Starbucks Essay

4786 words - 20 pages

[pic]

ASSIGNMENT SUBMISSION FORM

Treat this as the first page of your assignment

Course Name: Competitive Strategy

Assignment Title: Project – Globalization Problems faced by Starbucks – Focus on Europe

(Let us not waste paper, please continue writing your assignment from below)

Table of Contents

Executive Summary 3
Industry structure – Porter five forces analysis 4
Company background 5
Globalization strategy [1995-2008] 9
Performance in EMEA 11
Findings and analysis 13
References 27

Executive Summary

This study is focused on Starbucks, the world’s largest ...view middle of the document...

The focus of this study is to further delve into these factors, considering the industry structure and competitive environment, to arrive at the findings and recommendations for what could have been the ideal strategy for globalization for this company.

Industry structure – Porter five forces analysis

1. Rivalry within an industry – The specialty coffee industry is competitive because of its multi-domestic nature, with both low cost and high price-high differentiation players. However, given the relatively small number of branded competitors, the effect of competition is generally moderate.

2. Threat of New Entrants - Barriers to entry are generally low as there are low capital requirements, no significant economies of scale, ease of setting up business and the localized nature of the business. However, brand differentiation can be a challenge to newer firms and can be a deterrent to new entrants in an already established market. Overall, the threat of new entrants is high.

3. Threat of substitutes – Carbonated soft drinks and other energy drinks are not true substitutes. The closest substitute of specialty coffee is commercial coffee and tea, which is generally not as good in quality as specialty coffee. Threat of substitution is thus moderate.

4. Power of buyers – This is significantly high as specialty coffee is not a necessary consumption item. Under price constraints, the customer can easily switch to low cost options and even avoid having specialty coffee. Although price bargain is not available to buyer, they can almost always switch.

5. Power of suppliers – This is low as the main raw material for this industry is coffee beans which is cultivated in farmlands located in Africa and South America, and produced by fragmented small to medium farmers. Switching the supplier is rather easy. Specialty coffee needs high quality Arabica beans, which does enjoy a few supply-side powers but it is not pronounced enough to influence the industry.

Overall, the industry is very attractive and closely tied to macroeconomic conditions of a country.

[pic]

Illustration 1: Porter’s 5 forces for Specialty Coffee Industry

Company background

The company started off as a coffee roaster selling beans out of Seattle in 1971 for about five years. It was founded by three students of University of San Francisco - Jerry Baldwin, Zev Siegl, and Gordon Bowker - who were inspired by one of their teacher’s style of roasting beans. In the 1980s the consumption of specialty coffee increased and illustrated a shift in consumer preference from packaged coffee to specialty coffee. Howard Schultz, director of retail operations and marketing, went to Italy in 1983 where he observed how people gathered at their neighborhood espresso bars which looked like an extension of the front porch. He brought the idea of espresso bars to the management of the company, and in 1986 the company sold its...

Other Papers Like Starbucks

Starbucks Essay

321 words - 2 pages When considering successful franchises it seems appropriate to look at Starbucks history. Not just a neighborhood coffee shop, Starbucks Coffee Company has become synomous with quality products and service. Whether you are Generation X or part of Generation Y, the working class and the technologically advanced youth has embraced what Starbucks has to offer - even if they have to stand a half an hour in line to get it. But once you are

Starbucks Essay

1162 words - 5 pages Starbucks is a public company. that operates a chain of stores that sells high-quality coffee. Its typical company-owned store has a pleasant, coffee-house atmosphere complete with couches and Wi-Fi and is known for being a place to meet and gather. Starbucks licenses its stores to other business, not to individuals. For example, in the US Starbucks licenses stores to Host International, Inc. an Autogrill group (my employer), is a concessions

Starbucks

1288 words - 6 pages I’m sure that when thinking of Starbucks, many automatically think of strong coffee; Starbucks is more than just coffee. This company offers an appealing atmosphere and friendly helpful staff to assist customers with various services. Not only does Starbucks offer exceptional customer service they also pride themselves in offering an excellent working environment and benefits to their employees. Starbucks’ mission statement states: “Establish

Starbucks - 2462 words

2462 words - 10 pages There are several barriers facing Starbucks as they try to “teach” people to change their consumption habits from tea to coffee. Firstly, tea is one of the common beverages in China. According to the history, China peoples start to drink tea before four thousand years ago. In China, tea has become a unique cultural phenomenon. The Chinese view tea to be both medicinal and beneficial whereas coffee does not have the same value to the Chinese

Starbucks - 1542 words

1542 words - 7 pages Starbucks Coffee Christina Law Principles of Marketing Professor Hartl Over 100 million people in the United States are considered daily coffee drinkers, making the coffee industry a multi-billion dollar industry (Coffee Drinking Statistics). Coffee has become a routine in most college students and working adult’s lives. There are the coffee drinkers that are considered addicts who are not able to function without their morning

Starbucks - 1506 words

1506 words - 7 pages Starbucks Corporation: Case Study in Motivation and Teamwork Because of rapid globalization over recent years, competition around the world becomes more intense, especially for the service industry with similar products. The most critical point for business to achieve success is not only the quality of products they supply, but the atmosphere of cooperating and the amount yielded from teamwork in retail sales. Therefore, it turns out to be

Starbucks - 1506 words

1506 words - 7 pages Starbucks Corporation: Case Study in Motivation and Teamwork Because of rapid globalization over recent years, competition around the world becomes more intense, especially for the service industry with similar products. The most critical point for business to achieve success is not only the quality of products they supply, but the atmosphere of cooperating and the amount yielded from teamwork in retail sales. Therefore, it turns out to be

Starbucks - 1491 words

1491 words - 6 pages Starbucks Corporation: Case Study in Motivation and Teamwork Because of rapid globalization over recent years, competition around the world becomes more intense, especially for the service industry with similar products. The most critical point for business to achieve success is not only the quality of products they supply, but the atmosphere of cooperating and the amount yielded from teamwork in retail sales. Therefore, it turns out to be

Starbucks - 1961 words

1961 words - 8 pages Starbucks Introduction and Operations 1 The first Starbucks opened in 1971 as a single store in Seattle’s historic Pike Place Market. It offered some of the world’s finest fresh-roasted whole bean coffees. The name Starbucks was inspired by Herman Melville2 Novel, Moby Dick, and evoked the seafaring tradition of the early coffee traders. In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) first walked

Starbucks - 920 words

920 words - 4 pages . Starbucks MKT 111b Marjorie Kaufman Over the last few decades Starbucks has reshaped how we shop for and enjoy coffee. What began as a small shop in Seattle, Washington; has become one of the world’s largest producers of coffee and coffee related products. Starbucks was started by three friends; Gordon Bowker, Jerry Baldwin and Zev Siegl; in Seattle, Washington. Good coffee seemed hard to come by and Bowker was traveling to

Starbucks - 1024 words

1024 words - 5 pages Situation Analysis: Company Starbucks is a leading international coffeehouse that was founded in the year 1971 and acquired by Howard Schultz, the CEO of the company, in 1987. It has shaped the American culture by altering what we pay for coffee, what we eat, where we meet and how people spend their time socially. It rose from a single location in Seattle to a multibillion-dollar enterprise that operated in more than 17,000 retail stores in

Related Essays

Starbucks Essay 766 Words

766 words - 4 pages Executive Summary ACC/280 September 20, 2011 Sofoklis Hiotellis Starbucks is the leading seller and roaster of specialty coffee globally. Their goal is to become the leading brand of coffee in its targeted markets by selling the finest quality coffee and associated products and providing customers with a unique Starbucks Experience. The Starbucks mission is to encourage and cultivate the human spirit one person, one cup, and one

Starbucks Essay 1180 Words

1180 words - 5 pages Summary Millions of people all over the world walk into Starbucks every day for their cup of coffee, but it is more than the overpriced coffee that brings people in day after day to the Starbucks stores across the world. Starbucks offers an upbeat environment and friendly and helpful staff to assist customers in any question or problem they might have with the coffee or service. People buy Starbucks for what it represents and the status symbol

Starbucks Essay 880 Words

880 words - 4 pages Case Study: Starbucks and Conservational International Tutorial 104 Yifan Wang 20408850 1. Discuss the rationale for, as well as the benefits and risk of the collaboration between Starbucks and Conservation International (CI) from each party's perspective.  The collaboration between Starbucks and Conservation International is actually win-win strategy. They both would like to develop a partnership to leverage their expertise. The

Starbucks Essay 599 Words

599 words - 3 pages Within the Starbucks organization control mechanisms such as, bureaucratic control, market control and clan control are put to use daily. With any type of control mechanism there are positive and negative aspects to each. Let us look at the positive and negative reactions to control mechanisms within the Starbucks organization starting with bureaucratic control. The use of bureaucratic control for Starbucks is implemented and managed on the