Starbucks Case Study

Abstract

This paper is an examination of a U.S. company doing business internationally and highlighting its successes. For this paper the company chosen was Starbucks. The internet was used to find current articles on Starbucks and it success globally. The article chosen outlines ten key areas that Starbucks uses as a strategy in their business model. Further study was conducted and an article was reviewed on CNBC, and a video of an interview with Starbucks CEO Howard Schultz was viewed. This video included Schultz’s views on why Starbucks is successful globally, in particularly in China. 

10 Hidden Secrets of Starbucks’ Global Success, including insights into marketing and behavioral economics

If you drink coffee, and even if you don’t, we all know Starbucks. It seems that there is a Starbucks on every corner. Starbucks has become a household name in the United States and their presence is seen in our communities as the familiar coffee shop as well as in our grocery stores, where you can buy Starbucks ground coffee. What we might not think about is how global Starbucks has become. They have a very successful strategies and Starbucks is the world leader in the coffee/café business.

Article Review

In 2014, Starbucks global revenues topped $16.45 billion. There are 21,366 stores in 60 countries and employees 185,000 people. In an article for LinkedIn, author Michael Chibba outlined the 10 secrets of Starbucks global success.

#1: Start small and expand carefully

Starbucks was founded in Seattle in 1971. At this time they sold roasted whole coffee beans and at the time, was a very small company. The company was purchased by Howard Schultz in 1987. Under Schultz, Starbucks took 44 years to build into the global giant that it is today.

#2: Leadership

In what could be arguably the key to Starbucks success, is the leadership of Schultz. Schultz conceived of the concept to offer customers superior customer service, a “community experience”, the friendliness of the stores, and empowers customers to drive change.

#3: Overall Business model, Efficiency and Culture

The business model must be sensitive to culture. What is the “Starbucks Experience in the United States, is not the same as it is in Asia or any other foreign country. Efficiency is important and the author outline five ways efficiency compliments the Starbucks experience:

1. Automatic Espresso machines.

2. Prepaid Starbucks cards and apps.

3. Customers can pre-order and pre-pay for beverages and food by phone or internet/

4. Offers high-speed wireless internet service.

5. Custom-made drinks

#4: The Customer is King.

Starbucks lives by this motto that the customer is king. They do so by offering free food or drinks if the customer is not happy with the service or product. They also offer credit to be used on the next visit and they also offer perks to their loyal customers.

#5: Treat employees that they really matter.

At Starbucks, employees matter. They are not called employees, but Starbucks Partners and perks are offered like stock options and education reimbursement.

#6: Standardized training

All employees receive the same standardized training in classrooms and in-store. This is the same training whether you are a manager or a barista.

#7: Friendly Ambience

Modeled after an Italian café, the stores are designed to offer that