Foreign Direct Investment: Starbucks Case

Essay by xfeng78University, Master'sA+, March 2004

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Requirements:The case should address all the questions provided plus any additional issues the group members feel are pertinent to the case and include a comprehensive update on the company's situation since the time of the case. The case should be written up and presented in case format: scenario, problem to be solved or decision to be made, alternatives with the pros and cons of each and finally the recommendation with the accompanying rationale.

Foreign Direct Investment: Starbucks Case



Thirty years ago Starbucks was a single store in Seattle's Pike Place Market selling premium roasted coffee. Today it is a global roaster and retailer of coffee with over 7,000 stores in U.S. and outside U.S. Starbucks Co. set out on its current course in the 1980s when the company's director of marketing came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz persuaded the company's owner to experiment with the coffeehouse format-and the Starbucks' experience was born.

The basic strategy was to sell the company's own premium roasted coffee, along with freshly brewed espresso-style coffee beverages, a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. The company also stressed providing superior customer service. Reasoning that motivated employees provide the best customer service, Starbucks' executives devoted a lot of attention to employee hiring and training programs and progressive compensation policies that gave even part-time employees stock option grants and medical benefits. The formula met with spectacular success in the United States, where Starbucks went from obscurity to one of the best known brands in the country in a decade. (Hill, 2003)

The Company's objective is to establish Starbucks as the most recognized and respected brand in the world. Starbucks purchases and roasts high-quality whole bean coffees and sells them...