Seattle-based Starbucks is the world's largest seller of premium-brewed coffee with over 8,400 stores, including 2,000 stores spread in 31 foreign countries. Starbucks used an international strategic approach to achieve its high level of international development across the globe. Starbucks built an outstanding competence in the management of retail outlets, selling high volumes of premium coffee-based drinks. The company is expanding outside the U.S. by replicating its business model in order to reach a global market. In this study we will explain how Starbucks built this core competence, and how it applied its model abroad in order to meet a global expansion.
[...] What is more, Starbucks has formed a partnership with Conservation International in order to meet environmental and sustainable development standard in the coffee production. This partnership has promoted biodiversity, biology- friendly agriculture methods, and also the use of fewer fertilizers (Juniper and Moore, 2002) - Extension of the brand and the products According to Hamel and Prahalad (1990), it is not the size for the firm's resource base that is the primary determinant for capability, but the ability to leverage its resources. [...]
[...] (2007) Speedy Starbucks has grown too fast Marketing : London. [...]
[...] What encompasses the “Starbucks experience” is the retail environment, the values of the company projects, and a sense of community that customers feel a part of. To sustain this uniqueness, Starbucks developed payment cards (making it able to create a one-to-one relationship with the customer) (Theodore, 2002), the Starbucks Express (online ordering system), and also internet access in stores. All these services are increasing the value of Starbucks' business model. As a consequence, the differentiation stance is not only visible in the products, but rather in all aspects of the company. [...]
[...] Having high prices, the company can have access to high quality, costly inputs. This partnership with local, small coffee farmers can be interpreted as a vertical foreign direct investment: an investment that provides inputs for a firm's domestic production processes (Hill: 252). The strategic behavior of Starbucks can thus be analyzed as an attempt to cope with the market imperfections. Firstly with the impediments to the Sale of Know-How. Starbucks has a precise knowledge in coffee agriculture, especially concerning sustainable agriculture. [...]
[...] Starbucks is already enacting this model. The foreign entry strategy In 1995, Starbucks thought about its first foreign opporunity in Japan. At first, what the company wanted to do was to license its format in Japan (Hill: 259). But the company realized that with this entry strategy, it will not be able to replicate its successful “Thirdplace” model through a pure licensing formula. Indeed, we know that even if licensing presents a lot of advantages, such as low developments costs and risks to enter a foreign market, it also has serious drawbacks. [...]
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