 from http://www.businessweek.com/bwdaily/dnflash/content/sep2009/db20090929_148572.htm
Starbucks. (2008). Starbucks Coffee Company to acquire coffee equipment company and its revolutionary Clover brewing system. Starbucks. Retrieved November 13, 2009 from http://www.starbucks.com/aboutus/pressdesc.asp?id=848
