Dilnare Erkin

1

• Dilnare Erkin
• Stephanie Figgins
• Blair Russell

2
HOW IT ALL STARTED

• 1971
• Jerry Baldwin, Zev Siegl, and Gordon Bowker
• Starbucks- first mate in Moby Dick
• Howard Schultz
• 1985 Il Giornale

3
THE STARBUCKSMODEL

• Become a great company with the most recognized
  and respected brand in the world, known for
  inspiring and nurturing the human spirit
• Clustering

4
THE STARBUCKSEXPERIENCE

• Stores are distinctive and sleek yet comfortable
• Baristas
• The third place
• Wireless internet
• Comfortable chairs
• Games
• Mini concerts

5
TQM THROUGHBENEFITS

• Quality and Service
• Partners
• Empowered employees
• Stock ownership
• Benefits
• 24 hours of training
• Coffee workshops

6
LEVERAGING THEBRAND

• Multiple channels of distribution
• Airlines
• United
• Brand extensions
• 1996 PepsiCo and Frappuccino
• Kraft Foods
• 1996 Dryers Grand
• 1996 - PepsiCo
• 1999 Tazo
• Hear Music and XM
• 2002 Double Shot

7
STARBUCKS COFFEEINTERNATIONAL

• 1995
• Peter Maslen
• First non American Starbucks in Tokyo, Japan in
  1996
• Now 14,000 stores in 42 countries

8
STARBUCKS AND GLOBALIZATION

• Politics
• Media
• Demographics
• Culture
• Trade Barriers
• Franchising
• Licensing
• Anti-Globalization

9
STRENGTHS

• Business, Corporate and Functional Level
  Strategies
• Customer Responsiveness
• Quality as Reliability
• Superior Efficiency
• Very Hard To Compete With
• Low Cost Structure
• Vertical Integration
• Branding
• Well Known and Established
• Adds Value to The Product Because it is Well
  Known
• Competitive Advantage
• Dominated U.S. Market
• Very Fast Growing, High Profits
• Name People Think of When They Think of Coffee

10
WEAKNESSES

• Global Strategy Encounters Higher Costs
• Fears Of A Globalizing Franchise
• Receiving Bad Media Attention
• Harder To Venture Into International Markets
• Starbucks already Expanded In The U.S. Market.

11
OPPORTUNITIES

• Dominated U.S. Market
• Growth and revenue allow the company to move into
  the International Market
• Lots of Capital to move quickly into
  International Sector
• Main competition in foreign markets are small
  local coffee shops
• Success in markets such as China, Phillippines,
  U.K. and Spain.
• New Market Segments in foreign countries
• Cater to local foods
• Success in Japan
• Allows Starbucks to dominate even hesitant areas
• Good relations with Local Markets
• Creates political affiliation
• Allows Starbucks to move into an area with ease
• Strategy is Key

12
THREATS

• Growth and Fame Make Starbucks An Easy Target For
  Anti-Globalization
• Coca Cola Vs. Starbucks
• Media Attention
• Creates image America is taking over
• Less revenue from using local politics to
• establish stores
• Local Politics absorbs 20-50
• of the profit via deals
• Some Cultures Resistant To Mold Into Americas
  Corporate Plans
• Chinese Forbidden City Known For Artifacts
• Japan Had Success
• Resistance causes loss of profits from pull out

13
FUNCTIONAL-LEVEL STRATEGIES

• Functional level strategies are strategies
  aimed at improving the effectiveness of a
  companies operations by increasing efficiency,
  quality, innovation and customer responsiveness.
  By doing this the company hopes to improves its
  profitability and competitive advantage.

• Blanket an area completely
• Profits go up with more stores
• Sometimes results in a reduction in profits
  because less customers per store
• Blanketing produces less costs cuts down the
  delivery costs, management costs and traffic for
  each store
• Stores become cleaner
• Stores less crowded
• Stores become convenient
• Customers are HAPPIER!!

14
BUSINESS-LEVEL STRATEGIES

• Encompasses The Businesss Overall Competitive
  Theme And How They Position Themselves In The
  Marketplace
• Cost Leadership
• Cost Structure As A Result of Its Business Model
• Positioned In The Marketplace
• Leader In Quality
• Good Customer Responsiveness
• Convenient
• Atmosphere
• Differentiation
• The Starbucks experience
• Mission, goals and values

15
GLOBAL STRATEGIES

• Global strategy for Starbucks incorporates
  intense research to find good areas to expand to
  
• Partnership First, Country Second
• Store Philosophy
• Restaurant Experience
• Financial Resources
• Real Estate Experience
• People Available To Work
• When Considering a Location
• Look for visible sites, in well trafficked areas
• Categorize using scale A-D
• High Level Analysis
• Works with Local Politics
• Approves Negotiations
• Also Considers negative impacts received by local
  populous and weights this against the sites grade
  and receives work from high level manager

16
CHANGES IN DOMESTIC BUSINESS MODEL

• Multinational and multilingual managers
• Logistics, planning, merchandising, and
  operations
• Expanding in Tokyo blue chip consulting firm
• Adapt food to local taste
• We remain highly respectful of the culture and
  traditions of the countries in which we do
  businessWe recognize that our success is not an
  entitlement and we must continue to earn the
  trust and respect of customers everyday

17
FINDING PARTNERS IN FOREIGN LOCATIONS

• Starbucks looks for firms with
• similar philosophy in terms of values, corporate
  citizenship, and commitment for the business to
  last forever,
• multi-unit restaurant experience,
• financial resources to expand quickly,
• strong real estate experience,
• knowledge of the retail markets, and
• the availability of people to commit to their
  project.

18
PRIMROSE HILL

• 2002 Starbucks made plans to open an A site
  locations store in London
• Primrose Hill Conservation Area Advisory
  Committee
• Gained media attention
• Starbucks decided to withdraw

19
FORBIDDEN CITY BEIJING

• 1999 Starbucks opened in the worlds largest
  imperial palace
• Chinese culture, heritage, and atmosphere
• Starbucks response
• Signs inside
• Very discrete
• Two tables inside, no tables outside
• Despite intense reaction, Starbucks remained
  open.

20
RIO DE JANERIOBRAZIL

• Decision to move quickly
• Copycat chains developed threatening control over
  geographic market
• Ipanema
• A location
• Controversy of store opening
• Rising level of violence
• Relocation of corresponding retailers
• Threat of picketing and petitions

21
STARBUCKS COFFEE INTERNATIONAL

• Quote by Howard Schultz, Chairman and Chief
  Global Strategist
• We have been amazed by the global acceptance and
  visibility of our brand in all our international
  markets