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Starbucks International Marketing Strategy

Starbucks International Marketing Strategy

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Published by: Faezatul Mastura on Oct 14, 2011
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Starbucks International Marketing Strategy - Presentation Transcript

1. The world's #1 speciality coffee 2. STARBUCKS - Overview o Starbucks Corporation is an international coffeehouse chain based in o Seattle - United States. o Starbucks is the largest coffeehouse company in the world. o Operates 16,635 stores in 50countries, including 11,068 in the United o States, while licensees and franchisees operate more than 7,800 o units worldwide (primarily in shopping centers and airports). o Product Lines o - Beverages – Coffee, Tazo Tea, Soda, Juices o - Pastries o - Whole coffee beans o - Merchandise – Mugs ,CDs 3. STARBUCKS - Overview o Through the Starbucks Entertainment division and Hear Music brand, o the company also markets books, music, and film. o Many of the company's products are seasonal or specific to the o locality of the store in various countries. o From a single small store that opened in 1971 to its status as a o 21st-century Gourmet coffee giant, Starbucks has led a coffee o revolution in the United States and beyond. o Its three largest overseas markets are Japan (with more than o 480 stores), England, (more than 370) and China and Taiwan o (each with about 120 stores). 4. STARBUCKS – National Culture to Global vision Starbucks Ensures that - Growth does not dilute the company's culture and the common goal of the company's leadership to act like a small company. To create “Distinctive Starbucks experience" in the face of rapid expansion. 5. o The following six guiding principles to measure the appropriateness o of decisions: o Provide a great work environment and treat each other with respect o and dignity. o Embrace diversity as an essential component in the business is done. o Apply the highest standards of excellence to the purchasing, roasting o and fresh delivery of coffee. o Develop enthusiastically satisfied customers all of the time. o Contribute positively to communities and environment. o Recognize that profitability is essential for future success. STARBUCKS MISSION Statement – Spanning Boundaries Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining uncompromising principles while growing. 6. STARBUCKS - Industry and Competitive Analysis o Market Structure

Domestic store expansion o . and store atmosphere differentiation to establish market niche. Industry PEST Analysis o Political Influences  Relationships between coffee producing nations and US  State & Local government controls o Economic Influences  Constant demand for food and beverages  Changes in disposable income could influence purchase levels o Social Influences  Consumer preferences could shift from coffee to other beverages o Technological Influences  Use of technology can improve operational efficiencies 8. o Resources and capabilities to serve an attractive niche.Store ambience . Planning and construction o . o Global Market Segments National Product HYBRID II MARKETING STRATEGY 10. o Achieve profitability. 11. attractive social atmosphere. Monopolistic Competition Competitive Activity  Many companies are in the market and competition is fierce. Store design. o Be profitable and offer good growth potential.Global Marketing Mix Strategy o Retailing formula is same throughout the world whereas o product offerings and are modified to suit local tastes.  Major start-up expenditures are property and equipment. o Have unique capabilities to serve needs of target o buyer segment.Employee training and recognition o . o Create a great working environment.Real estate. o Industry Costs and Capital Structure  Low to moderate costs for each location. STARBUCKS .  Major operating costs are labor and cost of sales. product mix.Corporate Strategy Overview o Maximize market penetration. 7. 9. o Offer high-quality products. o The advertising strategies adopted by the firm are more local o and differentiated rather than standardized.International store expansion o . STARBUCKS – Competitive Strategy o Focused Differentiation o Serve niche buyers than rivals. o Starbucks advertising strategies play a crucial role in the o success of the business.  Competitors use location. o Rapid Store expansion Strategy o . STARBUCKS . o Provide a relaxing.

15.High visibility store locations . STARBUCKS . o Starbucks focuses on profitable growth. Japan.Assessment of standards. o Starbucks aggressively cluster new stores in prime locations o in the world's fastest growing economies.Why Globalize ? With just 20% of the world's coffee consumed in North America. Taiwan and Korea to o maximize profits.S. Starbucks has to aggressively sell its offerings in countries that already have dedicated coffee or tea drinkers. STARBUCKS – American Coffee round the world o Starbucks had to face issues in developing its international o business portfolio.o o o o o Product Line Coffee purchasing Strategy Rapid Store expansion Strategy – „ Starbucks Everywhere‟ approach International Store Expansion .Screening . o o o o o o o o o o o o o Employee Training and Recognition . o Reaching Brand Maturity stage in U.Corporate Strategy 12. STARBUCKS . 14.Control of average store operations cost . o Starbucks introduces its full range of products in phases.Broad Range of store formats .Company owned .Award for partners Real Estate. . Store design . STARBUCKS .Corporate Strategy 13. hire and train Baristas and Store managers . o Selectively introduces specific products like its ready-to-drink coffee o beverages to specific countries Eg.Concept of „Everything matters‟ .System to recruit.High traffic .International expansion o Starbucks‟s initial foreign forays were launched through joint . o Issues : o International joint ventures o Culture o Gender issues o Marketing channels o Cross-cultural management issues o Saturated home market – leading to self cannibalization.Training Programmes . selling o coffee and other beverages including tea and juices through retail o stores in international countries.Company operated stores or Licensing.Planning and Construction.WI-Fi availability Store Ambience . STARBUCKS .

are inside other stores or in limited or restricted access spaces. saturating the market). a Japanese retailer and restaurateur. o o o o o o o o o Starbucks fueled its initial expansion into the UK market with a buyout of Seattle Coffee Company and then used its capital and influence to obtain prime locations. as to not dilute the brand image.International Entry Strategies 18.International Entry Strategies 17. Younger coffee drinkers in France joined American tourists in Paris to embrace such favorites as Starbucks caramel coffee. Intentionally operating at a loss. Clustering several locations in a small geographical area (i. franchise system. which permits Starbucks franchises only if they contribute to less than 20% of the franchisees gross income. with older consumers frowning on a big U. 16. Some of the methods Starbucks have used to expand and maintain their dominant market position : Buying out competitors' leases.o o o venture and licensing arrangements with prominent local retailers. Some 30% of its customers drink o take-out coffee in those throwaway cups Japan o o o o o Starbucks had to deal with an initial lack of acceptance from France's historic cafe culture. Starbucks in the 2000s greatly increased its &quot. some of which operated at a financial loss. o Key to success in China are coffee houses that empower China's o emerging middle class to publicly display their new lifestyles and o status while keeping Starbucks beverages as affordable luxuries.licensed store&quot.. coffee house chain with standardized disposable cups. Globalization – Issues faced and Tackled in different countries o The company is aggressively expanding in China where Chinese o traditionally prefer tea. o Critics warned that the Japanese would never buy take-out coffee in o paper cups or accept the interior non-smoking policy. . STARBUCKS . o o o o o o STARBUCKS .S.e. France 19. o Starbucks proved them wrong. The first market developed in 1996 was Japan with the help of SAZABY Inc.. Globalization – Issues faced and Tackled in different countries o The Japanese are noted for admiring and adopting American products o and trends such as blue jeans and Coca-Cola.

We recognize that our success is not an entitlement. STARBUCKS – CULTURAL DIVERSITY o o o . Starbucks has made a business out of human connections. o re-branding all the stores as Starbucks. 23. o Starbucks entered the U. where we work and in the countries where our coffees are produced. Chairman Howard Schultz “ We remain highly respectful of the culture and traditions of the countries in which we do business . 20. Starbucks completed the purchase of Seattle's Best Coffee o and Torrefazione Italiafrom AFC Enterprises. Communities . o in 1996. Shared values. 21. Partners (Employees) . o In September 2006. community involvement and the celebration of cultures.” Starbucks is dedicated to supporting communities around the world – where we live. good leadership and a strong track record are among the most important qualities we look for. STARBUCKS – Benefits of Mergers and Acquisitions o The first Starbucks location outside North America opened in Tokyo. Tackling imitators aiming at reducing market share of Starbucks. Suppliers . strategic fit. UK-based Seattle Coffee Company. Diversity is defined in the form of an equation.Extend the Starbucks Experience to all customers. Customers . we wouldn‟t be the universally respected brand we are today without their commitment to bringing our coffees to the world. Japan. o In April 2003. and we must continue to earn the trust and respect of customers every day . Built on Great Global Partnerships We owe much of our global success to our international partners . At Starbucks.K. market in 1998 with the $83 million o acquisition of the then 60-outlet.Focusing on partner development by educating and engaging partners. rival Diedrich Coffee sold most of its o company-owned retail stores to Starbucks. and enables its employees to do their best work. In fact. recognizing and responding to their unique preferences and needs by connecting with customers in a culturally relevant way. STARBUCKS – CULTURAL DIVERSITY Diversity at Starbucks Aside from extraordinary coffee. genuine service and community connection Transcends language and culture. Culture of serving food with coffee – Starbucks had to address the demand.China England o o Second biggest overseas market for Starbucks. Diversity = Inclusion + Equity + Accessibility With a presence in over in over 50 countries. Italy Lower pricing and popularity of local brands.Trusted and welcoming company for suppliers through supplier diversity program Starbucks is dedicated to creating a workplace that values and respects people from diverse backgrounds. Starbucks Corporation M&A Summary Year Acquisitions Stakes Divestitures 2010 0 0 0 2009 1 0 0 2008 0 0 0 2007 0 0 0 2006 4 0 0 2005 3 0 1 2004 1 1 0 2003 4 3 2 2002 0 0 0 2001 1 0 0 2000 0 0 0 1999 2 1 0 1998 2 0 0 1997 0 0 0 1996 0 0 0 1995 0 1 0 1994 1 0 0 Total 19 6 3 22. Passion for great coffee. STARBUCKS – CULTURAL DIVERSITY Respect for Local Cultures 24.Support and invest in local neighborhoods and global communities through strategic partnerships and economic development Opportunities.

STARBUCKS – Global HRM 30. The company's human resource policies reflects its commitment to its employees. STARBUCKS – Global HRM 29. International President CEO Thailand VP. Supply Chain & Coffee Executive VP. Starbucks Coffee Company (Starbucks) was o placed second among large companies in the Fortune &quot. including part-timers. o Starbucks stands out for its employee-friendly policies and supportive o work culture.My biggest fear isn't the competition. STARBUCKS – Global HRM The relationship we have with our people and the culture of our company is our most sustainable competitive advantage . Europe. dependability and the ability to work in a team. -Jim Donald. Coffee Executive VP. chairman and chief global strategist of Starbucks &quot. Northwest VP. STARBUCKS – Store Structure Functional in structure and relatively flat 27. Starbucks hires people for qualities like adaptability. Company takes great care in selecting the right kind of people and makes an effort to retain them. o Starbucks employees are among the most productive in the o industry and the company has a relatively low employee turnover. Legal Australia United Kingdom  Corporate organization has four levels of management above store management. Starbucks is one of the few companies who invest considerably in employee training and provide comprehensive training to all classes of employees. president. Japan Senior VP. o STAFF TRAINING .&quot. Howard Schultz. North America President.&quot. o o o o o o o o o o o Starbucks relies on its baristas and other frontline staff to a great extent in creating the 'Starbucks Experience' which differentiated it from competitors. although I respect it.Organization Chart President. o The company is noted for the extension of its benefits o program to part-time workers .Best Companies o to Work For&quot.To have the right people hiring the right people. STARBUCKS . 26. 28. Starbucks recruitment motto is &quot. Middle East. Starbucks invests in training employees in the skills they would require to perform their jobs efficiently.something that not many other o companies offer.&quot. Chief Financial Officer Executive VP. South Central VP. Southwest President. Starbucks North America in 2005 Starbucks realized early on that motivated and committed human resources were the key to the success of a business. Africa President. It's having a robust pipeline of people to open and manage the stores who will also be able to take their next steps with the company. Partner Resources Executive VP.25. o In January 2005. survey.

36. o Increasing penetration across countries Eg. and purchasing. o Entering in growing economies such as India. o The system provides Starbucks with the ability to centrally manage and o deliver contract-based products and pricing in different languages o for its global distribution. effective pipeline o management. Thank You . o Starbucks uses the Onyx system to manage corporate sales activities o including efficient delivery and management of leads. Channel Members Orders. o Starbucks deploys Blue Martini's order management system to its o retailers and Channel partners. which educates employees in coffee tasting. Transfers Vendors.o o o o o Black aprons displaying the title &quot. STARBUCKS – Training 31. restaurants. Staffing Sales. STARBUCKS– Global Knowledge Management Benefits MyStarbucksIdea. Budgets. Starbucks VIA o Managing cultural diversities. and more immediate o resolution of customer issues for their Foodservice business. Staffing Individual Stores Inventory. Orders. o Eg. o The Foodservice team focuses on delivering Starbucks products to o operators in hotels. Mgmt. Distributors. roasting. are worn by employees who have completed the Coffee Master course. colleges and universities. Employees were rigorously trained. China. Future Sales 32. growing regions..com Starbucks Wi-Fi 35. o and business and industry.Coffee Master&quot. o Blending Tastes with Technology – Use of KM o for sustainability. STARBUCKS – Future Trends and Global Competitive Advantage o Continuity of Innovations in the coffee business. completing at least 25 hours of coursework on topics. Inventory. 34. faster activation of new accounts. STARBUCKS– Global Knowledge Management Benefits Starbucks cards MyStarbucks iPhone app o Let customer use iPhone as their Starbucks card. Inventory. STARBUCKS– Global Knowledge Management Use of IT In Knowledge Management Corporate IT System Individual Stores Individual Stores Sales. STARBUCKS– Global Knowledge Management 33.

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