INTRODUCTION
In 1971 the first outlet of Starbucks was opened in Seattle, USA in Pike Place Market. Howard Schultz who was the director of marketing and retail operations started to provide coffee in 1982 to espresso bars and fine restaurants. In the year 1983 when Schultz travelled to Milan, Italy he was impressed with the espresso bars popularity from there he got the idea of opening the similar Starbucks outlet in Milan like in Seattle. The first Café Latte was served by Starbucks in 1984. They offered espresso beverages and brewed coffee in in 1985 from their registered coffee beans. In 1987 they changed their name to Starbucks. The total number of stores till this year was 17 and then in 1989 there were 55 stores.
The company expanded its headquarters in Seattle in 1990 and unveiled their mission statement. Another major milestone was that it became the first private company who offered the program of stock option and first time opened their store at airport at Seattle’s Sea-Tac international Airport. The number of stores till 1991 was 116. In the year 1995 in York, Pa Starbucks opened roasting facility and opened first LEED-certified store in Hillsboro, Oregon. In 1996, in North America the Starbucks started selling coffee drinks as bottled Frappuccino® through the partnership of North American Coffee. In 2000, a licensed agreement was established between Starbucks and Trans fair to sell certified coffee in U.S and Canada. The number of stores reached above 3500 in all over the world. In San Jose, Costa Rica they opened their first farmer support centre in 2004 and in same year company introduced Starbucks Coffee Master Program.
Launched in 2009 the Starbucks Instant. In 2010, they reinvented their business strategy for brand’s extension and expanded their digital offering for customers. They celebrated their 40th anniversary in 2011 by launching annual Global month of service for the first time. Introduced Starbucks® Blonde Roast and launched beverage platform Starbucks Refreshers® in 2012. Starbucks enhanced their iPhone app with feature of shaking for the payment and digital tipping in 2014.With the University of Arizona they also launched Starbucks College Achievement Plan. In the year 2015, they launched their Cold brew iced coffee and Evolution Fresh™ handcrafted smoothies. The total stores till then were 22,519.
How Starbucks developed globally
The aim of Starbucks is to make its brand the most well-known and respectable globally. The planning is to continue the expansion rapidly of its trade and growth of the field operations and pursuing the opportunities to control the brand by introducing the different new products and by developing different medium of distribution. The characteristics which made the Starbucks as a representative of coffeehouse chains are:
Not only the Starbucks serves their customers brewages of high-quality. The coffee-free beverages and selection of food items makes them friendly to snack-seekers and children also. They provide the option of under indulge and overindulge. It is a pretty safe place of any appetite. Small coffee cup with a price of approximate $2.00 and the fancy drink of around $20.00 is imaginable. So to meet the success widely, for the company there is more attraction than only a good coffee. A draw ambiance of Starbucks is another major factor. When a customer enters the coffee shop they know pretty much the inner environment. After entering the heavy glass doors the customers see small letters in green which hang overhead on the exterior of the building. The interior of the Starbucks in Canada is not that different from the one in Singapore. Their colour scheme is rich warm, art in organic-look with the alternate music and baristas in green aprons. The interior of the Starbucks appears as a comfortable environment.
3. Consistently Convenient:
The key to win the customers’ loyalty and taste bud is the Starbucks’ reliability. The baristas are very active and work quickly. They keep moving the long queues. They provide free Wi-Fi connectivity. There are many competitors of Starbucks who serve swiftness in branded coffee. But these competitors are fail to increase their customers like Starbucks or can say that they are regionally-based.
4. Starbucks Differentiation strategy:
The main strategy utilised by Starbucks Corporation is the differentiation strategy. This differentiation strategy can be represented by the full experience provided by their stores, interesting and new coffee related drinks, a dramatic atmosphere, their process of roasting blending coffee techniques, a large variety of products, professionally trained employees and quick services. They have the ability to build their stores at perfect locations. All these add a positive output to their reputation and maximize their share in market.
Cost Leadership Strategy
This strategy can be exemplified by Starbucks supply chain operations and through this they get best rates of transportation whereby they become enable to increase the efficiency and eliminate the redundancy. They have good relationship with the exporters of coffee who eager to become the Starbucks coffee supplier. Whereby the company get good prices and are known as cost leaders.
Starbucks in Canada
On the basis of café-per-person the Canada leads the United States. The news website Quartz analysed the location of Starbucks stores and found that in the land of Tim Hortons this Americano Coffee house is doing so well. For the population of 1 million there are approximately 40 Starbucks stores. According to the Starbucks Canada spokeswoman, “for the Starbucks, Canada is an important market. It’s been three decades when the first store was opened in Canada and this will grow in future”.
Starbucks opened their first store on 1st March, 1987 outside the Seattle at Seabus Skytrain station Vancouver, Canada. According to the company their cafes are not the only place to enjoy coffee in Canada but like US there are different channels like lodging, groceries and restaurants where they can enjoy their coffee. They say that in Canada their partners play vital role in their success. Another reason of familiarity in Canada is that Starbucks supports proudly more than 14000 (full and Part time) careers.
Issues Starbucks confront in different countries
To adapt the conditions and cultures of different countries some issues Starbucks might encounter. Discussing them below:
CULTURE
Every country has its very own culture even if it comes to taste. In some areas of the world coffee is not as popular as in other areas. Even it varies from person to person. Likewise Starbucks also face cultural issues while opening stores in different countries. In Gulf region like in Kuwait, though they love to drink coffee but their taste bud changes very rapidly from the traditional to the new and trendy foods or drinks. Also the customers in Gulf region need more comfy place to enjoy coffee so an environment according to their needs must be available. Cultural conflicts and difficulties occur as according to previous CEO of Starbucks Jim Donald (2005-2008) the peak time in China is 4pm to 6pm instead of morning timings and they have food preference so the company has to adapt to.
Gender ISSUES
Starbucks face this issue mostly in GCC countries like last year news was circulating that Starbucks banned women after the gender separation wall collapsed. As Saudi Arab is a gender Segregation country Starbucks faced critics from everywhere means local people and on social media sites.
SELF-CANNIBALIZATION
creating self-cannibalization USA and in some countries specially the Gulf countries where the coffee lovers are less as compared to other beverages. This high saturation and expansion cause reduction in Starbucks growth target.
Starbucks Coffee and Farmers Equity (C.A.F.E) Practices
For the quality confirmation and verification process of third-party the Starbucks C.A.F.E practices trust SCS Global Services. The SCS give training and also third-party (where the verification of suppliers are done who participate in C.A.F.E practices) are approved by this (SCS Global Services, 2017). Starbucks evaluate the production of coffee through social responsibility, transparency and economic accountability and environmental leadership aspects.
TRANSPARENCY AND ECONOMIC ACCOUNTABILITY
The economic transparency is required for the proof of the payments which are made through the supply chain of the coffee to know that how much price a farmer gets which is made through coffee supply chain.
SOCIAL RESPONSIBILITY
It includes the rights and safety of the workers, prevention of forced and child labour and good living conditions.
ENVIROMENTAL TRANSPARENCY
The third-party verifies help in waste management; protect the quality of water, conservation of energy and water, biodiversity preservation and the minimum use of agrochemical.
The company is investing in projects that enhance the sustainability and the flexibility of their supply chain. They are contributing to agricultural practices which are more environments friendly. They are also trying to promote the advancement in socioeconomics of the coffee farmers. It will be beneficial for the farmers because of the (long-term) supply contracts. They will get assistance from experts on the emerging techniques. It can improve farmer’s practices in environmental management.
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