Starbucks expansion strategy

Presented By:-Amit Panda Anuj Sehrawat Ankur Kumar Sushant

Overview

Established in 1971 at Seattle , Washington Famous for its quality fresh - roasted coffee beans and stylish atmosphere . Over 17 , 009 stores in more than 55 countries . Product lines include : beverages ( coffee , Tazo tea , soda , juices ) pastries whole coffee beans coffee - related hardware and equipment merchandise ( mug , CDs )

Starbucks Timeline
Howard Schultz joins Starbucks as Dir. of Retail 1982 Schultz founded II Giomale offering brewed coffee & espresso beverages w/ Starbucks coffee beans 198 84 Starbucks locations 676 Starbucks locations & Starbucks Intl formed

9800 stores

1990 1993

1995 2003

2007 2010

1971

1st tests new Starbucks location in coffee bar Seattle concept

198 4 Schultz

1987
II Giomale acquires Starbucks assets Changes name to Starbucks Corp.

272 Acquired Enter South Starbucks Seattles Best Africa before locations Coffee Co. the FIFA world cup. 6,604 Starbucks locations

The Growth of Starbucks

o . of Stores

Years

 Sheraton Hotels (now Starwood Hotels) United Airlines Nordstrom Canadian Bookstore Chapter

Westin Hotels Canadian Airlines Kraft Foods (to extend into grocery stores) Hyatt Hotels Corp.

They grow up so fastbut how?

Rapid Expansion Strategy

CRITERIA

Starbucks chooses international business partners based on the following items : Shared values and corporate culture, strong multi-unit retail/restaurant experience, dedicated human resources, commitment to customer service, quality image, creative ability, local knowledge, brand-building skills, and strong financial resources.

Starbucks Strategy
qRapid store expansion strategy
Domestic store expansion International store expansion Employee Training and Recognition Real Estate, Store Design, Planning, and
Construction Store ambience

Reasons for Entering

Starbucks decided to enter the international marketplace for three primary reasons-

Contd
In 1995, the firm established a subsidiary called Starbucks Coffee International Inc. This group is responsible for all Starbucks business developments outside North America, including developing new businesses, financing and planning stores, managing operations and logistics, merchandising, and training and developing Starbucks' international managers.

STRATEGY OF EXPANSION
Demographics Competition Real estate Consumption

Troubles faced by Starbucks-

Contd
Starbucks international strategy is to utilize two expansion strategies licensing and joint-venture partnerships. Currently, Starbucks exists in a few foreign countries in Asia. In Asia, the most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store

JAPAN
On October 25, 1995, Starbucks Coffee International signed a joint venture agreement with SAZABY Inc. a Japanese retailer and restauranteur, to develop Starbucks retail stores in Japan called Starbucks Coffee Japan, Ltd. Japan is an essential part of Starbucks international expansion plan because the nation is the third largest coffee consuming country in the world, behind the U.S. and Germany having 877 stores by march 2010

SINGAPORE
First Starbucks coffee outlet in Singapore opened on December 14, 1996, in Liat Towers, with the help of BonStar Pte. Ltd., a subsidiary of Bonvests Holding Ltd., a Singaporean company with food services and real estate interests

Thailand-137 South korea-281 Malaysia-121 Hong kong-77

CHINA
The company now sells coffee through around 390 outlets that are mostly concentrated in Beijing and Shanghai. The company has collaborated with different partners for its operations in China

INDONESIA
In 2002, Starbucks launched its first coffee store in Jakarta, Indonesia, after signing a licensing agreement with PT Sari Coffee Indonesia. 72 outlets currently operated.

INDIA
Tata Coffee and Starbucks would soon convert their partnership for sourcing and roasting premium coffee beans in India into a joint venture, in which the Seattle-based retailer would hold a 26% stake. The joint venture would open outlets in all major Indian cities, and Starbucks would raise its stake in the new company to 51% within a year

GLOBAL EXPANSION
September 1995-First Starbucks retail store opened within an existing and newly opened state-of-the-art Star Markets. October 1995-Signed an agreement with SAZABY Inc., a Japanese retailer and restaurateur, to form a joint venture partnership to develop Starbucks retail stores in Japan. The joint venture was called Starbucks Coffee Japan, Ltd. The first store opened in Tokyo in the summer of 1996 and marked Starbucks first retail expansion outside of North America. October 1995-A long-term joint venture with Dreyers Grand Ice Cream was formed to market a premium line of coffee ice creams. Nationwide .

Contd
November 1995-Formed a strategic alliance with United Airlines to become the exclusive coffee supplier on every United flight. January 1996-The North American Coffee Partnership was formed between Pepsi-Cola and Starbucks New Venture Company, a wholly-owned subsidiary of Starbucks. The partnership announced its plan to market a bottled version of Starbucks Frappuccino beverage. February 1996-Formed an agreement with Aramark Corp. to put licensed operations at various locations marked by Aramark. The first licensed location opened in the end of 1996.

1998-2002
Formed a joint venture with Intel Corp. The venture will help push Starbucks into the market of cybercafes. Formed an alliance with eight companies to enable the gift of over 320,000 new books for children through the All Books for Children Holiday Book Buy. Acquired Seattle Coffee Company, UKs leading specialty coffee company. Formed a joint venture with Mack Johnsons Johnson Development Corp. to develop Starbucks locations in underserved, inner-city urban neighborhoods. Formed long-term licensing agreement with Kraft Foods to accelerate growth of the Starbucks brand into the grocery channel across the United States.

Contd..
Starbucks sometimes faces fierce opposition when trying to enter certain markets. In 1999, when Starbucks came to downtown Athens, many locals and college students objected.

 The company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-'90s, and overseas stores now constitute almost one third of Starbucks' stores.