International Organization Subsidiaries Countries. Coffee International, Inc.:

¶ … international organization subsidiaries countries.

Coffee International, Inc.:

Starbucks' international strategy

Coffee International, Inc.:

Starbucks' international strategy

Mission Statement

From a small, Seattle-based coffee shop to an international corporate powerhouse, Starbuck's growth has a company has been a genuine international phenomenon. "Established in 1971 as a neighborhood retailer of gourmet coffee beans and fresh roasted coffee, the Seattle-based coffee superpower now boasts 15,012 stores in 44 countries around the world" (Levenstein 2010). Yet its mission statement is as follows: "Our mission: to inspire and nurture the human spirit -- one person, one cup and one neighborhood at a time" (Mission statement, 2010, Starbucks). Starbucks emphasizes community responsiveness. One of the hallmarks of the franchise was that, although it was part of a chain, every store had a slightly different character, depending upon its location, customers, and layout. However, when it expanded to other areas of the world, Starbucks had to even more radically think its core product, marketing, and presentation.

Product strategy

Starbucks markets itself as an affordable luxury in the U.S. It is often said that Starbucks was the first company to 'figure out' that people were willing to pay three dollars for a cup of coffee so long the drink was called a latte. While three dollars is considerably more than what Americans were used to paying for coffee pre-Starbucks, the price was still low enough that middle class people could enjoy relaxing in the store.

Distribution strategy

Even internationally, Starbucks tries to tailor its distribution strategy to the needs of the local market. Until recently, to maintain an exclusive 'image' in Japan, Starbucks only sold its products in stores in Japan, never in supermarkets, as it does in the U.S. However, the launch of its new Via coffee, which is marketed as tasting so good as to be indistinguishable from fresh-brewed Java, has caused Starbucks to change its approach to Japan and stress instant coffee. "Japan's instant coffee market was worth about $2.3 billion in 2009, roughly the same size as the fresh coffee market…By comparison, the U.S. instant market came to about $640 million, against $7.6 billion for fresh coffee" (Layne & Sloan 2010:1). The most popular instant coffee brand in Japan is Nestle, so the Japanese are used to buying foreign instant coffee brands.

Pricing strategy

In 2003, Starbucks' Japanese sales were flagging. However, Starbucks was able to rebound by reducing store expansion and raising its prices, emphasizing quality over quantity. It continues to use this strategy. "Starbucks will sell a box of three Via sticks for 300 yen, or 100 yen per cup. A box of twelve sticks will sell for 1,000 yen. ..That will make it considerably more expensive than rival offerings on shelves in Japan, where a Nescafe box of 15 sticks of ready-mix for cafe au lait sells for just under 300 yen" (Layne & Sloan 2010:1-2). However, in the U.S., although it has been forced to raise the prices of some drinks, it has also tried to offer more specials and 'deals' such as $1.50 brewed Java (Rohrlich, 2010).

Even in Japan, cost-consciousness of more of a concern than in the past. For customers who covet the Starbucks brand at home, Via still a third the price of a regular cup of coffee in the store. Starbucks' success in East Asia is manifest in the fact that, now that Starbucks has established a winning formula in its in-store locations, the company plans to further expand its enterprises in the regions, even while it cuts back the number of stores in the U.S.

A description of the global business environment and the countries selected market

On one hand, in Japan Via is a luxury, compared with the popular instant coffee brand Nescafe, which has long been a staple in many Japanese pantries, more so than in the U.S. However, given the worldwide economic downturn, many consumers are looking for more affordable luxuries -- buying a more expensive instant coffee brand to drink at home for budget-conscious consumers, or hanging out at a Starbucks rather than going to an expensive club might be.

Competitive environment

As in the U.S., competition in the coffee market "is fierce in the Japanese market…Starbucks must compete with the popular McCafe outlets run by McDonalds," which offer cheaper in-store coffee (Levinson 2010). However, in contrast to the U.S., where many people 'grab and go' their coffee, in Japan (as in Europe and the rest of East Asia) it is much more customary to 'stay and sip' the drink, making the ambiance of most Starbucks far more inviting.

Target market

In the U.S., Starbucks' target market tends to be somewhat affluent, although the wide array of stores spreading across the nation means that heavy segmentation of the market is more feasible. In Japan, the target market tends to be younger and more urban, reflecting the location of the stores and also the lifestyles of young people who use Starbucks as a meeting place, rather than just a place to buy coffee.

Communication strategy