International Business Case Study: Starbucks

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Starbucks Case Study Starbucks is a massive company that prides itself on delivering the consumer high quality coffee ethically. In recent years, Starbucks has experienced a lucrative amount of growth. In the third quarter of 2016, Starbucks’ store sales increased 4%, net revenues grew 7%, and profitability jumped 9% (Doraisamy 2016). I attribute these astronomical numbers to Starbucks’ initiative to expand its operations nationally as well as internationally while maintaining its signature quality wherever it goes (Trefis 2016). Starbucks’ EPS (earnings per share) has increased 24% to $0.51 per share, and this is due to the company’s high profitability trickling down to their stock holders. This creates great value for Starbucks stock, which …show more content…
The coffee shop continues to emphasize the importance of moving overseas, and this has led to many successes as well as failures. In China, Starbucks has been expanding aggressively. “I wouldn 't be surprised if one day we have more stores in China than we do in the U.S.”, said Schultz. China has more than 2,100 stores, and Shultz has expressed interest to open 500 new locations per year over the next half decade. There seem to be imminent shifts in the Chinese government; however these changes have very little effect on the company’s expansion plan and Shultz continues remains optimistic (Fox 2016). Starbucks staying on the offense and constantly reinvesting in foreign markets is a major reason why it has grown as much as it has. A major reason why the brand has assimilated so well to Chinese culture is because Starbucks adapts to the local environment. An example of this is how the shop blends seamlessly with the very digitally focused society in China. It has opened up a very successful E-store as well as social gifting options given digitally (Trefis 2016). Another prime example of Starbucks’ international success is their recent endeavors in India. With the expanding middle class comes a grand opportunity for Starbucks growth in the country. There is steep competition in the café market in India, however, so the company is exercising its adaptation technique by serving a specialty tea brand: Teavana. …show more content…
Since Schultz’s reinstatement as chief executive the company has gone nowhere but up. Schultz’s ideals focus on the long term, rather than turning a quick profit. This includes investing in employees as well as keeping a good relationship with customers. An example of this is how in February 2008, Starbucks closed 7,100 stores to retrain all of the baristas on how to make the perfect espresso (Groth 2011). Starbucks definitely took a hit that day, losing 6 million in sales. The investment, however, increased the employees investment in the company and gave the customers a better experience, making them more likely to gain brand loyalty. Shultz also replaced outdated registers, which increased efficiency, and brought the company to social media in ways that it never had before. Schultz also retooled the supply chain operations, which made the orders much more consistent. Starbucks now offers many more benefits for employees, such as dental care, increased salaries, and college tuition reimbursement. Schultz also gave the company a new social conscience, and to this day Starbucks strives for bringing the customer high quality, ethical coffee. They accomplish this by being very open about their farming techniques and training many farmers in various areas to become part of the Starbucks family. This helps the

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