STARBUCKS

GOING GLOBAL FAST

Presented by Group 2 - Esha|Shreya|Sanghamitra|Mayank|Soumit

Waves of Coffee

First wave
of coffee (19701990):
Mass
production of
coffee
-Introduction
of Vacuum

Second
wave of
coffee
(19902001):
Consumers
interested in
origin of
coffee Introduction
of Starbucks

Third
wave of
coffee
(2002-?):
Product
takes the
center
stage More focus
on
improving
production

Soumit Banerjee 10338

History of Starbucks
The Starbucks Coffee, Tea, and Spice Company was founded in Seattle in 1971 by
Jerry Baldwin, Gordon Bowker and Zev Siegl, with a vision to educate consumers
about fine coffees.
In 1987, Howard Schultz acquired Starbucks and began to expand. 149 new stores
were opened from year 1988-1992; all company-owned.
Starbucks went public in 1992. The initial public offering (IPO) had raised $29 million
for the company and Starbucks market capitalization stood at $273 million.
To expand the business model, Starbucks focused on:
Developing new products (such as coffee with Nonfat milk, Frappuccino,
seasonal offerings and food items)
Connecting with Customers: To create the sense of community and to build
Starbucks into a destination, they added music, books and movies to its product
mix.
Expanding store locations in United states and abroad (store clusters, drivethrough windows, licensing & partnerships)
Starbucks began its expansion outside North America in 1995 with a partnership with
SAZABY Inc. to open Starbucks coffeehouses in Japan. By 2008, Starbucks had 4500
locations in 43 countries outside the United States.
Soumit Banerjee 10338

Expansion of Starbucks
Starbucks in the 1970's
1971 marked the birth of the now top-selling coffee company, Starbucks.
Starbucks in the 1980's
The 1980's brought the introduction of Howard Schultz, the current owner of Starbucks coffee, as well as
growth and expansion for the company.
Starbucks in the 1990's
In the 1990's many new changes were introduced to Starbucks, in 1994 Starbucks opened it's first drive-thru
location and from 1995-1996 began to expand it's choices of beverages and growing over 1000 locations. It was
also in the late 90's when the website Starbucks.com was created. In 1999 Starbucks bought the Tazo Tea
company, which today is a very successful tea manufacturer.
Starbucks in the 2000's
By the 2000's Starbucks cafes were popping up all over America, with over 1000 stores appearing anually.
Starbucks 2010 and Beyond
With over 22,519 stores worldwide, Starbucks continues to grow it's legacy as on of the top coffee companies
in the world.

Soumit Banerjee 10338

International Marketing Task of Starbucks

Sanghamitra Chowdhury

Controllable 4Ps of Starbucks that constitutes the

decision area of Starbucks marketers

Sanghamitra Chowdhury

Uncontrollable factors

Sanghamitra Chowdhury

Threats and Risks

Nearing saturation in American market.
The current concept doesnt appeal to the youngsters.
Loyalists cannot be taken for granted.
Slumping morale and employee burnout.
Expansion challenges- Cultural sensitivities.
Esha Sharma 10316

Possible Solutions
Change theme, brand revitalisation.
Competitive pricing, introducing more segment based pricing.
Employee loyalty programs and fun activities.
Work on product portfolio.

Esha Sharma 10316

Third Place in Peoples lives

Home

Office

Starbuc
ks

In 2003 own recording company.

In 2006, they launched their first movie, and had partnership with William
Morris to scout for Music, books, films and finally opened their own
entertainment office in Los Angeles.
Mayank Bhagchandani 10323

Source: www.marketwatch.com

Mayank Bhagchandani 10323

New Expansion Strategy

Focused on 7 elements of strategy
Vision
Focus
Opportunity
Speed
Early win
Leverage
Gateway
Starbucks opened its e-flagship store in Alibabas Tmall. The digital storefront features
with unique and special design Starbucks cards, coffee voucher and gifts that delights
their customer.
Starbucks aiming to capture higher market share in the region and its target is to reach
3,400 stores in China by 2019.

Source:

Mayank Bhagchandani 10323

Comparison between countries

India

China

South Korea

Panama

Year of entry

2012

1999

1999

2015

Mode of entry

50:50 Joint
venture

Wholly owned
subsidiary

50:50 Joint
venture

Strategic
alliance with
regional
licensing
partner

Teamed up
entity

Tata Global
Beverages

Starbucks
Coffee
International

Earlier
Shinsegae

Premium
Restaurants of
America (PRA)

Competition

Costa Coffee,
Lavazza

Costa Coffee,
UBC

The Coffee
Bean, Caffe
Bene, Manoffin

Unido, Te Caf,
Ciudad de
Panam

No. of stores

100 (May 26,

2016)

1819

700

1
Mayank Bhagchandani 10323

Target

India

China

South Korea

Panama

Young urban
adults and
working
professionals

The young
urban adults
who preferred
coffee over tea;
to create a
coffee culture in
a largely tea
drinking nation

Young adults;
Older adults
used to drinking
inferior Instant
coffee

Adults of all age

groups and
middle-to-high
income groups

Offering

Core offering remains same across all countries

Market Specific
products
(localization of
flavours)

Elaichi Mawa
Croissant, Murg
Tikka Panini

Starbucks
mooncakes and
zongzi

Few

None as of now.

Pricing (US = 1)

0.95

1.2 (Most
expensive)

Mayank Bhagchandani 10323

PROFITABILITY IN JAPAN
CUSTOMER SATISFACTION
Saturation in home market Need for a new market
Majorly old population in Japan Soothing music, Calm ambience
Focus on Instant coffee market Grab high market share of coffee-incans and vending machines
Customized variations Less sweet coffee
Competition from lookalikes Need to launch niche products
Introduce green organic tea variants (Preferred by Japanese)

Shreya Srivastava 10337

PROFITABILITY IN JAPAN cont.

Japanese have peculiar taste of coffee Different variants and authentic flavors
to match their need and maintain product differentiation.

EMPLOYEE SATISFACTION
Major Problem Low employee turnover rate and dissatisfaction
Solution Motivation through incentivizing based on performance .
Employee base from host country For better employee-customer relationship
Shreya Srivastava 10337