An Analysis of Starbucks as an International Corporation
November 9, 2014
Starbucks is in a growth market, and it has a good relative overall position. This research examines the company background and international presence. It will also discuss the business structure of Starbucks and implications of its international business strategies. By examining the strategic imperatives such as how to expand abroad and understanding the international context, the researcher will determine strong and weak business strategies of the company. Starbucks has overcome organizational and managerial implications that will serve as a strong model for ...view middle of the document...
Starbucks has been a financially successful corporation even through hard economic times. But some may wonder, where does Starbucks stands in the world coffee industry? Why is Starbucks a successful international business? What are some implications that the company is faced with? And what are the strategies utilized by the company?
Starbucks Company Background
Starbucks is currently one of the top contenders in the coffee industry. It is aware of the stiff competition and is prepared to combat it however possible. In order to better determine Starbucks’ situation in the specialty coffee industry, it is important to look qualitatively and quantitatively at its current strategy. An analysis of the company’s strengths, weaknesses, opportunities, and threats, SWOT analysis, and a strategic issues analysis will breakdown its strategy and provide positive and negative feedback on the company as a whole.
Starbucks has done many things to help its company grow and expand into the transnational business that it is today. Its high quality differentiation strategy allows it to focus on pleasing the customer in every way possible. Its introduction of wireless internet and the Starbucks Digital Network allows it to provide a better experience for its customers and increase its sales compared to the company’s previous performance. If people stay at Starbucks for longer periods of time, they are more inclined to buy more beverages or food and music from the online stores that Starbucks is partnering with in its Digital Network. Starbucks is going to be able to sell its music, as well as other forms of media through its introduction of wireless internet. In January, an announcement was made that sales increased by 4% after months of decline after the introduction of the wireless internet (Miller, 2010). Wireless internet is a major strategic asset to Starbucks, and it will continue to help them in the future countries that they introduce it to.
Another strategic asset to the company is the decision to enter India as a new international destination for business. India has a growing economy and upper and middle classes; because of this, Starbucks will be able to help open the eyes of its citizens to specialty coffee (Bose, 2011). Although a store has not been opened yet, India has a high propensity for the specialty coffee industry as it becomes more industrialized. Its citizens are starting to refrain from tradition and embrace new and trendy styles.
Another major country for Starbucks to explore is China. Starbucks recently entered China, and it is focusing on the growth potential that China currently has with coffee sales growing 9% just last year (Burkitt, 2012). With continual growth in China, Starbucks will be able to take on McDonald’s as it begins to expand its coffee business. China is currently on its way to being the second-largest coffee market, leading Canada, the United Kingdom, and Japan (Burkitt, 2012). This means that Starbucks will...