International Business of Starbucks Research Paper

Excerpt from Research Paper :

International Business of Starbucks

Starbucks Corporation established in 1971 has its headquarters based in Seattle, Washington. The company is the leading and largest coffeehouse company, with a wide coverage of the market across the globe (Simon, 2009). It is a global coffee company and chain of coffeehouse stores, operating in over 50 countries all over the world. At its founding, it was a mainstream coffee bean roaster and retailer. The company founders were a group of three partners, who were students in the University of San Francisco at the time of its establishment. Originally, Starbucks only roasted whole coffee beans, without brewing, but later came to incorporate aspects of brewing and other products. They used to get supplies from Peet's, but later bought Peet's and started dealing directly with the growers, hence began to expand (Simon, 2009). Eventually, the company expanded in the 1980's and 1990 is within the America's and later the other continents of the world.

Mission statement

The mission statement of Starbucks is to inspire and nature the human spirit by inspiring one person with one cup and one neighborhood at a time (Seaford, Culp & Brooks, 2012). Through this statement, the company incorporates its core principles in business, which include being passionate about quality, which helps them relate with favor from their customers. Similarly, they incorporate their partners, embracing diversity and treating each other with respect and dignity, hence, the success of the company. The company believes that every store is part of the community it operates in; thus, they take responsibility to good neighbors and meet their social accountability and responsibility. Thus, when the customers get into the stores of Starbucks, they always feel a sense of belonging, as the stores are always full of a sense of humanity as the mission statement indicates.

Product mix of Starbucks

Starbucks as a leading coffeehouse company in the world operates over 5,500 stores in over 50 countries. From the single store opened n 1971, it used to offer only roasted whole coffee beans. However, with time and its apparent expansion, the product lines grew to incorporate various products. The products offered in the company coffeehouse stores include, beverages, comprising of coffee, Tazo tea, soda and juices, it offers pastries comprising of whole coffee beans, and merchandise consisting of mugs and compact discs. The company has an entertainment division, in which it does its marketing of books, music and films, with the products in this line being seasonal, and varying from the stores in various countries (Fitzgerald, 2013). The company revolutionized coffee products offered in the United States and across the world markets.

Marketing philosophy and strategy

Starbucks has its largest and leading oversee markets in Japan, where it operates over 480 stores, in England where it has over 370 stores and China and Taiwan, which both have over 120 stores (Seaford, Culp & Brooks, 2012). It also has other stores in various countries, with the largest coverage of stores located in the United States and Canada. Additionally, the company operates in two industries that is restaurants and coffeehouses, and serves a worldwide geographical area, which gives it vast market to operate. The marketing philosophy and strategies of Starbucks are engraved in the business policies and ethics of the company. The philosophies that enable Starbucks to maintain local and international competitiveness include the following. First, the company basis on great global partnerships; thus, it owes much of its international success on the international partners. The company chooses partners in a critical way, being precise and selective in qualities of partners (Liu, Huang & Chen, 2012). Secondly, the company holds deep respect for the local cultures. This philosophy borrows from the aspect of being international; it operates in different communities, with varying cultures and beliefs. Thus, the company respects the culture and traditions of the countries and people with which they do business. The company recognizes that success is not an entitlement; thus, it strives to earn the trust and respect of their customers daily through this philosophy.

The strategies ensuring the success of Starbucks include the following. History shows that the company places immense emphasis on product quality; thus, providing the perfect cup of coffee, which is delicious and satisfying to customers, is the first strategy. Despite the slightly high price, this strategy ensures customer retention (Pham-Gia, 2009). The second strategy is that it focuses on providing a third place for customers that is between home and work. The unique relaxing experience and atmosphere helps the company to strongly attract customers and retain them. Thirdly, the company employs time and resources to create a community around its brand. The websites of Starbucks and social sites provide a platform for customers to relate with the company; hence, it markets it significantly. Moreover, the company banks on establishing smart partnerships that demonstrate growth for the company. This strategy earns the country hefty increase in sales. Another strategy the company employs is innovation, which entails a lot of creativity in revolutionizing coffee products (Pham-Gia, 2009). As a result, they added many flavors of coffee and foods in their menu; hence, growing significantly. It was also among the first companies to offer internet facilities in their stores. Lastly, brand marketing is a great strategy of marketing. Starbucks achieves this by letting the word of mouth from the esteemed customers market the brand. Thus, it is clear that Starbucks individualized the marketing techniques to fit perfectly into its mission and philosophy of operation; thus, making it as thriving as it is at present.

SWOT analysis

Competitors

The key competitors of Starbucks company include, McDonald's Corporation, Dunkin' Brands Group Inc., Nestle S.A., Green Mountain Coffee Roasters, Costa Coffee and Caribou Coffee Company.

Strengths

The company enjoys various strengths including, sound financial records, with its profitability rising significantly to over 14% in the past few years. The company outmatches its nearest competitor in financial records. The company enjoys the number one position as leading coffeehouse segment, being valued at $4 billion; hence, a strong reputation, with excellent customer service (Seaford, Culp & Brooks, 2012). Thirdly, it has an advantage over competitor's inexperience. Starbucks delivers perfectly blended experience to customers through all its aspects of service, music, staff, and atmosphere, resulting in incomparable customer service experience. Additionally, the company operates over 5,500 stores in over 50 countries, giving it large market base. Thus, it is the largest coffeehouse chain of stores in the world. Lastly, despite having large workforce, the management of the employees is remarkable. It offers them a wide range of benefits and an incomparable high pay rate, thus getting best employees.

Weaknesses

The company faces challenges from the price of coffee beans, which influences the profit of the company. Starbucks does not have control over prices of coffee thus, with other external factors such as weather conditions among others; the pricing of coffee beans affects profitability of the company. Secondly, the company offers products at higher pricing than competitors price, which becomes a disadvantage (Seaford, Culp & Brooks, 2012. Lastly, is negative publicity, which it receives for its poor efforts to become greener, tax evasion claims, and poor relations with suppliers.

Opportunities

The company has an opportunity to expand its supplier network since it does not grow its own coffee. The company can focus on supplies from Africa and Asia, rather than its current suppliers clustered in South America and Arabia (Seaford, Culp & Brooks, 2012. Secondly, it has an opportunity to expand to emerging economies, such as India among others. Additionally, the company should increase its product offerings, to incorporate aspects such as coffeehouses with wine and beer services and other new products. Lastly, the partnership options should also include retailer operations such as supermarkets to channel their products through such franchises.

Threats

The threats to the business include fluctuating and rising prices of coffee beans and dairy products. The issue of trademark infringements in the company and supply disruptions, which causes Starbuck, detrimental loses (Seaford, Culp & Brooks, 2012. There is increased competition from local cafes and other coffeehouses specializing in various products. Lastly, it faces a challenge from the saturated developed economies in which it largely relies.

Impacts of economic regional integration

The regional economic integration influences tariffs and trade regulations in the market. These factors affect the prices of the resources used by Starbucks, such as dairy products and coffee beans. High tariffs from the trade organizations and political influences of the regions affect the profitability of the company (Gilbert, 2008). Secondly, technological changes over the country that facilitate economic integration impact the company positively, as the company gains access to larger markets throng integration of marketing platforms. Therefore, in view of the economic integration, it influences the performance of the company both positively and negatively.

Conclusion

Starbucks remains the leading coffeehouse chain of stores in the United States and across the world. The company has marketing philosophies and strategies that continue propelling it to achieve higher success. The company continues to execute its plans to expand and target…

Sources Used in Document:

References

Simon, B. (2009). Everything but the Coffee: Learning about America from Starbucks. Berkeley:

Fitzgerald, M. (2013). How starbucks has gone digital. MIT Sloan Management Review, 54(4),

1-8. Retrieved from http://search.proquest.com/docview/1399095649?accountid=458

Gilbert, S. (2008). The story of Starbucks. Mankato, MN: Creative Education.

Cite This Research Paper:

"International Business Of Starbucks" (2013, November 19) Retrieved November 14, 2018, from
https://www.paperdue.com/essay/international-business-of-starbucks-127589

"International Business Of Starbucks" 19 November 2013. Web.14 November. 2018. <
https://www.paperdue.com/essay/international-business-of-starbucks-127589>

"International Business Of Starbucks", 19 November 2013, Accessed.14 November. 2018,
https://www.paperdue.com/essay/international-business-of-starbucks-127589