1. GLOBAL MANAGEMENT - CASE STUDY
Starbucks International Operations
a presentation
1

2. GLOBAL MANAGEMENT - CASE STUDY
Starbucks International Operations
a presentation
1

3. First store opened in Seatle in
1971
165 Outlet in 1992 when
company issued its initial
shares of public stocks
generates $4 billion per year in
revenue
Serves more than 33 million
customer each week
Partners with Albertson’s,
Barnes & Nobles, Hyatt, Kraft,
Marriot, Pepsi, United Airlines
STARBUCKS
facts
and figures
2

4. First store opened in Seatle in
1971
For Year 2002...... 13101992 initial
165 Outlet in
company issued its
when
Stores in more than public stocks
shares of 30
countries around the billion per year in
generates $4
revenue
world
Serves more than 33 million
customer each week
Partners with Albertson’s,
Barnes & Nobles, Hyatt, Kraft,
Marriot, Pepsi, United Airlines
STARBUCKS
facts
and figures
2

5. 1,500
Country Store
1,310
First store opened in Seatle in
Japan 397
1971
Taiwan 99 1,125 165 Outlet in 1992 when
China 88 company issued its initial
929
South Korea 53 shares of public stocks
750 generates $4 billion per year in
Arab Emirat 23
revenue
Lebanon 11 524
Serves more than 33 million
Spain 5 customer each week
375
Indonesia 5
Partners with Albertson’s,
278
Barnes & Nobles, Hyatt, Kraft,
128
New Zealand 34 Marriot, Pepsi, United Airlines
5 17
Hawai 30 0
1995 1996 1997 1998 1999 2000 2001 2002
STARBUCKS
facts
and figures
2

6. Provide a great work environment and
treat each other with respect and
dignity
Embrace diversity as an essential
component in the way we do
business
Apply the highest standard of excellence
to the purchasing, roasting, and fresh
delivery of our coffee
Develop enthusiastically satisfied
customers all of the time
Contribute that profitability is essential
to our future success
STARBUCKS
business
philosophy
3

7. Customer Service
Excellence
Product Quality
Accessibility
Emerging Corporate
Responsibility
Financial Resources
Brand Recognition
STARBUCKS
success
factor
3

8. A new Starbucks open in restroom
of existing Starbucks.......!!!
Headline in The Onion, a Satirical Publication
STARBUCKS
business
model
3

9. Cluster Strategy
Disadvantage : the new
stores will often canibalize
one another’s business and
capture about 30 % of the
sales of a nearby starbucks
Advantage : cut down on
delivery and management ,
shortens customer lines,
increases foot traffic in an
area, brand awareness.
STARBUCKS
business
model
3

10. STARBUCKS
business
model
3

11. STARBUCKS
business
model
3

12. STARBUCKS
business
model
3

13. STARBUCKS
expansion
strategy
4

14. Advantage
• low development cost and risk.
• fast market access
• Avoids regulations and tariffs
LICENSING
Disadvantage
• Lack of control over the licence ‘s
activities and performance
STARBUCKS
expansion
strategy
4

15. Advantage
• insider access to
market
• share cost and risk
• leverage partner’s
skill base
technology
• local contact
Disadvantage
• Lack of controll
over technology
• Inability to engage
in global strategic
coordination
JOINT
• Inability to realize
location and
VENTURE
experience
economic
STARBUCKS
expansion
strategy
4

16. Advantage
WHOLLY • Protection of
technology and skill
OWNED base
Disadvantage
• High cost and risk
SUBSIDIARIES • Full authority of
revenue and controll
STARBUCKS
expansion
strategy
4

17. Country Partner Agreement Ownership Stores 2002 Stores 2003
Australia Majority Own 90% 29 60
Japan Sazaby Inc JV-public 40% 357 570
China (Beijing) Mei Da Coffee Licence 26 45
China (Shanghai) President Coffee JV 5% 25 45
Germany KarstadtQuelle JV 19,5% 0 21
Thailand Majority Owned 97% 26 37
Middle East M.H.Alshaya Co Licence 65 98
Indonesia PT.Mitra A Licence Advantage 0 5
WHOLLY Grup Vids
Spain JV
• Protection of
technology and skill 2
18% 13
OWNED President Coffee
Taiwan JV base5% 91
Disadvantage
137
• High cost and risk
SUBSIDIARIES
United Kingdom wholly owned • Full authority of 297
100%
revenue and controll
470
Source : Merryl Lynch
STARBUCKS
international ops
and partnership
4

18. Country Partner Agreement Ownership Stores 2002 Stores 2003
Australia Majority Own 90% 29 60
Japan Sazaby Inc JV-public 40% 357 570
China (Beijing) Mei Da Coffee Licence 26 45
China (Shanghai) President Coffee JV 5% 25 45
Germany KarstadtQuelle JV 19,5% 0 21
Thailand Majority Owned 97% 26 37
Middle East M.H.Alshaya Co Licence 65 98
Indonesia PT.Mitra A Licence Advantage 0 5
WHOLLY Grup Vids
Spain JV
• Protection of
technology and skill 2
18% 13
OWNED President Coffee
Taiwan JV base5% 91
Disadvantage
137
• High cost and risk
SUBSIDIARIES
United Kingdom wholly owned • Full authority of 297
100%
revenue and controll
470
Source : Merryl Lynch
STARBUCKS
international ops
and partnership
4

19. Country Partner Agreement Ownership Stores 2002 Stores 2003
Australia Majority Own 90% 29 60
Japan Sazaby Inc JV-public 40% 357 570
China (Beijing) Mei Da Coffee Licence 26 45
China (Shanghai) President Coffee JV 5% 25 45
Germany KarstadtQuelle JV 19,5% 0 21
Thailand Majority Owned 97% 26 37
Middle East M.H.Alshaya Co Licence 65 98
Indonesia PT.Mitra A Licence Advantage 0 5
WHOLLY Grup Vids
Spain JV
• Protection of
technology and skill 2
18% 13
OWNED President Coffee
Taiwan JV base5% 91
Disadvantage
137
• High cost and risk
SUBSIDIARIES
United Kingdom wholly owned • Full authority of 297
100%
revenue and controll
470
Source : Merryl Lynch
STARBUCKS
international ops
and partnership
4

20. Partner first,
Country second
Fundamental qualification
is expected of its
potential partner
Criterien included
financial solvency,
knowledge of local market
condition, prior retail
experience, and creative
ability
13 weeks training in
Seattle
CRITICAL FACTOR
Partner Selection

21. Partner first,
Country second
Site Attractiveness
Fundamental qualification
is expected of its
potential partner
Teritorial Intelligence
Criterien included
Actual Environment
financial solvency,
knowledge of local market
Factor
condition, prior retail
experience, and creative
Regional and
ability
Community
13 weeks training in
Acceptance
Seattle
CRITICAL FACTOR
Environment Assesment

22. Competitive Environment first,
Partner
• Local Competition
Country second
• Copycat Site Attractiveness
• Untapped MarketFundamental qualification
is expected of its
potential partner
Teritorial Intelligence
Negative perception of an
American representative inincluded
Criterien
overseas Actual Environment
financial solvency,
knowledge of local market
Factor
condition, prior retail
Local Culture barrier
experience, and creative
Regional and
ability
Community
13 weeks training in
Acceptance
Seattle
CRITICAL FACTOR
Challenge of Global Expansion

23. Competitive Environment first,
Partner
• Local Competition
Country second
• Copycat Site Attractiveness
• Untapped MarketFundamental qualification
is expected of its
potential partner
Teritorial Intelligence
Negative perception of an
American representative inincluded
Criterien
overseas Actual Environment
financial solvency,
knowledge of local market
Factor
condition, prior retail
Local Culture barrier
experience, and creative
Regional and
ability
Community
13 weeks training in
Acceptance
Seattle
CRITICAL FACTOR
Challenge of Global Expansion

24. Competitive Environment first,
Partner
• Local Competition
Country second
• Copycat Site Attractiveness
• Untapped MarketFundamental qualification
is expected of its
potential partner
Teritorial Intelligence
Negative perception of an
American representative inincluded
Criterien
overseas Actual Environment
financial solvency,
knowledge of local market
Factor
condition, prior retail
Local Culture barrier
experience, and creative
Regional and
ability
Community
13 weeks training in
Acceptance
Seattle
CRITICAL FACTOR
Challenge of Global Expansion

25. CASE STUDIES
Starbucks
goes to China

26. CASE STUDIES
Starbucks
goes to China
CONTRA
Coffee is not the main mainstream
beverage in China
Rigid business policies

27. CASE STUDIES
Starbucks
goes to China
CONTRA
Coffee is not the main mainstream
beverage in China
Rigid business policies
PRO
The fastest growing and the most
powerfull marketplace in the world
First mover advantage

28. CASE STUDIES
Starbucks
goes to China
TARGET CONSUMER
Young and affluent
Status conscious
Business executives
People who were educated abroad
Expatriates
PARTNERSHIP
Mei Da Coffee (Licencing)
President Coffee (Joint Venture)

29. Entry Phase
Conducting research to the
Chinesse environment
Testing its Coffee for free in
major restaurants and hotels
in Beijing
First store was opened in
1999.
Country Development
Building brand awareness
Stores opening in China’s
major City
GLobal Integration
Deepening commitment to
the China Market by
increasing its stakes in
Taiwan and Shanghai
ENTRY STRATEGY
Expansion Phase

30. Entry Phase
Conducting research to the
considered as social event than Chinesse environment
daily necessity. Testing its Coffee for free in
major restaurants and hotels
They can sit for hours in Beijing
First store was opened in
1999.
mostly cannot drink coffee Country Development
alone, it must go with the food Building brand awareness
Stores opening in China’s
Starbucks does most of its major City
business during afternoon and GLobal Integration
night time Deepening commitment to
the China Market by
increasing its stakes in
Taiwan and Shanghai
ENTRY STRATEGY
Chinese’s Coffee Drinking Behaviour

31. Entry Phase them self as “third
Promoting
living space”research home
Conducting beside to the
considered as social event than and office environment
Chinesse
daily necessity. Testing its Coffee for free in
Increase the size of the store
major restaurants and hotels
around 2000 square feet
in Beijing
They can sit for hours
First store was opened in
Providing foot including
1999.
mostly cannot drink coffee Country Development cookies
traditional chinesse
alone, it must go with the food Building brand awareness
Stores opening in China’s
Starbucks does most of its major City
business during afternoon and GLobal Integration
night time Deepening commitment to
the China Market by
increasing its stakes in
Taiwan and Shanghai
ENTRY STRATEGY
Implementing “Starbucks Experience” in China

32. QUESTION....?