Starbucks

Running Head: STARBUCKS’ INTERNATIONAL OPERATIONS

Starbucks’ International Operations

Introduction

Starbucks is one of the most successful and admired companies today. It has grown from a single coffee shop in Seattle 33 years ago to a $4.1 billion international company (Isidro, I., 2004). Starbucks originally opened as a coffee bean retailer by Jerry Baldwin, Zev Siegel, and Gordon Bowker (Deresky, 2008, pg. 302). The current CEO, Howard Schultz joined Starbucks in 1982 as a marketing manager; but the small Seattle coffee bean retailer could not handle his big visions for the company. Schultz quit the company in 1985, but in 1987, seized on an opportunity to buy the company and its brand name for $3.8 million.

Schultz quickly put his company's expansion strategies into place.

By 1995, Starbucks had already reached U.S. market saturation; and Schultz realized he had to take his company global to maintain growth rates and boost revenues. Starbucks created a new subsidiary, Starbucks Coffee International (SCI), to orchestrate overseas expansion and begin to build the Starbucks brand name globally via licensees (The McGraw-Hill Companies, 1999).

Starbucks focused on the Asia Pacific Rim markets first because of "growing consumerism [in this region] and the eagerness among the younger generation to imitate western lifestyles" (Deresky, 2008, pg. 303). Going into 1998, SCI had 12 retail stores in Tokyo, 7 in Hawaii, 6 in Singapore, and 1 in the Philippines. Starbucks entered China in 1999 with its first store in Beijing. Moving forward, Starbucks will need to develop a strategy for navigating political risks, monitor and control its growth pace, and venture into new products that appeal to different cultures and different market segments.

Case Summary

"In the early 2000's, Starbucks faced many problems in its international operations" (Deresky, 208, pg. 306). These problems included the volatile...