At 7:45 in the morning in a downtown Seattle Starbucks, customers want their coffee to go, and now. Hands clutching cell phones and briefcases fumble to toss the latest Beck CD onto the counter or maybe tuck a pound of beans under the elbow for later. The Chinese, though, are remaking the "Starbucks Experience." Mostly eschewing to-go coffees and foods -- and certainly music purchases -- they're opting for in-situ dining on curry puffs and moon cakes during the Chinese Mid-Autumn Festival. They can sit for hours. "In Hong Kong and China, coffee is still more of a social event than a daily necessity," said Michael Wu, 34, the managing director of Maxim's Caterers, Starbucks' joint venture partner in Hong Kong, Macau and southern China. "People come to meet their friends and talk." Wu said that Starbucks has increased the size of the stores he oversees in Hong Kong and in China to around 2,000 square feet, to accommodate all of the lollygagging chatters. It is a testament to the "Third Place" concept, often used by Chairman Howard Schultz to describe Starbucks -- that home away from home where, for a premium, the host serves you coffee and offers up CDs and candy, too. In the United States, though, Starbucks revenue is driven by the speed and frequency of its transactions, as people grab their coffee, and maybe a sandwich, before scurrying out the door to their next appointment. But in the five years that it has operated in Hong Kong, Starbucks has come to be viewed as a destination restaurant rather than a coffee take-out joint, helped by Maxim's Caterers' experience as Hong Kong's largest catering conglomerate. "The Chinese especially, they mostly cannot drink coffee alone, it must go with food," said Wu, explaining the generalized Chinese notions of coffee that Starbucks is hoping to transform. "That's why our sales per customer are higher than in the United States -- they buy food with their coffee." Wu said that less than 5 percent of the Starbucks business in China that he oversees is take-away, unlike the United States, where it is the vast majority of sales. "They come here and make use of the store, which is why they will pay a premium," said Wu. "For take-away to take off, we need to get loyal customers to be coming in 10 times a month until it becomes a part of daily life." Wu said that Starbucks does most of its business in Hong Kong during the afternoon and nighttime, when people gather to review their day with friends and family, unlike the United States, where much of Starbucks' traffic is driven during the morning.
Over the past few decades, Starbucks has become a household name. Headquartered in Seattle, Washington, Starbucks is one of most lucrative coffee chains in the world. As of 2015, the company has chains in 50 countries with more than 22,500 stores in operation (Starbucks Corporation, 2017). The 70 stores located in Australia are focal point stores, which focus/tailor to improving the marketing strategy, customer service, and testing of new products to differentiate the company from the competition. Coffee is their primary business, so obtaining high-quality coffee beans from the nations that produce this product is important. Not only does the company sell hot coffee beverages, but they also offer a variety of cold drinks. The menu consists
Starbucks have tried to blend in with the Chinese traditions and cultures, but could not. They took long term measures for the greater China like having Corporate Social Responsibility Programs like having invested 5 million US dollars in the China Education Project. They wanted to be perceived as” a different kind of
Today, they have expanded lunch programs to a total of 4,150 stores and introduced the ability to warm pastries and provide hot breakfast sandwiches to stores across the nation. Starbucks retail stores are operated through a number of joint venture and licensing arrangements in South East Asia countries as well as Thailand, Singapore and China. When they do the business in foreign countries, the most important issues will have to be aware of the exchange rates. They are planning to open 2,400 stores internationally in 2007, and they have approximately set financial growth targets for total revenue 20 percent and annual earnings-per-share 20 to 25 percent for the next three to five years. In addition, they have proposed new stores count target to 40,000 worldwide (20,000 U.S. and 20,000 International) in the long-term (Starbucks Financial Release, 2007).
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, it was announced by rival Diedrich Coffee that it would sell most of its company-owned retail stores to Starbucks.
Food: Sandwich, Salads, pastries and ice creams. Non food items: Mugs, Travel tumblers, coffeemakers, coffee grinders, storage containers, compact discs, games, seasonal novelty items, Starbucks card, media bar. International Business Development In order to achieve Starbucks mission to be a global company, the development strategy that Starbucks implemented to adapt with variety market and local need are: joint ventures, licenses and company owned operation (Starbucks Corporation, 2005). There are 4,666 Starbucks stores which are operated and 2,222 are licensed operation in US which are spread out in 50 states.
Starbucks Corporation is an American coffee company founded in Washington in 1971. As of today, it operates 23,768 locations worldwide. Starbucks is owned by private sector. Corporate Starbucks' are owned all by the same people and offer employees discounts and free coffee/tea. Private Starbucks' are mostly located near the airport, etc. These Starbucks' are owned by individual companies and do not report to the "Starbucks head office". They don't offer their employees discounts and free merchandise however, they pay more. Both Starbucks offer the same drinks and food though. Starbucks is in the international scale: stores in Europe, Africa and Asia also operates 23,768 locations worldwide. Its competitors are café Nero, Costa coffee and McDonalds. Starbucks statement is “To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.” This mission statement reflects what Starbucks does to keep its business running.
Each products and service of Starbucks has their own characteristics in order to meet customers ‘demand. Other factors that determinant demand include the prices of related goods, consumer income, consumer preferences, the quality of coffee, size, and buyer expectations. finally, there is a really important point is demand curve that shows the relationship between the price and quantity demanded of a good, and then help sellers forecasting the trend and change supply time. “the law of demand holds that, for virtually all goods and services, a higher price leads to a reduction in quantity demanded and a lower price leads to an increase in quantity demanded (Lewin & Varangis
With that store being there to help support new stores that would be entering the region. The goal was to have around 20 stores after two years of entering a market and have those stores expand even further into smaller cities and suburban locations. They also started to add drive-through because it made it more convenient for parents with small children. Some of the drawbacks of drive-through were that it took away from impulse buys and sometimes created bottlenecks in the line. Licensing the brand was also a great way that they expanded their business; by putting Starbucks in airports in malls they create a lot of foot traffic lead to successful stores. Starbucks carefully considered their image and the image they wanted to uphold when choosing licensees. The international market is now where Starbucks has the most potential to grow. As of right now Starbucks has plans to open 1,400 new stores in China. That’s more than half of the store it already has in China. The growth technique that I was most impressed with was that having two locations so close to each other would not saturate the market. The first store would see a drop in sales at first but would bounce back and the new store would grow. I notice we have that here, at Target in uptown you can actually see the Starbucks across the street while you are in line. Both seem pretty busy most of the time too.
...nal locations in the heaviest coffee drinking countries. This has to be done quickly as to get the jump on other that may also be considering this type of a move. At the same time they should be selling franchise right for the coffee carts. This will provide an increased cash flow as well. During all of this Starbucks should be looking at coffee producers who are in financial trouble or are looking at selling their farms. This has to be done discretely as not to cause unnecessary bad press. After they run a couple of these coffee producing farms for a few years they should be able to see how the whole operation works and determine its viability. Once it’s proven viable they should send out simultaneous offers to the biggest producers as to catch them and other coffee companies off guard. Starbucks also should be getting into the bottled Frappuccino as soon as possible. They should leave the introduction of the product up to Pepsi because of their past experience. They should leave their entry into the grocery store market until some of these other strategies are implemented. This will prove to be the best strategy for Starbucks being able to reach their long-term gaol.
Background According to Patterson, Scott, and Uncles (2010), the first Starbucks store was initially established in Seattle’s Pike Place Market in 1971. It has been spread publicly with the rapid expansion since 1992 to over 15,000 branches, new 7 branches every single day, in 44 nations, as a result of being the most enormous coffee chain operator all around the globe. Within one week, Starbucks provides 50 million coffee drinkers in North America.
Starbucks is the world’s largest specialty coffee retailer, Starbucks has more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products. Starbucks Corporation was founded in 1985 and is based in Seattle, Washington. (Bramhall)
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
Expansion of Domestic and International retail markets: With the target of 2000 stores by year 2000, Starbucks is on an expansion mode. They are expanding into the international markets and simultaneously they are diversifying in the domestic markets also. Initiatives like Frappuccino and the Doppio cart are part of this.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
In 1971, three young entrepreneurs began the Starbucks Corporation in Seattle Washington. Their key goal was to sell whole coffee beans. Soon after, Starbucks began experiencing huge growth, opening five stores all of which had roasting facilities, sold coffee beans and room for local restaurants. In 1987, Howard Schultz bought Starbucks from its original owners for $4 million after expanding Starbucks by opening three coffee bars. These coffee bars were based on an idea that was originally proposed to the owner who recruited him into the corporation as manager of retail and marketing. Overall, Schultz strategy for Starbucks was to grow slow. Starbucks went on to suffer financial losses and overhead operating expenses rose as Starbucks continued its slow expansion process. Despite the initial financial troubles, Starbucks went on to expand to 870 stores by 1996. Sales increased 84%, which brought the corporation out of debt. With the growing success, Starbucks planned to open 2000 stores by year 2000.