Tag: Starbucks

Starbucks!

Starbucks uses the highest quality arabica coffee as the base for its espresso drinks. Learn about our unique coffees and espresso drinks today. Starbucks Corporation is an American coffee company and coffeehouse chain. The company was found in Seattle, Washington in 1971. As of 2017, the company operates 27,339 locations worldwide.

Also learn, Starbuck’s first became profitable in Seattle in the early 1980s. Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s. The first Starbuck’s location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one-third of its stores. The company opened an average of two new locations daily between 1987 and 2007.

Starbucks - ilearnlot

  • Case Study: The Impact of the 2008 Financial Crisis on Starbucks

    Case Study: The Impact of the 2008 Financial Crisis on Starbucks

    The 2008 financial crisis on Starbucks was a pivotal moment for many businesses, including them. This blog post explores how Starbucks navigated the economic downturn, implemented innovative strategies, and adapted to changing consumer preferences. Lessons learned from this period highlight the importance of resilience, cost management, and corporate values. Discover how Starbucks turned challenges into opportunities for growth during one of the most significant economic disturbances in modern history.

    The Brewing Storm: The 2008 Financial Crisis on Starbucks

    The 2008 financial crisis represents one of the most significant economic downturns in modern history, precipitated by a cascade of events that began in the United States and quickly spread globally. At the heart of the crisis were the housing market bubble and the subsequent collapse of mortgage-backed securities, which significantly weakened the banking sector. Financial institutions, burdened with unsustainable debts, faced mounting pressures, leading to failures among prestigious firms such as Lehman Brothers in September 2008.

    As the crisis unfolded, the repercussions on various sectors became evident. The retail and food services industries, in particular, faced immense challenges as consumer spending plummeted. According to the U.S. Bureau of Economic Analysis, personal consumption expenditures fell sharply during the latter half of 2008, impacting businesses reliant on discretionary spending, including cafes and restaurants. Many retailers were forced to adapt by reducing their workforce, closing stores, or filing for bankruptcy, illustrating just how reliant they were on a robust economy.

    The coffee industry was not immune to these stresses. Starbucks, a prominent player in this sector, encountered significant challenges as consumer confidence waned. Reports indicated a notable drop in foot traffic and overall sales, with revenues seeing declines across many locations. The company faced the dual pressure of rising commodity prices and changing consumer preferences, complicating its attempts to maintain profitability. Nevertheless, the crisis presented a unique opportunity for innovation and strategic pivots, setting the stage for an analysis of Starbucks’ distinctive approach to resilience amidst adversity.

    Starbucks’ Initial Response to the Crisis

    As the 2008 financial crisis began to unfold, Starbucks faced significant challenges that prompted immediate and strategic action from its leadership. The prominence of the economic downturn required a reevaluation of its operations to maintain stability. Howard Schultz, the then-CEO, returned to the company in January 2008 with a renewed vision focused on revitalizing the brand while adapting to the changing economic landscape.

    One of the primary measures taken was the implementation of cost-cutting strategies. Starbucks initiated a comprehensive review of its existing operations, identifying areas where expenses could reduced without compromising on quality. This included reducing the number of store openings—a decision that reflected a more cautious approach amidst uncertainty. Schultz emphasized the need to “take the time to refine and reinvent our model,” indicating a shift in management philosophy that prioritized resilience and sustainability over rapid expansion.

    Further streamlining efforts were evident in the company’s decision to enhance employee training and improve service quality. By implementing rigorous operational evaluations, Starbucks aimed to ensure that its customer experience remained a cornerstone of its brand identity, even in tough financial times. The leadership believed that maintaining high standards would foster customer loyalty, which was crucial for navigating the crisis effectively.

    Moreover, Starbucks began to pivot its product offerings to align better with customers’ changing preferences and economic realities. This included introducing more value-oriented menu items and optimizing supply chain logistics to reduce costs while keeping prices competitive. Schultz’s approach highlighted a commitment to innovation, capturing the sentiment that “the most important moments of change are often disguised as the most challenging.” Such insights drove governance decisions, illustrating a proactive mindset in a time of uncertainty.

    Innovative Strategies: Adapting and Thriving

    During the 2008 financial crisis, Starbucks faced significant challenges as consumers became increasingly budget-conscious. In response, the company employed innovative strategies that not only ensured its survival but also positioned it for future growth. One of the most notable approaches was the introduction of new product offerings tailored to meet the changing demands of its clientele. For instance, Starbucks expanded its beverage lineup to include more affordable options, such as its line of value-priced espresso drinks, which attracted cost-sensitive customers without compromising quality.

    Additionally, marketing initiatives during this period were carefully crafted to emphasize value while maintaining the premium brand image Starbucks is known for. By implementing promotional campaigns that offered discounts and special offers, the company encouraged regular patronage among shoppers looking to make the most out of their budget. These initiatives were further complemented by targeted social media efforts, engaging customers through platforms like Facebook and Twitter, where Starbucks effectively communicated its brand message and responded to consumer feedback in real time.

    Another critical aspect of Starbucks’ success during this era was the integration of technology into customer engagement tactics. The launch of the Starbucks mobile app marked a significant milestone, allowing customers to order ahead, pay in advance, and earn rewards through their purchases. This digital innovation not only streamlined the customer experience but also fostered loyalty among consumers who appreciated the convenience it afforded. Furthermore, Starbucks utilized data analytics to understand consumer behavior better, enabling the company to personalize marketing messages and recommendations.

    In implementing these innovative strategies, Starbucks demonstrated adaptability and foresight, turning potential setbacks into opportunities for reinvention. By focusing on new product offerings, strategic marketing, and leveraging technology, Starbucks successfully navigated the turbulent waters of the financial crisis and emerged stronger than before.

    Lessons Learned: Resilience and Future Outlook

    Starbucks’ experience during the 2008 financial crisis serves as a valuable case study in corporate resilience and adaptability. The company’s strategic responses to the economic downturn highlighted several key lessons that not only helped them navigate a turbulent financial landscape but also laid the groundwork for their ongoing success. One of the most significant lessons learned was the importance of a robust financial strategy. By focusing on cost management, liquidity, and efficient operations, Starbucks was able to weather the storm and emerge as a stronger entity. This reinforced the necessity for companies to evaluate their financial health regularly and prepare for unforeseen challenges.

    Additionally, the crisis underscored the need for innovation. Starbucks invested in enhancing its customer experience, which involved not only improving product offerings but also streamlining operations. This commitment to innovation has continued to play a pivotal role in the company’s strategy, as they frequently analyze market trends and customer preferences to inform their decisions. This adaptability has allowed Starbucks to stay competitive in an increasingly dynamic market.

    Furthermore, a focus on corporate values emerged as a guiding principle during the crisis, as Starbucks leaned into its commitment to social responsibility and sustainability. By emphasizing ethical sourcing and community engagement, the company strengthened its brand loyalty. This approach not only reinforced customer relationships but also attracted new clientele who resonate with the company’s mission. Today, Starbucks continues to uphold these principles, ensuring they remain integral to their business practices.

    In conclusion, the lessons learned from the 2008 financial crisis have significantly shaped Starbucks’ long-term resilience and adaptability. The company has cultivated a forward-thinking mindset, continually refining its strategies to mitigate risks and navigate future market challenges. By maintaining a focus on financial health, innovation, and corporate values, Starbucks is well-positioned for sustained growth in an ever-evolving industry.

  • Case Study of the Starbucks Mobile Payment Application App

    Case Study of the Starbucks Mobile Payment Application App

    Starbucks Mobile Payment Application App Case Study; Starbuck’s innovative value proposition includes a wide variety of mostly coffee-based menus along with other types of drinks that catered to a wide range of audiences; who are willing to pay top buck for the luxurious and relaxed interiors that are the perfect environment for socializing with friends and relax. Starbucks successfully created an aspirational brand that created highly loyal; and, delighted customers who repeatedly come to Starbucks for the unique experience it is offering. Do you study to learn: If Yes? Then read the lot. Let’s Study: The Case Study of the Starbucks Mobile Payment Application App.

    How to achieve the SUCCESS of the Starbucks Mobile Payment Application App? So read the case, The Case Study of the Starbucks Mobile Payment Application.

    Starbucks redefined the highly competitive coffee shop business and successfully created an uncontested market by turning the simple coffee drinking experience into a way of life experienced by drastically redefining the coffee shop environment by adding music, Wi-Fi, relaxed seating, and luxurious interiors. Till Starbucks disrupted the traditional coffee shop market most of the focus was on the price, location, and quality of coffee shops. Another important aspect that Starbucks focused on was the quality of customer service with an exclusive aim of maximum customer delight and they meticulously recruited; and, trained the best talent in the industry that has added huge value to their brand reputation.

    Starbucks customers loaded more than $1.2 billion on its Starbucks app – that’s more money than some banks! The Starbucks app has strategically outcompeted mobile payment offerings from tech giants such as Apple and Google so far. The reason behind the app’s success is simple: Starbucks combined their gift card; and, loyalty programs into an app optimized for mobile payment. Instead of trying to keep payment exclusive to a particular phone or operating system or brand. The Starbucks mobile app is widely available on both iOS and Android, a Case Study. Automatically this opens up the potential market share and user base to everyone with a smartphone.

    History:

    The Starbucks coffee shop for the year has been successfully maintaining its dominant position in the market; although the market is becoming highly competitive with many players offering to offer similar products and services similar to Starbucks. Strong competition has also increased with fast-food chains such as McDonald’s and Dunkin Donuts; which now offer premium coffee, threatening the market share of established players. To capture its competitive advantage and to create a new value proposition for its customers; Starbucks has started focusing on information technology, mobility, and the use of social media in particular. What is the Growth Strategy for Case Study Starbucks?

    App services:

    Such an innovative price proposal by Starbucks is a mobile payment application. Starbucks launched its mobile card app in 16 stores at the beginning of 2009; and, after the adoption of the customer, Starbucks expanded it across the nation in the United States. The main feature of the app allows customers to scan 2D barcodes on their mobile device; and, use them as a store payment. The app is expanding Starbucks’s existing, tangible, prepaid reward cards for loyal customers.

    The app market bases on its benefits in saving time and facilitating shopping for customers. Starbucks refers to the app as “the fastest way to pay”. With this app, customers can check their balance; reload the card with any major credit card or PayPal; see the transaction, and easily track your stars in the MSR (My Starbucks awards) Can, program. The advantages are speed for consumers and there is a low card in their pocket. Customers using the app can also find a mobile payment Starbucks near their location.

    Payment Services:

    The Starbucks mobile payment system is extremely successful base on the fact that in the US; the US $ 1.5 billion average weekly transactions that are responsible for a full 15% of the transaction make in US Starbucks-powered stores; many digital wallets Service providers are struggling according to BI Intelligence. The innovative mobile app has digital tipping options; the dashboard is showing current reward or loyalty points level; available points with current transactions, weeks of coffee selection, recent transactions, and messages.

    Social Media:

    The Starbucks mobile payment application can also integrate with social media sites like Facebook, Twitter, where customers can proudly show their reward level milestones with their friends and family. Important Case Study in Corporate Social Responsibility of Coffee Starbucks. This will further enhance their brand reputation and brand loyalty. By shaking the phone, customers can select the barcode of coffee; which they want to buy and want to pay accordingly. The app model on the social media site interface where customers can see the regular purchase of Starbucks coffee and reward-style history and award points in the timeline.

    By developing mobile marketing programs it seems to present a further opportunity for Starbucks to fortify the targeted long-term relationships with its customers. Customers allow Starbucks to gain access to their mobile phones in exchange for improved experience and convenience. Thus, perceived benefits have to exceed perceived risks such as the safety of personal data; as well as, the security of financial transactions via mobile phones.

    Markets:

    Starbucks’ disruptive mobile strategy integrated its highly successful loyalty program called My Starbucks Rewards with payments by customers. Starbucks further incentivizes the customers who habitually buy and pay through the mobile app and more reward points are the award that is redeeming for free drinks and food. The app’s success is not due to the ease of payment with a phone compare to cash or debit or credit card but the fact the customer can see the incentives and rewards he is going to get that will further increase his loyalty with Starbucks. In a way, Starbucks is locking the customer for the near future. Starbucks loyalty program was diligently crafted over the years and it has been the best in the coffee shop industry or any other industry. Also, learn about – Market Research Coffee of “Starbucks” Entry into China.

    With more than 12 million active users in the United States and Canada, Starbucks has added one more new feature where customers can preorder their coffee using the mobile app and pick up the coffee later. “A prime example of this is our forthcoming mobile order and pay initiative that will allow customers to use their phones and MSR (My Starbucks Rewards) accounts to order ahead of arriving at a store where we plan to pilot in a major U.S. market later this year,” said Howard Schultz, Starbucks CEO.

    Customer Need:

    Customers wanted this functionality of preorder through mobile for the past few years, particularly since the mobile-based cab hailing service Uber huge success. The Coffee company is able to offer this service right now as the company feels its technology and in-store operations are well equipping to handle such requests. Also, expanding the number of drive-through express service outlets that are the best suite for the preorder system. Starbucks is also, talking to partners and other businesses like retail outlets that will also allow the customers to use their mobile application payment system, rewards system, and loyalty programs in non-Starbucks outlets.

    Through its mobile payment system Starbucks eliminated the need to carry cash, coin change issues, tipping problems, reduced the time spent on ordering and making coffee, understanding the menu and coffee types, offers and rewards available, raised the customer delight, loyalty and rewards, number of visits, new customers and created a new revenue source for the company, helped in acquiring new customers and also created a uncontested space in the digital wallet market.

    The Case Study of the Starbucks Mobile Payment Application
    Case Study of the Starbucks Mobile Payment Application App.
  • What is the Growth Strategy for Case Study Starbucks?

    What is the Growth Strategy for Case Study Starbucks?

    Case Study Starbucks Growth Strategy; Today, Starbucks coffee shops and Kiosks can found in a variety of shopping centers, office buildings, bookstores, and other outlets. Starbucks is capitalizing on taste changes that predate the company’s founding. In the early 1960s, American adults consumed an average of three cups of coffee each day. Today, consumption has declined to less than two cups, with only half of American adults as coffee drinkers. Also learn, Starbucks’ Entry to China, What is the Growth Strategy for Case Study Starbucks?

    Studies, Learn, The Growth Strategy for Case Study Starbucks!

    During this time, decaffeinated coffee sales soared. In addition, a new category of intensely loyal coffee drinkers was born. This group of adults consumes “specialty” or “premium” coffees, including regular and decaffeinated versions with a variety of origins and flavors. Sales of specialty coffee have climbed from about $45 million annually to more than $2 billion today, accounting, for about 20 percent of all coffee sales.

    Because Starbucks markets whole beans and coffee beverages, its competition comes from two distinct groups of firms. A number of regional coffee manufacturers distribute premium coffees in local markets, while several large national coffee manufacturers such as Nestle, Proctor & Gamble, and Kraft General Foods market and distribution specialty coffees in supermarkets. Coffee beverages are distributing by restaurants, grocery stores, and coffee retailers. Seattle’s Best Coffee is a fierce competitor.

    The case of History!

    In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel, and writer Gordon Bowker opened Starbucks Coffee. Tea and Spice in Touristy Pikes Place Market in Seattle. The three were inspired by entrepreneur Alfred Peet (whom they knew personally) to sell high-quality coffee beans and equipment. The store did not offer freshly brewed coffee by the cup, but tasting samples were sometimes available.

    Siegel will wear a grocers apron, scooped out beans for customers. While the other two kept their day jobs but came by at lunch or after work to help out. The store was an immediate success, with sales exceeding expectations, partly because of interest stirred by the favorable article in Seattle Times.

    Other things:

    Starbucks ordered its coffee-bean from Alfred Peet but later on, the three partners bought their own used roaster setting up roasting operations in a nearby ramshackle building and developed their own blends and flavors. By the year 1980s, the company had four Starbucks Stores in the Seattle area and had been profitable every year. Later on, Siegel left the company and Jerry Baldwin took over day-to-day management of the company. Gordon Bowker remained as an owner but devoted most of his time in his Design Firm.

    In 1981, Howard Schultz, the vice president of U.S operations for Swedish Maker of stylish kitchen equipment and coffeemakers decided to pay Starbucks a visit. He was curious about why Starbucks was selling so many of his company products. He was impressing with the company management and the quality products they make. Schultz asked Baldwin whether there was any way he could fit into Starbucks and it took a long time to decide his request. He tries many times until one day he was given a job of heading marketing and overseeing the retail stores.

    The case of Challenges:

    • What are some of the challenges associated with Starbucks aggressive growth strategy?
    • Could an unanticipated change in coffee consumption patterns disrupt Starbucks in the same way that it paved the way for the company’s growth in the 1980s?
    • What problems might arise from Starbucks’ efforts to expand rapidly into nations such as India?
    • Comment on the pricing strategies of Starbucks.
    • How would you see the competition of Starbucks in India, with players like Costa Coffee, Mc Donalds, Barista and Café Coffee Day? Draw out a competitive strategy for Starbucks.

    Here are Some More Knowledge these Case for better Understand.

    Howard Schultz spent most of his working hours in the four stores learning the retail aspects of the company business; Schultz was overflowing with ideas for the company. His biggest inspiration and vision for Starbucks future came during 1983 when the company sent him for an international housewares show to Milan, Italy. There he spotted an espresso bar and went to take a coffee.

    H. Schultz was impressed with the coffeehouse services and decided to stay at Milan for a week to explore. All coffee bars and learned as much as he could about the Italian passion for coffee drinks. He made a decision to serve fresh brewed coffee, espressos, and cappuccinos in its stores and try to create an American version of Italian coffee bar culture.

    Schultz shared his idea with Baldwin and it took nearly a year to convince Jerry Baldwin to let him test an espresso bar. In April 1984, the first espresso bar was opened and it was a success too. Yet Baldwin felt something is wrong. After Schultz failed to convince Baldwin for the expansion of business, he left Starbucks in 1985. Schultz started the “Il Giornale” coffee bar chain in 1985 and the coffeehouse was very successful.

    In 1987 Starbucks owner Jerry Baldwin and Bowker decide to sell the whole Starbucks chain to Schultz’s Il Giornale. Which rebranded the Il Giornale outlets as Starbucks and quickly began to expand. Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.

    The growth of Coffee Stores!

    In 2009 The Company plans to open a net of 900 new stores outside of the United States. Chairman Howard Schultz projects that the Starbucks mobile app will grow from its present 6,000 stores to more than 20,000, 75 percent of which are in the United States. Also, The company added 280 intentional locations in 2001 and is targeting. With an additional 650 stores in Europe by 2004 and 900 locations in Latin America predominantly Mexico by 2005, Starbucks is also moving into China.

    Retail stores account for more than 80 percent of revenues, with specialty operations accounting for the remainder. Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. As of 2017, the company operates 27,339 locations worldwide. Also, Starbucks first became profitable in Seattle in the early 1980s. Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s.

    Location:

    The first Starbucks location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one-third of its stores. Also, The company opened an average of two new locations daily between 1987 and 2007. Starbucks considers the main representative of “second wave coffee”, initially distinguishing itself from other coffee-serving venues in the US by taste, quality, and customer experience while popularizing darkly roasted coffee.

    Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons. On December 1, 2016, Howard Schultz announced he would resign as CEO effective April 2017 and would replace by Kevin Johnson. Johnson assumed the role of CEO on April 3, 2017.

    What is the Growth Strategy for Case Study Starbucks
    What is the Growth Strategy for Case Study Starbucks?

    Reference:

    1. Case Study – //www.mbaknol.com/management-case-studies/case-study-starbucks-growth-strategy/
    2. About Starbucks – //en.wikipedia.org/wiki/Starbucks
    3. Photo Credit URL – //cdn.someecards.com/posts/guy-uses-drone-to-pick-up-starbucks-order-0rb.png

  • Case Study Corporate Social Responsibility of Coffee Starbucks

    Case Study Corporate Social Responsibility of Coffee Starbucks

    Starbucks Case Study; It is the world’s largest and most popular coffee company. Case Study; Since the beginning, this premier café has aimed to deliver the world’s finest fresh-roasted coffee. Corporate Social Responsibility of Starbucks Coffee, Case Study; Today the company dominates the industry and has created a brand that is tantamount to loyalty, integrity, and proven longevity. Starbucks is not just a name, but a culture.

    Case Study in Corporate Social Responsibility of Coffee Starbucks!

    It is obvious that Starbucks and its CEO Howard Shultz are aware of the importance of corporate social responsibility. We try to explain the case study of Corporate Social Responsibility of Starbucks Coffee; Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone.

    Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they affect their public persona. The corporate social responsibility of the Starbucks Corporation addresses the following issues: Starbucks’ commitment to the environment, Starbucks’ commitment to the employees, Starbucks’ commitment to consumers, discussions of ethical and unethical business behavior, and Starbucks ‘ commitment and response to shareholders. The following Corporate Social Responsibility of Starbucks Coffee few explain below are;

    Commitment to the Environment.

    The first way Starbucks has shown corporate social responsibility is through its commitment to the environment. To improve the environment, with a little push from the NGO, Starbucks’ first main goal was to provide more Fair Trade Coffee. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee. Not only does responsibly grown coffee help the environment, but it also benefits the farmers as well. Responsibly grown coffee means preserving energy and water at the farms.

    In turn, this costs more for the company overall, but the environmental improvements are worth it. Starbucks and the environment benefit from this decision because it helps continue to portray a clean image. Another way to improve the environment directly through their stores is by “going green”. Their first attempt to produce a green store was in Manhattan. Starbucks made that decision to renovate a 15-year-old store. This renovation included replacing old equipment with more energy-efficient ones.

    To educate the community, they placed plaques throughout the store explaining their new green elements and how they work. This new Manhattan store now conserves energy, water, materials, and uses recycled/recyclable products. Twelve stores total plan to be renovated and Starbucks has promised to make each new store LEED, meaning a Leader in Energy and Environmental Design.

    LEED improves performance regarding energy savings, water efficiency, and emission reduction. Many people don’t look into environmentally friendly appliances because the upfront cost is always more. According to Starbucks, going green over time outweighs the upfront cost by a long shot. Hopefully, these new design elements will help the environment and get Starbucks ahead of their market.

    Commitment to Consumers.

    The second way Starbucks has shown corporate social responsibility is through their commitment to consumers. The best way to get the customers what they want is to understand their demographic groups. By doing research on Starbucks’ consumer demographics, they realized that people with disabilities are very important. The company is trying to turn stores into a more adequate environment for customers with disabilities.

    A few changes include: lowering counter height to improve ease of ordering for people in wheelchairs, adding at least one handicap accessible entrance, adding disability etiquette to employee handbooks, training employees to educate them on disabilities, and by joining the National Business Disability Council. By joining the National Business Disability Council, Starbucks gains access to resumes of people with disabilities.

    Another way Starbucks has shown a commitment to the consumers is by cutting costs and retaining loyal customers. For frequent, loyal customers, Starbucks decided to provide a loyalty card. Once a customer has obtained this card, they are given incentives and promotions for continuing to frequent their stores. Promotions include discounted drinks and free flavor shots to repeat visitors.

    Economy talk:

    Also, with the economy being at an all-time low, Starbucks realized that cheaper prices were a necessity. By simplifying their business practices, they were able to provide lower prices for their customers. For example, they use only one recipe for banana bread, rather than eleven!

    It doesn’t end there either! Starbucks recognized that health is part of social responsibility. To promote healthier living, they introduced “skinny” versions of most drinks, while keeping the delicious flavor. For example, the skinny vanilla latte has 90 calories compared to the original with 190 calories. Since Starbucks doesn’t just sell beverages now, they introduced low-calorie snacks. Along with the snacks and beverages, nutrition facts were available for each item.

    Also, one big way to cut costs was outsourcing payroll and Human Resources administration. By creating a global platform for its administration system, Starbucks is able to provide more employees with benefits. Plus, they are able to spend more money on pleasing customers, rather than on a benefits system.

    Commitment and Response to Shareholders.

    One way Starbucks has demonstrated its commitment and response to shareholder needs is by giving them large portions. By large portions, Starbucks is implying that they plan to pay dividends equal to 35% or higher of net income. For the shareholders, paying high dividends means certainty about the company’s financial well-being. Along with that, they plan to purchase 15 million more shares of stock, and hopefully, this will attract investors who focus on stocks with good results.

    Starbucks made its commitment to shareholders obvious by speaking directly to the media about it. In 2004, Starbucks won a great tax break, but unfortunately, the media saw them as “money-grubbing”. Their CEO, Howard Shultz, made the decision to get into politics and speak to Washington about expanding health care and the importance of this to the company. Not only does he want his shareholders to see his commitment, but he wants all of America to be able to reap these benefits.

    In order to compete with McDonald’s and keeping payout to its shareholders high, Starbucks needed a serious turnaround. They did decide to halt growth in North America but not in Japan. Shultz found that drinking coffee is becoming extremely popular for the Japanese. To show shareholders there is a silver lining, he announced they plan to open “thousands of stores” in Japan and Vietnamese markets.

    Commitment to Employees.

    The first and biggest way Starbucks shows their commitment to employees is by just taking care of their workers. For example, they know how important health care, stock options, and compensation are to people in this economy. The Starbucks policy states that as long as you work 20 hours a week you get benefits and stock options. These benefits include health insurance and contributions to the employee’s 401k plan.

    Starbucks doesn’t exclude part-time workers, because they feel they are just as valuable as full-time workers. Since Starbucks doesn’t have typical business hours like an office job, the part-time workers help to work the odd shifts. Another way Starbucks shows its commitment to employees is by treating them like individuals, not just number 500 out of 26,000 employees. Howard Shultz, a CEO, always tries to keep humanity and compassion in mind.

    When he first started at Starbucks, he remembered how much he liked it that people cared about him, so he decided to continue this consideration for employees. Shultz feels that the first impression is very important. On an employee’s first day, he lets each new employee know how happy he is to have them as part of their business, whether it is in person or through a video.

    His theory is that making a good first impression on a new hire is similar to teaching a child good values. Through their growth, he feels each employee will keep in mind that the company does care about them. Shultz wants people to know what he and the company stand for, and what they are trying to accomplish.

    Ethical/Unethical Business Behavior.

    The last way Starbucks demonstrates corporate social responsibility is through ethical behavior and occasional unethical behavior. The first ethically positive thing Starbucks involves itself in is the NGO and Fair Trade coffee. Even though purchasing mostly Fair Trade coffee seriously affected their profits, Starbucks knew it was the right thing to do. They also knew that if they did it the right way, everyone would benefit, from farmers to the environment, to their public image.

    In the fall of 2010, Starbucks chose to team up with Jumpstart, a program that gives children a head start on their education. By donating to literacy organizations and volunteering with Jumpstart, Starbucks has made an impact on the children in America, in a very positive way.

    Of course, some negatives come along with the positives. Starbucks isn’t the “perfect” company like it may seem. In 2008, the Starbucks mobile app decided to close 616 stores because they were not performing very well. For Starbucks to close this many stores in one year, they had to battle many landlords due to the chain breaking lease agreements. Starbucks tried pushing for rent cuts but some stores did have to break their agreements.

    Other thing:

    On top of breaching lease agreements, Starbucks was not able to grow as much as planned, resulting in their future landlords were hurting as well. To fix these problems, tenants typically will offer a buyout or find a replacement tenant, but landlords are in no way forced to go with any of these options. These efforts became extremely time-consuming and costly, causing Starbucks to give up on many lease agreements.

    As for Starbucks ethical behavior is a different story when forced into the media light. In 2008, a big media uproar arose due to them wanting to re-release their old logo for their 35th anniversary. The old coffee cup logo was basically a topless mermaid, which is Starbucks’ opinion is just a mythological creature, not a sex symbol.

    Media critics fought that someone needed to protect the creature’s modesty. Starbucks found this outrageous. To end the drama and please the critics, they chose to make the image more modest by lengthening her hair to cover her body and soften her facial expression. Rather than ignoring the media concerns, Starbucks met in the middle to celebrate its 35th anniversary. Maybe you definitely understand above the information and case study of Corporate Social Responsibility of Starbucks Coffee.

    Case Study in Corporate Social Responsibility of Coffee Starbucks
    Case Study in Corporate Social Responsibility of Coffee Starbucks!
  • Market Research Coffee of Starbucks’ Entry into China

    Market Research Coffee of Starbucks’ Entry into China

    Starbucks’ Entry into China: How to Starbucks Corporation is an American coffee company and coffeehouse chain? Market Research Coffee of Starbucks‘ Entry into China, Starbucks was founded in Seattle, Washington in 1971. As of November 2016, it operates 23,768 locations worldwide. Also, Starbucks considers the main representative of “second wave coffee”, initially distinguishing itself from other coffee-serving venues in the US by taste, quality, and customer experience while popularizing darkly roasted coffee. Since the 2000s, third-wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons.

    Here is the article to explain, Market Research Coffee of Starbucks’ Entry into China!

    Starbucks locations serve hot and cold drinks, whole-bean coffee, Micro ground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers, the article defines how to Entry into China; some offerings (including their annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Also, many stores sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs and tumblers; select “Starbucks Evenings” locations offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks also sold at grocery stores, Market Research.

    Starbucks first became profitable in Seattle in the early 1980s. Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s. The first Starbucks location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one-third of its stores. The company opened an average of two new locations daily between 1987 and 2007. On December 1, 2016, Howard Schultz announced he would resign as CEO effective in April 2017 and will replace by Kevin Johnson. Johnson assumed the role of CEO on April 3, 2017.

    Market Shopping:

    Starbucks uses the highest quality Arabic coffee as the base for its espresso drinks, they provide high quality that’s why Entry into China essay. Learn about their unique coffee and espresso drinks today. If You can Buy your favorite Starbucks coffee, cups, mugs, coffee makers, and brewing equipment online with free standard U.S. shipping of over $50.

    Starbucks has developed an internationalization strategy to enable the company to open stores and franchises in countries across the globe. Market research is at the core of many of the market entry strategies Starbucks is employing. Also, This case study will consider how market research has strengthened Starbucks ‘ entry into the Chinese markets.

    Market Research: Starbucks International Business Strategy.

    Starbucks entry into emerging and developed markets inform by market research.

    Starbucks conducted market research to enable a deeper understanding of the Chinese markets, and the way that capitalism functions in the People’s Republic of China (PRC). Also, China contains a number of distinct regionally-based markets, a factor that makes market research crucial to launching new stores and franchises in China. A deep understanding of intellectual property right laws is critical to successful market entry in emerging markets.

    Starbucks articulate an entry strategy that would address the dominant Chinese markets and that was design to as inoffensive concerning the Chinese culture as possible. Instead of taking the conventional approach with advertising and promotions — which could have seen by potential Chinese consumers as attacking their culture of drinking tea –, they position stores in high-traffic and high visibility locations.

    Moreover, Starbucks very deliberately began to bridge the gap between the tea-drinking culture and the coffee drinking culture by introducing beverages in the Chinese stores that included local tea-based ingredients. Also, Market research supports the development of Starbucks’ competitive internationalization strategy. The overarching competitive strategy was to create an aspirational brand. Prospective Starbucks customers in China could look forward to what Starbucks refers to as The Third Place experience.

    The Starbucks experience conveys status that is highly appealing to those aspiring to Western standards or to climbing the ladder in their own culture. Also, Market research indicates that brand consistency is important to Starbucks’ customers. When Starbucks opens a new store in an emerging market like China, the best baristas are sent for the launch and to conduct training of the baristas who will carry on when once the launch has completed.

    Market Research Addresses the Emerging Market Political Environment.

    Market research help to identify the attributes of capitalism in the Peoples’ Republic of China (PRC). Also, The middle class in China has rapidly accepted Western standards as an acceptable standard of the bourgeois class. Moreover, Chinese consumers accept purchases of luxury goods as a means of pursuing quality lifestyles. Under the influence of Communism, the Chinese considered conspicuous consumption to be decadent or indicative of a lack of a nationalistic orientation.

    Capitalism in The Peoples’ Republic of China supports the status-conscious population that manifests its interest in keeping up with the Jones’ through excessive luxury consumption. The Chinese government’s support of luxury consumption is particularly apparent in certain cities in China. The second-tier city of Chengdu serves as a market research case study in Chinese governmental support of capitalism.

    Chengdu promotes capitalism at a level evidenced by the presence of stores like Louis Vuitton and Cartier in its downtown. According to the Chengdu Retail Industry Association. Also, The stores selling 80 percent of international luxury brands are located in Chengdu. And the city ranks just third in luxury sales after Beijing and Shanghai. It is easy to see how this national orientation toward luxury goods extends to the Starbucks mobile app brand. Which is characterized by a certain degree of exclusivity.

    It is essential to understand the intellectual property rights laws and licensing issues when planning market entry in an emerging market. Also, Starbucks has used intellectual protection laws to prevent its business model and brand from being illegally copied in China.

    Four years after opening its first café in China – in 1999 – Starbucks had registered all its major trademarks in China. A number of Chinese businesses have overstepped legal bounds in their efforts to mimic the successful Starbucks model.

    The organization and structure of Starbucks’ global operations were informed by market research. The organizational strategies employ by Starbucks were derive from Starbucks’ experiences in other emerging markets support an early recognition that China is not one homogeneous market. Also, The organizational strategies employed by Starbucks addressed many Chinese markets.

    The culture dominant in northern China differs radically from the culture in the eastern parts of China. As reflected in the differences in consumer spending power inland which is considerably lower than the spending power in coastal cities.

    Starbucks market area:

    The complexity of the Chinese markets led to regional partnerships to aid in Starbucks’ plans for expansion in China; the partnerships provided consumer insight into Chinese tastes and preferences that helped Starbucks localize to the diverse markets.

    • Northern China: Joint venture with Beijing Mei Da coffee company
    • Eastern China: Partnered with Taiwan-based Uni-President
    • Southern China: Worked with Maxim’s Caterers in Hong Kong

    Starbucks’ competitive advantage is built on product, service, and brand attributes. Many of these have shown through market research to important to Starbucks’ customers. Western brands have an advantage over local Chinese brands. Because of a commonly accepted reputation for consistently higher quality products and services. A factor that establishes the Western brands as premium brands in the minds of consumers.

    When Western brands attempt to increase market share by cutting prices. They erode the very competitive strategy that gives them an edge in consumer perceptions. Moreover, Western brands cannot effectively maintain a lower pricing strategy than local Chinese brands. Maintain brand integrity in new markets. Also, Starbucks’ global brand is valuable, and maintaining brand integrity is a fundamental focus in Starbucks’ internationalization efforts.

    Starbucks brand ambassadors:

    The baristas in China acted as brand ambassadors to help embed the Starbucks culture in the new market. Ensure, that high standards for customer service and product quality maintain at each new and established ​local store. Also, Starbucks’ ability to address changing markets hone by effective and ongoing market research. Establishing and maintaining a global Starbucks brand does not mean having a global platform or uniform global products.

    Their marketing strategy in China was base on customization in response to diverse Chinese consumer target segmentation. Also, Starbucks created extensive consumer taste profile analyses that are sufficiently agile to enable them to change with the market. And to create an attractive East meets West product mix. Moreover, the localization effort is sufficiently flexible to permit each store, the flexibility to choose from a wide beverage portfolio.

    Market Research Coffee of Starbucks Entry into China
    Market Research Coffee of Starbucks’ Entry into China!
  • Case Study of Starbucks Entry to China with Marketing Strategy!

    Case Study of Starbucks Entry to China with Marketing Strategy!

    The Starbucks Entry to China; Starbucks is one of the largest coffee chains in the World. A Case Study of Starbucks Entry to China, so, the company has a unique style and atmosphere in its coffee houses. We chose China because it is the world’s most populous country with over 1.3 billion people live there and the second-largest country by land area. After 1978, the country’s economy underwent dramatic changes which involved such relief as permission for entrepreneurs to start up. Their own business and opening the country for foreign investment. Starbucks managers decided to take advantage of such an opportunity to expand their business into the new region. To evaluate the Chinese market the company used several steps of analysis. Also learn, What is the Growth Strategy for Case Study Starbucks? Case Study of Starbucks Entry to China with Marketing Strategy!

    Case Study on Starbucks Entry to China with Marketing Strategy!

    The following case study explain below are;

    Who might be interested in buying coffee in China?

    To introduce the Starbucks brand the company begun to distribute coffee for free to guests in several Beijing’s hotels in 1994. This initiative indicated that there was a strong demand for their products, particularly among foreigners in China. Local people, who strived to imitate the Western lifestyle. Also showed interest in coffee drinking. Also, the young generation was enchantment by brands and products from the West. These factors led Starbuck’s managers to learn and understand more about the business climate in that Asia country.

    Next step for Starbucks:

    Starbucks was to determine the financial and economic conditions of China. The company’s managers were aware that the Chinese Gross Domestic Product (GDP) continuously grew approximately 9 % on average and a GDP per capita was US$3.800. All these factors led to the rising income of the middle class. That was an undoubted advantage for entering the Chinese market for Starbucks.

    Third level of screening:

    At the third level of screening, Starbucks faced political restrictions. China is a highly bureaucratic country with difficult processes of getting permissions and sanctions to start and run the business. To avoid these challenges the company built and maintain. The firm relationship with Chinese local partners as well as government officials. Also, Starbucks Soong Ching-Ling Foundation received $5 million donations from Starbucks to support education in the country’s poorest regions.

    Fourth level of screening:

    The fourth level of screening involved socio-cultural forces. It showed the biggest challenges for Starbucks, because of the old tradition of tea drinking in China. In the beginning, managers didn’t know how to accustomed Chinese to drink and appreciate coffee. To acquaint employees and Chinese executives with coffee drinking experience Starbucks provided different training programs for them in which they learned more about coffee and Starbucks’ culture. The same way the company taught customers about different flavors and types of coffee. Another aspect was Chinese shopping behavior which was different from the US market. People in China spent the main slice of their monthly budget on food. This also led to success for the company.

    Fifth level of screening:

    The fifth level of China screening was focused on competitive forces. As we mentioned before China is a tea country and the share of coffee was low. Little or no competition for Starbucks was considered as an advantage. Chinese people were familiar only with one international brand which was Nestlé’s Nescafe. However, Nescafe is not a coffee house like Starbucks. As regards local competitions, it was a well-known Chinese brand Li Shen and Japanese brand Zhen Gou Coffee.

    Starbucks Entry to Chinese Market!

    “Starbucks Entry to China” Although Starbucks encountered several challenges in the process of entering the Chinese market, with their case study. They had successfully expanded its business in over 20 large or medium-sized cities of China and opened about 560 storefronts in these cities by 2012. The astonishing achievement owes to its careful marketing assessment and various marketing strategies in different periods. These strategies mainly refer to 2 different modes of entering foreign markets: licensing agreement and joint venture.

    Licensed agreement of Starbucks!

    In 1998, Starbucks adopted the mode of licensing agreement to license its Chinese partner (Beijing Mei Da), a wholesale distribution company to supply coffee beans to some selected hotels and restaurants. Starbucks realized that local partners can have the best understanding of local cultures customers and some related laws. and they have already established a good relationship with the local government. So it was easy to obtain the permissions and sanctions required to start and operate the business in a bureaucratic country like China. Moreover, Starbucks could also maintain a high standard on the control of production, and achieve an ideal revenue in the Chinese market. So licensing agreement was an optimal option for Starbucks to enter into a booming China’s market in the mid-1990s.

    A joint venture of Company!

    Starbucks formed a joint venture with different partners at different times when it entered the Chinese market. Starbucks achieved considerable knowledge about the Chinese market conditions and then began to open Starbucks stores in China. The company adopted a strategy of having three different partners to enter different regions in the Chinese market. In September 1998, Starbucks entered China under a licensing agreement with Beijing Mei Da Coffee Co.Ltd; which was their first partner. In 1999, Starbucks formed a joint venture with the Taiwan-based Uni-President Group and opened stores in Shanghai. In 2000, Starbucks entered into a joint venture with Mei-Xin International Ltd, also called “Coffee Concepts Ltd”. It managed the operations in the region of Hong Kong, Shenzhen, Macau, Guangzhou, and other parts of southern China.

    There are some advantages for Starbucks with a joint venture to enter the Chinese market. First of all, Starbucks choose a good local partner to form a joint venture which can help it better understand the local laws and negotiate better with the authorities. It is beneficial for Starbucks to obtain the required permissions and sanctions so that it can be opened easily. Secondly, local partners know the Chinese market condition better than Starbucks; therefore, it is an effective and efficient method for Starbucks to adopt a few localization strategies to satisfy different regions of customers. Last but not least, the joint venture is a good way for Starbucks to reduce operation expenditure, and it also helps to reduce risks in the Chinese market.

    Marketing and Pricing Strategies!

    “We want our customers to recognize that we’re not coming to China just to make money, we are coming to China to build an enduring company that they can trust and they can view as one of their own”. – Howard Schultz.

    “Starbucks Entry to China” Starbucks modified its menu and tried to localize its brand name by selling some food items. According to the choice of the Chinese people and selling a different kind of tea. They also changed their marketing and pricing strategies based on the needs of the Chinese market.

    When Starbucks started in China, one of the biggest challenges it faced was to make the consumers accustomed to drinking and appreciating coffee. According to analysts, compared to other countries in which Starbucks operated this task was more difficult in China because of the age-old tradition of tea drinking in the country, where coffee was seen as nothing less than a kind of Western invasion.

    Other Strategies:

    Starbucks, like any other multinational company, had to go through the dilemma of choosing whether to follow Chinese traditional tea or take a big risk of following Starbucks’ culture of promoting premium coffee. The company chose to opt for its own culture and sell the idea of the ‘Coffee drinking experience’. Starbucks started by projecting the stores as a place for social gathering. The stores were also larger in area than the ones in the US, as the idea was to make the customers feel at home, relax and spend more time there.

    Similarly, the company took initiatives to teach the customers about the different types of coffees and how to distinguish between flavors. The customers were given some samples to smell as well as sip and then describe their experience. At times if the customers did not enjoy the sample, the store employees asked them to come back again later for another ‘tasting’ session or they offered them some other drink that they enjoyed. They also spoke to the customers about the positive effects of drinking coffee. For example, they spoke about how drinking coffee helped to change their mood and how it was good to have coffee in the morning.

    Localization Strategies of Starbucks!

    Normally Starbucks follows a high standard technique to maintain its stores worldwide. But in the case of China, it adopted some strategies influenced by local culture and market conditions to gain Chinese people’s trust and confidence. Small changes were made in the texture, menu, and store layout just to match with Chinese culture and food preferences. Within a few months of opening the coffee stores.

    The company started observing that coffee culture is different for Chinese people than in the US. Where people are very busy in their daily lives and they just grab their coffee and leave. But in China coffee stores were more like a place for social gathering. Where they can sit and talk for hours with their friends and families. Therefore, according to the market needs they had to square bigger stores. In the US the normal size of Starbucks store is about 1,200 to 1,500 square feet whereas in China. They started opening stores bigger than 2,000 square feet.

    Starbucks Offer:

    It was observed that the Chinese also like to have some food along with their drink. In response to that Starbucks started offering some popular Chinese foods like curry puffs, moon cakes, and traditional cookies. Starbucks incorporates another localize strategy in every country they go, by modifying the name of Starbucks to suit the local language.

    Like in China they Change the name to ‘Xing Bake’ where ‘Xing’ represents ‘Star’ and ‘Bake’ was pronounce as ‘bucks’. Starbucks accepted the reality that maximum people in China like tea more than coffee though the young generation is more likely to go for coffee. So they decided the different menu for different stores in China. In Shanghai and westernized, the stores a standard menu where they served coffee. And in Beijing stores, they introduced different tea-based drinks like coffee-flavored milk tea, green tea-flavored frappuccino, etc. to attract more people.

    Starbucks Entry to China; Promotional and Pricing Strategies!

    To promote themselves in China the company chose a different way. It mostly depended on the people to spread goodwill through word of mouth than commercial advertisements and media products. Their knowledge, organized way of business left a good impression on customers’ mind. The customers were willing to pay a higher price for the brand name. As a result young, urban Chinese, who solely start to associate visiting Starbucks or being seen with a Starbucks cup, as a symbol of social status.

    The tire to build their reputation in terms of, product quality, customer service, employee relationship, etc. To enhance the name of “Starbucks” they had different strategies. From professional to students they had different ways to attract them. They started selling the latest DVD’s, free access to the Internet. And, also use to provide different wireless services so people can feel it like their 3rd home.

    Highest quality coffee:

    Starbucks uses the highest quality coffee beans from ideal coffee-producing climates. They helped Chinese farmers, made good relationships with their workers. They also made a good reputation in the supply market. As a result of good reputation, good quality, and high price. They were able to attract people and also maintain their luxury appeal. The company price its coffees at around US$ 6 for a cup. Which was considering analysts as too costly? Even though it was too costly by Chinese standards but they decide to continue with it because in China. A high price was directly associating with quality.

    Case Study of Starbucks Entry to China with Marketing Strategy
    Case Study of Starbucks Entry to China with Marketing Strategy.