Starbucks Corporation was founded in 1985 by Howard Schultz. The origins of Starbucks reach back to 1971, when the Starbucks Coffee Company was founded by three students in Seattle. These students, Gerald Baldwin, Gordon Bowker and Zev Siegl love coffee and tea. And this was the only reason why the set up the Starbucks Coffee Company. They just want to bring the best coffee in the world to Seattle. This time Starbucks only sold the coffee beans and the according coffee machines and mills. In the first ten years four more stores were set up. Howard Schultz, who was working in a Swedish house ware company this time, recognized the development and increasing demand of coffee mills of Starbucks. Infected by his interest in this company he started his research in Starbucks. He often went to Seattle and always met the founders of Starbucks, trying to convince them to employ him. Howard Schultz, who had no idea about coffee, but a lot of knowledge about selling, stayed very obstinate and so finally in middle of 1982 he became a manager at Starbucks. Since he joined the company he started to learn as much about coffee as he could. Inspired from the Italian coffee culture, which he got know during a visit in Milan, he wanted to introduce a coffee bar culture in the United States. After disagreements with his partners he decided to set up his own business. So, in 1985 he opened his first coffee bar in Seattle – Il Giornale. To get the capital he needed he spoke to 242 investors. 217 declined, but the others gave him the money to win the competition together with Starbucks.
In 1987 he could purchase the Starbucks Coffee Company and most important the brand name that he used for all his stores, as Starbucks was a more familiar brand to the Americans. When he acquired Starbucks for US-$ 3.8 million the company had already 11 stores and about 100 employees. He kept almost all the employees because he also wanted to make Starbucks become a social company. So, he also paid more than the minimum wage, cares for good health insurances and even offered stock options to part-time employees. So it was no surprise that Starbucks had the lowest fluctuation rate among the restaurant and fast food business sector. But today also some ex-employees mention that the good and social image of Starbucks is a fallacy, as there are long working hours and not many chances to be promoted.
Table of Contents
1 Introduction
2 Starbucks’ International strategies
2.1 Competitive Forces
2.2 Entry Strategies
2.3 Success factors
2.4 Problems of globalisation
3 Starbucks in Germany
3.1 German Coffee Market
3.1.1 Coffee Shop trend
3.1.2 Coffee - unquestioned front runner in the beverage consumption of the Germans
3.2 Starbucks’ Joint Venture with KarstadtQuelle AG
4 Conclusion
Objectives and Research Themes
This work examines the international business development and expansion strategies of Starbucks, focusing on its market entry approach and the specific challenges encountered in the German market. It evaluates the competitive positioning of the company, explores its success factors within the global and local contexts, and analyzes the impact of its aggressive globalization strategy on brand perception.
- Analysis of Starbucks' competitive forces using Porter's framework
- Evaluation of international market entry strategies: joint ventures, licensing, and subsidiaries
- Examination of success factors including the "third place" concept and specialty coffee positioning
- Investigation of globalization challenges and anti-globalization criticism
- Case study of the Starbucks joint venture with KarstadtQuelle AG in Germany
Excerpt from the Book
Starbucks’ Joint Venture with KarstadtQuelle AG
Starbucks entered the German market in May 2002 with opening the first store in Berlin. The underlying entry method was a joint venture with KarstadtQuelle AG which was formed in October 2001. KarstadtQuelle AG is holding 82% of the KarstadtCoffee GmbH. KarstadtCoffee GmbH, the joint venture between KarstadtQuelle AG, Europe’s largest department store and mail-order group, and Starbucks Coffee Company, the world's leading provider, roaster and marketer of speciality coffee, was set up last autumn and is responsible for introducing Starbucks in Germany.
Starbucks was very optimistic about its success in the German market. Why not? How can you fail with a coffee shop in a country with such a huge coffee culture like in Germany? "Our entry into the German market comes at a time when our company is undergoing unbelievably dynamic growth in Europe, as well as the two coffee houses that we opened recently in Madrid, our growth in Switzerland and Austria is exceeding our expectations. In Germany, one of the countries with the greatest coffee consumption world-wide, the market still offers us unexploited potential. I am confident that the Starbucks Coffee House experience will win many friends in Berlin's open-minded, international environment.”
Summary of Chapters
1 Introduction: Provides a historical overview of the Starbucks Corporation, tracing its origins from 1971 in Seattle to the strategic leadership of Howard Schultz and the subsequent global expansion.
2 Starbucks’ International strategies: Analyzes the company's international operations through Porter’s five forces, various entry strategies, and identified success factors and risks.
3 Starbucks in Germany: Details the German coffee market conditions and the specific joint venture partnership with KarstadtQuelle AG to penetrate the German retail landscape.
4 Conclusion: Summarizes the overall effectiveness of the expansion strategy and reflects on the potential future of the brand within the traditional German coffee culture.
Keywords
Starbucks, Howard Schultz, International Business, Market Entry, Joint Venture, Globalization, Coffee Culture, Competitive Forces, Porter's Five Forces, KarstadtQuelle, Retail Expansion, Strategy, Brand Experience, Third Place, German Coffee Market
Frequently Asked Questions
What is the central focus of this academic work?
The work focuses on the internationalization strategy of Starbucks, with a particular emphasis on the mechanisms used to enter foreign markets and the specific adaptation required for the German market.
What are the core research topics covered?
Key topics include Porter’s five forces in the context of coffee retail, various international entry modes, the success factors of the "third place" concept, and the risks associated with global expansion.
What is the primary objective of the author?
The primary goal is to analyze how Starbucks successfully adapted its business model across different cultures and to evaluate the viability of its partnership-based strategy in Germany.
Which scientific methods are employed?
The study utilizes Porter's five forces model for competitive analysis and draws on company data, industry reports, and secondary academic sources to provide a qualitative assessment of the firm's operations.
What is covered in the main body of the paper?
The main body treats the history of the company, competitive and strategic analysis, an in-depth review of entry strategies, and a detailed examination of the joint venture with KarstadtQuelle AG in Germany.
Which keywords best characterize this research?
The research is best characterized by terms such as International Business, Market Entry, Joint Venture, Globalization, and Strategic Management.
Why was the joint venture with KarstadtQuelle AG significant?
It was significant because it represented Starbucks' primary vehicle for entering the German market by leveraging the local infrastructure and market knowledge of Europe's largest department store group.
How does the author characterize the anti-globalization resistance?
The author notes that while anti-globalization activism exists and targets the brand as a symbol of ubiquity, these protests generally originate from a vocal minority, though they pose reputational and operational challenges.
- Quote paper
- Peter Strehle (Author), Michael Cruickshank (Author), 2004, Starbucks. International Business Concept and Starbucks in Germany, Munich, GRIN Verlag, https://www.grin.com/document/32098
