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The impact of industrialization and urbanization
Starbucks expansion history
Starbucks expansion history
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INTRODUCTION
Starbucks was established in 1971 and it is an established, successful purveyor of Coffee. Starbucks is always known for its “rewarding coffeehouse” experience. In addition to coffee they offer selection of Tazo teas, pastries and other snack items like Panini to please the taste buds. For creating overall coffee house experience Starbucks stores have an appealing music and décor. Their focus in United States is to create a gathering place where people can chat, sit work much more just than a coffee place. Starbucks has a global presence over 17,000 stores all over the world. Starbucks entered India in 2012 as a joint 50:50 venture with Tata Group. This paper focuses on company’s strategy on entering the emerging market and how they have tackled the political, economic, social and cultural challenges of this growing market.
BACKGROUND
Coffee shops were nearing the saturation point in United States and Europe Starbucks decided to enter the lucrative emerging markets of India and China. India is traditional
tea
drinking
nation which is proven as 69.9 % hot beverages industry is dominated by tea industry. In India coffee is now a day’s coffee is becoming a style statement. Due to influence of western culture it is becoming popular amongst youngsters as well as young professionals. Going to a coffee house for socializing and networking this culture is slowly building up in India and hence it’s an emerging market for companies like Starbucks where they promote the overall coffee house experience. In addition to this due to industrial growth the spending capacity of youth in India has increased over the years and there by the popularity of this specialized coffee shop has increased. Currently in India Café Coffee day, Baris...
... middle of paper ...
...sed since 2009. The middle class and upper class are willingly spending in coffee shops and other beverages which was not the case in the past decade.
Social-Cultural Factor
As mentioned above India is a predominantly tea drinking nation. In addition to that this culture of going out with friends chatting over an expensive cup of coffee this was introduced to Indian by Café Coffee day. They were the first movers and hence companies like Starbucks being the late movers had an advantage as this culture was already introduced to Indian.
Legal factors
India’s government on January the 10th raised the ownership limit to 100% for foreign
Retailers selling a single brand, a decision benefiting companies including Starbucks
(Passport, Euromonitor 2011). In this case this was a joint 50 % venture. Due to these Legal factors companies are willing to invest in Indian market.
To achieve the quest of improving the customer experience, they are providing the customers with extraordinary service, a friendly environment, and high-quality products. The customer’s experience with Starbucks has defined their visits with the saying, “one cup at a time, every day” to indulge their visits. This statement led the company to adopt their mission statement of, “To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time” (Starbucks Corporation,
After all thousands of years of traditional tea drinking cannot easily be broken, for example, instead of offering flavored frappacinos and caramel macchiatos like we have here in the united states, Starbucks developed a range of Chinese tea’s flavors, such as green tea-flavored coffee drinks, that appeal to local tastes and began selling traditional desserts like Mooncakes. Another reason why Starbucks in China has become so successful is the cultural difference between American and Chinese consumers. The American consumers is always on the go and have the need to get their food and beverages as quickly as they can, Starbucks now lets consumers order their coffee with a mobile app and have ready to pick up in the store without waiting in the line. And the clients who do decide to have their coffee in the store are in a corner working on their laptops as a "Do Not Disturb Sign" going on with their business without interruption. In China however, Starbucks has a become a ideal social setting to meet up with friends and family. With chic modern interior, comfortable seating, and upbeat music, their locations appeal to the younger
It is a well-known fact that Starbucks is expensive, and it is not only coffee the company sell but status. In today 's developing countries Starbucks represents a status symbol that separates the rich consumers from the masses especially in the continent of Asia. A cup of Starbucks cappuccino coffee costs more than 6 dollars in China and is even more expensive in other developing countries in Asia, but the same cup of coffee may only cost half that price in the US. The American coffee and chain company of Starbucks Corporation sets an example and explanation of how global hospitality companies can implement price discrimination.
Imaging if there was no more coffee in this world, how would you feel? Nowadays, coffee becomes an important part of people’s life. People who often work overtime, they drink coffee because caffeine can make you awake; people who have to wake up early in the morning, they drink coffee because instead of making breakfast, coffee is more convenient; people drink coffee during the free time, because it also tastes good.
One of the main problems which Starbucks is currently facing is the watered down “Starbucks experience”. Over the years the baristas and the atmosphere of Starbucks locations have lost the appeal which they originally possessed. The baristas which work at Starbucks have lost their personal touch of customer service, as well as the connection which should be made with the customers. If baristas were taught how to properly make drip coffee, engage the customer, teach them about the product which they are consuming, etc. then the company could bring back the original vision. A passionate barista which knows about the product has the ability to teach consumers, as well as share the craft that is roasting coffee. Another problem which has occurred over the years is the lack of pos...
Starbucks Coffee, Tea, and Spice opened its first store in April 1971 in the Pike Place Market in Seattle, by owners who had a passion for dark-roasted coffee that was popular in Europe, but hard to find in the U.S. (Harrison et al., 2005; Venkatraman & Nelson, 2008). The company’s mission was to provide Seattle with the best access to dark-roasted coffee, and sought to educated customers about the product. As a matter of customer education and acceptance of the product, Starbucks grew and expanded into the successful domestic market it is today. Much of this success can be attributed to a focus on the total customer experience and s...
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
Millions of people around the world go to Starbucks every day for their cup of coffee, but it is more than overpriced coffee that brings people into Starbucks stores around the world. Starbucks offers a cheerful and friendly and helpful staff to assist customers in any questions or problems they might have with coffee or services. People buy Starbucks for what it represents and status symbol that comes with it. Although various business models exist, the principles and structure of Starbucks is a good model to follow for the success of national and global influence. India is one of the main sources of economic growth.
Starbucks will need to adapt its business practices to suit the Indian market. For example, Starbucks will need to consider the local customs and traditions when designing its stores. Another challenge is the competition in the Indian market. Starbucks will need to compete with local coffee chains such as Cafe Coffee Day and Barista. Starbucks will need to differentiate itself from its competitors by offering high-quality coffee and a unique customer experience.
Vancouver, BC V6E 4A2. Well I personally believe that a coffeehouse should be a place to find connection and it should fit seamlessly within its neighborhood and lastly its environmental impact should be as minimal as possible. The experience I had was that, Sustainable design and methodologies Is part of their DNA. I haven’t even walked in yet but Starbucks was already working on me. I started with the door handle it was like a handshake between the store and me, it was not there by accident it was already providing me with some advertisement about the coffee I was about to buy. Layout of entrance zone plays an important role to represent a coffee house first impression. Starbucks design their entrance
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
When I saw this discussion, I couldn’t help but think of Starbucks and the impact they’ve made throughout their 45 years of establishment. I worked with them for about 7 years and saw how unique they were from your everyday coffee and latte spots. A retail company with thousands of coffee shops in the US as well as in other countries, this particular retailer has been able to catch the eyes of all ages as well as locations throughout the world. For example, today college students utilize Starbucks locations to study rather than go to a nearby library. Starbucks is also known for its best coffee and espresso drinks (Latte or Frappuccino) and with one of its delicious espresso 's any student or just a person stopping in to enjoy its lounge area where there is free Wi-Fi is awesome! Starbucks lifecycle has made a 360 turn around and been revamped twice to accommodated the growing market. Customizing their brand to fit more in with everything and not just one thing. By doing this they’ve created multiple product lifecycles within their own lifecycle as a corporate company.