Starbucks Essay

24457 Words Sep 30th, 2013 98 Pages
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GLOBALIZATION
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PART 1 Globalization

PART ONE

Planet Starbucks

T

hirty years ago Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today it is a global roaster and retailer of coffee with more than 7,600 retail stores, some 2,000 of which are to be found in 34 countries outside the United States. Starbucks Corporation set out on its current course in the 1980s when the company’s director of marketing, Howard

Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The basic strategy was to sell the
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To make sure the Japanese operations replicated the North American “Starbucks experience,” Starbucks transferred some employees to the Japanese operation. All Japanese store managers and employees were required to attend training classes similar to those given to U.S. employees. Stores also had to adhere to some basic design parameters established in the United States. In 2001, the company introduced a stock option plan for all Japanese employees, making it the first company in Japan to do so. Skeptics doubted that Starbucks would be able to replicate its North American success overseas, but by early 2004 Starbucks had more than 500 stores in Japan, and the Japanese unit was predicted to make a healthy profit for the year. After getting its feet wet in Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An American couple, originally from Seattle, had started Seattle Coffee with the intention of establishing a Starbucks-like chain in Britain. Also in the late 1990s, Starbucks opened stores throughout Asia including Taiwan, China, Singapore, Thailand, South Korea, and Malaysia. By the end of 2002, with more than 1,200 stores in 27 countries outside of North America, Starbucks initiated aggressive expansion plans in continental Europe. The company’s target was to open some 650 stores in six European countries, including the coffee cultures of

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