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GROUP 8
2013
[GROUP 8] June 30, 2013
STARBUCKS 1
A. EXECUTIVE SUMMARY
Starbucks Corporation is an international coffeehouse chain founded in Seattle, Washington
that serves whole-bean coffee, espresso-based hot drinks, other hot and cold drinks, snacks,
and items such as mugs and coffee beans. Starbucks-brand products are also offered at
grocery stores, supermarket and warehouse club stores. The overall goal of Starbucks
Management was to create an American version of the Italian coffee bars that Howard
Schultz-current Starbuck CEO had experienced first-hand in Milan. Starbucks stores function
as an important part of community, a pleasant meeting place for its customers while enjoying
coffee. Thus, it is not only a simple coffee house but also a satisfying experience that would
differentiate itself from its competitors.
Since its foundation in 1971 as a local coffee bean roaster and retailer, Starbucks has become
the premier roaster, marketer and retailer of specialty coffee in the world, operating in 62
countries with about 18,000 total stores. Under the leadership of Howard Schultz, President
and CEO, the company has not only grown in the United States, world-wide expansion has
been spectacular. The main objective of Starbucks has been to expand their market share of
high premium coffee into international territory. Starbucks had a two-pronged store
expansion strategy: either open company-owned-and-operated stores or else license a
potential local company with strong retail experiences to develop and operate new Starbucks
stores. Starbucks preferred licensing to franchising because they could control easily the
operating production and the quality of coffee as well. As of April 2012, Starbucks had 4,161
licensed stores in the United States and 4,121 licensed stores internationally. Their strategy
has worked effectively and helped Starbuck gain a lot of success in global market.
Regarding long-term direction, to expand Starbucks brand internationally, they should focus
on some potential Asian market with large population such as China, Thailand, Vietnam and
others. To reach expansion goal, they should also research carefully foreign market to analyze
the different cultural features such as habit, flavor and interest among many countries where
they intend to invest. In addition, Starbucks need to do some advertising campaign, social or
environmental projects to make their bran to be more popular and reputable in world-wide
market.
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STARBUCKS 2
B. CASE ANALYSIS
I. INTRODUCTION
Starbucks, a global coffee giant has been well-known because of its high-quality products and
professional services in over the world. According to Starbucks, they are not just passionate
purveyors of coffee, but everything else that goes with a full and rewarding coffeehouse
experience. This is the way of Starbucks leverages its customer loyalty, premium quality
coffee and the homey atmosphere to fend off competition.
II. ANALYSIS
1. STARBUCKS STRATEGIC VISION
Howard original strategic vision was to establish Starbucks as a national company from a
localized company operated in Seattle. In August, 1987 Schultz told in the employee meeting
that his vision was for Starbucks to become a national company with values and guiding
principles that employees could be proud of. Schultz management ideas was ahead of his
time, he actually want it to included employees in the decision making process, to create an
open and honest relation. He believed that if employees were to take part of the decision, the
greater the chance for the company to proliferate and become successful, since they would
feel part owners.
His strategic vision has changed three times which are:
- Localization to nationalization
- International expansion
- Vertical and horizontal integration to expand product offerings and enter new market
segments.
A company‘s strategies always work in process and strategic vision reflects in the strategies.
In this case, Starbucks‘ strategic vision in 2011-2012 is likely to undergo further evolution.
Their next vision is to expansion of business in China, India and Vietnam in large scale. To
coup with their investment and growth strategy, they may enter into new market segments.
2. STRATEGY
Starbuck‘s strategy adapted as the vision evolved, especially during the transition of being
bought by Howard Schultz. The strategy had to shift from a small scale operation of selling
beans and espresso roasters to a large scale operation with hundreds of locations that sold
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STARBUCKS 3
coffee beans & equipment while also serving café food to patrons. Additionally, Schultz
wanted the stores to be reminiscent of Italian espresso bars, highly focused on employees‘
satisfaction & respect, and retained full company control.
Schultz realized that Starbucks had to lose money and be heavily invested in three things in
order to succeed:
o Attract a sophisticated management team
o Build a state of the art coffee bean roasting facility.
o Invest in an integrated IT system to keep track of all the stores.
In recognizing this Starbucks strategy focused on building a coffee company exceeding that of
every other brand available in the world. To compete with other brands, the company has to
concentrate on the strength as well as influence of the competitive forces operating in an
industry. Far and away the most powerful and widely used tool for diagnosing the principal
competitive pressures in a market is the five forces model of competition.
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STARBUCKS 4
PORTER’S FIVE FORCES TABLE OF STARBUCKS
Porter’s Five
Forces
Industry
Profitability Details
Industry
Profitability
Rivalry
among
competing
firm
HIGH
There is intense competition in the coffee
market amongst established coffee shops
that are fighting to get customers. There
are local coffee shops offering specials to
lure potential customers in. Restaurants are
opening earlier and closing later to
accommodate customers on the go. With
the 85% North American customers taking
their coffee to go, convenience is a major
factor.
LOW
Potential of
new
competitors
HIGH
There is a great deal of risk of entry by
potential competitors due to the low startup
costs. McDonalds is able to add specialty
coffee to their existing services to tap into
the specialty coffee market. There is
potential of $125,000per year in revenue to
be made by each store if they are able to
successfully enter the specialty coffee
market.
LOW
Potential
development
of substitute
products
HIGH
Water is a substitute which is healthy for
us and it is free. The option to buy bottled
water is also in expensive compared to
coffee. With the focus on healthier living,
water is the ultimate choice.
LOW
Bargaining
power of
suppliers
HIGH
There is more bargaining power for
suppliers of technological innovations such
as automated coffee machines, latte and
espresso machines, etc. because there are
not as many suppliers for such equipment
as there are for coffee beans.
LOW
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STARBUCKS 5
Bargaining
power of
consumers
HIGH
Customers did not really have bargaining
power when it came to premium coffee
such as Starbucks. The sheer scale of
Starbucks ‗business reduces the bargaining
power of any single group of buyers.
LOW
3. FIVE GENERIC COMPETITIVE STRATEGIES
Although Starbucks follows many of the five generic competitive strategies the strategy they
follow most closely is the broad differentiation strategy. Starbucks has put an emphasis on
product differentiation in order to keep up with their ever-expanding company base. Starbucks
offers such a multitude of products, which allows them to appeal to a variety of consumers.
There are seven differentiating features of the generic competitive strategies
Strategic Target- Starbucks has a broad market and they are able to meet the needs of
a multitude of consumers. They are able to reach the more on-the-go customers
through their VIA Ready Brew, health conscious customers with their Vivanno
smoothies, at home consumer through their grocery store sales, as well as
international consumers through their overseas expansion.
Competitive Strategy- Starbucks has always emphasized that the products Starbucks
sells are important but just as important is the atmosphere of each individual
Starbucks location. Each location is designed specifically to fit its geographical
location. These specialized stores allow for even further differentiation from
competitors whose stores are usually the same no matter the location with slight
variations.
Product Line- Starbucks has an immense number of products in which they offer
compared to its competitors. They offer everything from the specialty coffees sold in
stores to ice cream, t-shirts and other merchandise, liqueur, food products, etc.
Starbucks product line is ever expanding and evolving.
Product Emphasis- Starbucks‘ products are guaranteed high quality even with such a
broad variety of products available. From the beginning of Starbuck‘s their claim to
fame and emphasis has been on the high quality of their goods especially coffee. This
is one of their main differentiating principles to make sure they always have the
highest quality products available to the consumer.
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STARBUCKS 6
Marketing Emphasis- Another differentiating factor of Starbucks is the atmospheres
of each individual location. They make sure that customers are comfortable and
happy with the service. They train their staff intensely in order to provide the best
customer service possible. This helps market to a variety of consumers who know the
high quality of both the products and service available at Starbucks.
Keys to Maintaining Strategies- Starbucks is constantly innovating their products and
store locations. They have gained many new partnerships and entered many new
market segments. They have created partnerships with companies spanning from
iTunes to food distributors such as Kraft Foods. Starbucks is continuously becoming
more innovative through their various offerings.
Capabilities Required - Starbucks offers broad differentiation by providing products
that are extremely high in quality and an extremely innovative business model. This
allows for differentiation across the entire spectrum of the Starbucks Corporation.
4. THE KEY POLICIES, PRACTICES, BUSINESS PRINCIPLES AND
PROCEDURES
The key policies that have been implemented in this case can be broken down into five groups
which are store expansion, international expansion practices, staff training, the ethical
business principle and coffee roasting practices.
Store Expansion
Starbucks management‘s approach to store expansion is using a hub city approach. After
choosing suitable demographic area, Starbucks begins to open up stores in a large city that
serves as its hub. This expansion strategy serves to create buzz and brand recognition for the
company in an area that has a high amount of foot traffic before moving into a location that
has less customer traffic. When a new area was selected for expansion a group of
professionals were sent to facilitate the opening. Starbucks also had zone vice presidents who
would oversee the expansion process and instill the culture of Starbucks in the new stores.
International Expansion
When expanding internationally Starbucks has two options; they either open company-owned
and operated stores or license to a company that has a good reputation and the knowledge of
retailing in that area. Starbucks prefers to license, rather than franchise because licensing
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STARBUCKS 7
provides more assurance of quality control. When they move into foreign markets one of their
practices is to use a partner or license to help recruit individuals for employees, set up
relationships with suppliers, find store locations, and learn how to cater to local market
conditions.
Staff Training
As mentioned previously, employees are put through an extensive amount of training to learn
daily practices and how to treat customers. They are put through this training because
customer service is so integral to their organization. Some of the things that baristas learn in
their 24 hours of training are coffee history, drink preparation, coffee knowledge and so on.
Managers were required to go even more in depth with their training.
Ethical Business Principles
Starbucks purchases products that are Fair Trade Certified, meaning that farmers make a fair
amount of money for their products. They are very involved in Corporate Social
Responsibility and take a number of measures to reduce, reuse, and recycle. They are also
committed to purchasing from companies that use environmentally sustainable growing
practices.
Coffee Roasting Practices
Coffee recipes are put together by the coffee department once all components have been
tested. In order to be sure of consistency computerized roasters are used. Trained personnel
are required to monitor the process by using hearing and their sense of smell to check when
the beans are perfectly done. There are extremely exacting standards that must be met and the
color of the beans is tested in a blood-cell analyzer and if it doesn‘t meet the requirements the
batch is discarded.
5. STARBUCKS’ “VALUE”
Starbucks cornerstone vale is “to build a company with soul”. This value has been instilled
since the company was created. They also value employees‘ input on what pleases customers.
Employees were given the theme “just say yes” in order to keep customers coming into
Starbucks locations. They also want employees to speak their minds in order to voice what
they believe is going wrong within Starbucks as well as anything they have seen as positive or
working well for the company.
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STARBUCKS 8
In Starbucks’ Mission Statement there are six main values that are to be focused on. They are:
Our Coffee, Our Partners, Our Customers, Our Stores, Our Neighborhood, and Our
Shareholders.
Our Coffee- Starbucks has always strived to
have the highest quality coffee. They do so by
buying the best beans, and continuing to make
sure that the roasting of the coffee was done to
perfection. They also make sure that the small
coffee growers Starbucks uses for their beans
were able to have enough earnings to compete
in the global market.
Our Partners- Starbucks as discussed previously holds a special importance on the well-being
of their employees or partners. In order to do this they offer incentives, benefits, and awards
to their employees to make sure they understand their importance within the company. The
success in this can be measured by their inclusion on the Fortune magazine ―100 Best
Companies to Work For‖ list.
Our Customers- Starbucks goal has always been to make their locations are a pleasant place
to visit. They are successful in doing this through the extensive training given to new
employees to teach them customer service.
Our Stores- Starbucks first influence was the Espresso shops in Italy. They saw how happy
the people inside were and how fantastic the ambiance of each store was for costumers. In
order to emulate a similar atmosphere their various locations are also designed specifically to
fit the geographical area each store is in. This helps to make customers feel more at home and
at peace when they visit Starbucks.
Our Neighborhood- Starbucks understands that each store is a part of a specific community.
They also know that they must contribute positively to their surrounding communities. They
do so through being good neighbors, and also engaging in many different community service
projects such as the Starbucks Youth Action Grant, which is given to young people within
specific community monetary aid in community service.
Our Shareholders- Starbucks also recognizes that they have a duty to their shareholder to
make their company as successful as possible. Their goal is to keep investors happy and do
whatever is possible to make the company thrive to benefit said investors. They have done
this so far by becoming the global powerhouse that Starbucks is today.
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STARBUCKS 9
6. STARBUCKS’ CORPORATE SOCIAL RESPONSIBILITY
Howard Schulz main effort to ―build a company with soul‖ includes an extensive social
responsibility strategy. He wanted to make sure that Starbucks had a way of doing business
that was both socially and environmentally conscious. In 1997 the Starbuck Foundation was
created in order to manage the company‘s philanthropic activities. Starbucks corporate
responsibility has four main elements:
Ethically sourcing all of the company’s products- This has to do with their activity in
buying from suppliers of coffee beans that are only Fair Trade Certified or practice
C.A.F.E guidelines. By 2015 Starbucks hopes to purchase 100% of their coffee
through Fair Trade suppliers.
Community involvement- Starbucks strives to be active within the communities they
reside in. They have a goal of having their partners and customers contribute 1 million
hours of community service by 2013. Starbucks also created the Starbucks Youth
Action Grants in order to help young people get involved in community improvement
projects. All of these community involvements are keys in Starbucks CSR initiatives.
Environmental stewardship- Starbucks also strives to decrease their waste, use
renewable energy, and increase recycling, make facilities more green and overall to
help address the climate change more. They have set many goals such as by 2015 to
ensure that all of its cups were reusable or recyclable, to have front-of-store recycling
in each store, and to reduce water consumption by 25%.
Charitable contributions – Starbucks Foundation made charitable contributions
totaling $10.3 million in cash and $6.7 million in kind contributions toward
community-building programs.
All of these initiatives have led to a very positive image for Starbucks who in 2012 was
named to the Corporate Responsibility Magazine‘s ―100 Best Corporate Citizens‖ for 2010.
7. FINANCIAL PERFORMANCE DURING FISCAL YEARS 2007-2011
Total net revenues rose from $9.4 billion in fiscal 2007 to $11.7 billion in fiscal 2011,
a compound average growth rate (CAGR) of 5.6%.
Revenues at company-operated stores rose from just under $8.0 billion in FY 2007,
$9.63 billion in FY 2011, a CAGR of 4.8%.
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STARBUCKS 10
Revenues from licensed stores climbed from $660 million in FY 2007 to just over
$1.0 billion in FY 2011, a CAGR of 11.1%.
Operating income increased from $1.05 billion in FY 2007 to $1.73 billion in FY
2011, a CAGR of 13.2%.
Net earnings attributable to Starbucks increased from $672.3 million in FY 2007 to
$1.25 billion in FY 2011, a CAGR of 16.6%.
Net earnings per common share (diluted) jumped from $0.87 in FY 2007 to $1.62 in
FY 2011, a CAGR of 16.8%.
The company‘s current ratio improved significantly from a low of 0.78 in FY 2007 to
a much stronger 1.28 in FY 2011.
Despite expanding the number of company-operated stores domestically and
internationally from 8,624 in FY 2007 to 9,031 in FY 2011, Starbucks long-term debt
has remained flat at ~$550 million throughout fiscal years 2007-2011, and the
company‘s debt to equity ratio in FY 2011 was a meager 0.12. Plainly, the company‘s
long-term debt is under control and is neither burdensomely high nor an impediment
to further store expansion.
Starbucks‘ net cash provided by operations has been adequately high to fund the
company‘s capital expenditures throughout fiscal years 2007-2011.
The annual percentage changes in sales at both domestic and international company-
operated stores open 13 months or more have improved significantly in the past
two fiscal years (2011 and 2010). Some other operating and profitability stats based on
the data in case Exhibit 1:
Fiscal Years 2011 2010 2009 2008 2007
Cost of sales as a percentage of
total net revenues 42.3% 41.6% 44.2% 44.7% 42.5%
Store operating expenses as a
percentage of net revenues from
company-operated stores
38.0% 39.6% 41.9% 42.7% 40.2%
General and administrative
expenses as a percentage of net
revenues
5.4% 5.3% 4.6% 4.4% 5.2%
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STARBUCKS 11
Operating income as a percentage
of net revenues (operating profit
margin)
14 .8% 13.2% 5.8% 4.9% 11.2%
Net earnings as a percentage of net
revenues (net profit margin) 10.6% 8.8% 4.0% 3.0% 7.1%
Return on equity (net income ÷
shareholders‘ equity) 28.4% 25.7% 12.8% 12.7% 29.4%
8. STARBUCKS’ CEO
Starbucks under Jim Donald’s
management (prior to Schultz’ return in
January, 2008)
Starbucks under Howard Schultz’s
management (after Schultz’s return in
January, 2008)
- The company‘s stock price drifted
downward through much of 2007.
- Customer traffic in Starbucks stores in
the U.S began to erode in 2007.
- New stores openings worldwide were
continuing at the rate of six per day
- Efficiency in store operations were at
the expense of customer services.
- The productivity of Starbucks‘
employees in U.S company-operated
retail stores increased from an average
of 9.8 trancsactions per labor hour in
fiscal 2008 to 11.3 trancsactions per
labor hour in fiscal 2011.
- The percentage change in sales at
company-operated retail stores open at
least 13 months had risen from -9
percent in Q1 of fiscal 2009 to +4
percent in Q3 of fiscal 2010 and then
remained in the range of +7 to +9
percent every quarter through Q2 of
fiscal 2012.
From these cited evidience mentioned above, Howard Shultz‘s return in the role of CEO
became the centerpiece of today Starbucks‘s prosperity. He proves not only intrimental in
building the business from the ground up but also a effective, visoinary top manager.
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STARBUCKS 12
When evaluating Schultz‘s return, we can not overlook what he managed to do to preserve
and enhance the company‘s values:
First, immediately after his return, he revamped the company‘s executive leadership team and
changed the roles and responsibilities of several key executives.
Second, he improved Starbucks‘ passion for customer relationships and the coffee experience
by hiring a former Starbucks executive to fill the newly created position of chief creative
officer responsible for evaluating the in-store experience of customer and achieving new
levels of innovation and differentiation.
Third, he lauched a series of actions to recast Starbucks into the long-term vision; prepared
for renewed global expansion of Starbucks retail store network.
Schultz‘s efforts and leading talents can account for his successful comeback because no
matter what role he take, as a chairman or as a CEO, he always shows a consistent managing
idea: ―Putting the customers at the center of eveything we do…‖.
Moreover, he expresses a true love and devotion to coffee and then passes it on his customers.
This may be the underlying reason behind the secret success of Starbucks: The truly
passionate coffee experience.
Finally, last but not least, from the point of a CEO, Schultz aways shows his concerns for his
shareholders, customers and patners
In a word, what can be seen in reality has not convincingly proved that Schultz‘s return
bringing a new breath of fresh air to Starbucks but also that he is an outstanding manager
model; especially from his return in January, 2008.
9. THE STARBUCKS’ PROBLEMS IN MID-2012
- Starbucks tried to expand its brand well beyond coffee, it began to sample and sell the
Evolution Fresh juice line in Starbucks stores and also distributed and sold it at major grocery
chains. This type of expansions into the grocery stores is a key mission for Starbucks.
- Starbucks remained in the ranged of +7 to +9 percent every quarter through Q2 of fiscal
2012.
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STARBUCKS 13
- The most important issues that Starbucks faced was expanding internationally. Breaking
into international markets is always hard for companies. One reason it is hard to break into
international markets is due to the lack of brand awareness.
+ Starbucks was anxious to begin opening stores in India and Vietnam, two country
markets that Starbucks believed were potentially lucrative. As of April 2012, no stores had yet
opened in either Vietnam or India.
+ Most people in India are not drinking coffee. Starbucks‘ arrival in India may put the
country‘s coffee market on the map, but Indian‘s growing taste for coffee has been years in
the making. In coffee-producing southern India, coffee has long trumped tea as the drink of
choice, but the industry has thrived on exports, rather than cultivating and deepening local
consumption.
Instead, tea is king in India. It has been consumed for thousands of years, and is still a
staple of the Indian palette. The tea industry itself is also one of the strongest drivers of its
economy — it accounts for 31 percent of the global production and generates income for
millions of people in the country. So Starbucks, a company known for selling coffee, must
promote its brand in a country that prefers an alternative beverage.
+ Starbucks was likely to encounter difficulties in Europe due to the fierce competition.
The coffee culture in the Old Continent has deep roots, and the current political discord
between the U.S. and Europeans may exacerbate the already problematic anti-Americanism
sentiment over there. An American brand is very likely to face a strong resistance, and unless
a new brand is created that matches with the Europeans culture and perception, Starbucks‘
growth will be slower in Europe than Asia, and much slower than what it experienced in the
U.S. For instance, many Europeans are still used to smoke when drinking coffee, which seems
opposed to the original approach of Starbucks to ban smoking in their coffee shops.
Starbucks has chosen to follow a multi-domestic approach to international expansion,
meaning that they customize their products offerings to match the tastes and preferences of
local buyers. Therefore, Starbuck‘s management should be worried about putting a great deal
of time and money into researching the customs and atmosphere of the countries they were
moving into. Also, Starbucks needs to know exactly what that group of people wants and
prefers, make partnerships and licensing agreements with reputable companies in order to be
[GROUP 8] June 30, 2013
STARBUCKS 14
sure that culture of Starbucks is continued to their new stores, and tailor their stores to fit the
environment they are in.
III. CONCLUSION:
To sum up, Starbucks is a great example of company which quickly catches the
opportunity to develop strongly by excellent strategies from incredible managers. The CEO
Howard Schultz has express his talents of having strategic vision in each growing period and
leading company to the right direction. The key policies, practices, business principles, and
ethical responsibility are the main factors assuring the whole system working well. However,
to better, Starbucks need to be wise and estimate rivals firmly and care domestic market as
well as international ones. Starbucks is a global icon and in the future, not only coffee market
but also economic, social area it will have big influence.
C. RECOMMENDATION
To increase sales and customers:
1. Starbucks should open the delivering ready-to-drink coffee service. If it works, many
Americans will have chance to drink their varied favorite flavor of coffee at their own
home instead of queuing up for bunch of minutes for a cup of coffee in every narrow
and noisy morning. It saves time for customers and earns money for company.
2. The working time of Starbucks starts at 5.30 AM and ends at 9PM, which could be a
limitation for people who want coffee for the rest of the day. That is why Starbucks
has to enhance the number of canned coffee or others drinks in the automatic selling
machines and locate them more in the public places .
3. The price of each Starbucks cup of coffee is premium high. With more than three
dollars for each cup, it could be a large expense for an everyday beverage. Company
should consider lowering the product‘s price or give additional gift to attract buyers.
For example, one free for who buy more than 5 cups in week day or free snack for
children in every Tuesday afternoon.
4. Company always participates in social activities to enhance its image in people‘s
mind. For instance, Starbucks store could sell stickers, labels with designs or words
that support victims of natural disasters, your favorite candidate for the President.
Many people might not drink coffee but they interest in such things.
To strengthen the internal and external relationship:
[GROUP 8] June 30, 2013
STARBUCKS 15
1. With suppliers:
Improving the connection with the suppliers is very important because no one wants to
lose good sources in rivals‘ hands. Starbucks should apply back-up policies for
farmers, always keep eyes on the political, economic, weather issues of suppliers‘
countries to assure the reasonable price and quality and quantity of coffee for
producing.
2. With main partners:
The partners of Starbucks are distribution channel, retailing system (Wal-Mart,
Costco), famous brands (PepsiCo, Unilever) or even competitors (Green Mountain). If
the agreement among these big names is met, they all attain great advantages in
market through collaborating and using others reputation and distribution to sell
products not relating their typical ones. One example is that Costco sells paper cups
which have logo of Starbucks on for cheap price and in turn, Starbucks pledges to use
milk or cream supplied by Costco.
3. With employees and shareholders:
For employees, the training program has to be adjusted and changed according to the
culture of each nation where Starbucks appears. Company also organizes the meeting
for all global branches to share experiences and tighten the bond among multinational
workers. For shareholders, company promises to provide full and accurate financial
report and assure their investments used right place.
Domestic and international expansion:
1. The U.S market:
After the return of Howard Schultz in 2008 with a series of action to recast company
due to the overloaded expansion of Starbucks coffee houses because of its ineffective
strategy, the increase of many numbers and index showed that people believe in
Starbucks again. Starbucks could plan strategy for wherever in the world but its home
country market is still the important point because among 18,000 cafes, the vast
majority of these are in the Americas, and particularly the U.S. Therefore, in America,
company has to enhance the distribution, increase more promotion program, and avoid
overlooking domestic problems while concentrate on international expansion.
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STARBUCKS 16
2. The International market:
It could be said that Starbucks is one of the most ambitious companies which desire to
have influences on worldwide market. Starbucks‘s products have been sold in almost
all continents in the world and there is a significant location ―presents the most
significant growth opportunity on a go-forward basis‖, said Howard Schultz,: Asia.
China and Japan have been big market of Starbucks for years and they still remain
their effects on worldwide revenue of company. Besides, others two countries that
Starbucks pays attention are India and Vietnam. Up to April 2012, no stores had yet
opened in either Vietnam or India. The barriers that company has to come over in each
nation are different. In India, tea is the king of beverage and there is only small
number of adolescent know about Starbucks. However, India is still a potential place
for Starbucks. The reason is that many America firms working in technology, industry
choose India as a location for offshoring. The culture integration of foreign engineers
about drinking coffee could have effects and create new trend among Indian
customers. Unlike India, Vietnam is the second best of exporting coffee in the world.
Obviously, the culture of drink coffee has been existed for long time in this country
and the price for coffee is much cheaper. To be successful in Vietnam, Starbucks has
to carefully investigate many domestic competitors to defeat them.
