Starbucks

INTERNATIONAL MANAGEMENT

STARBUCKS’INTERNATIONAL OPERATIONS

IRINA BANU

LAURA BECHERU

LAURA ARDELEANU

ANDREEA IRIMIA

ALICE SPIRIDON

ANDREEA BARBU

VICENTIA IONICI

DIANA BRAN

GROUP 955

1. Introduction

Starbucks is one of the most well established brands in the world. With a history going back to 1971 and an overwhelming number of stores open worldwide – over 13000 – the company is an example of spectacular expansion and it is no surprise that it has made it in the list of the most profitable 500 companies. Starbucks is both the brand of a product but also that of an experience. The company’s activity is as much about the coffee they sell as it is about its coffee shops, Starbucks set out its mission to serve the best coffee in the world while also considering the importance of the coffee drinking ritual in the manner they design their shops. For this reason the company serves a great variety of coffee based drinks ranging from filter coffee to espresso based hot drinks but it also serves cold drinks, salads, pastries and sandwiches.

Despite its growth and success, however, Starbucks is also facing a number of challenges. The company functions in a highly competitive international market with a great diversity of coffee suppliers especially in countries where coffee drinking is part of the culture.

Using Porter’s Five Forces approach to market analysis it can be observed that from the point of view of competition there are two levels of competition to be considered. First at the level of coffee bean suppliers entry barriers are moderately high, mainly due to the costs of cultivating coffee beans and processing them. At the level of coffee shops entry barriers are quite low, it is relatively easy to set up a coffee shop and supply drinks from a well established brand while focusing on the coffee drinking experience.

From the point of view of substitute products, coffee, although a beverage, is not as threatened by substitutes as other drinks...