AN EXPLORATION OF THE INTERNATIONAL BUSINESS STRATEGIES OF STARBUCKS COFFEE COMPANY
Starbucks Coffee Company is the leading retailer, roaster, and brand of specialty coffee in the world. In the company's fiscal report for the year 2001 company officials revealed that on top of the 4,790 stores that they already have world-wide, they plan to add at least 1,200 units in fiscal year 2002. A full one-third of these new retail stores will be located in international markets. How did one small coffee shop located across the street from the Pike Place Market spread through Seattle, infiltrate the entire United States, and achieve staggering global success within a matter of 30 years?
A Limited Domestic Market
The domestic market for specialty coffee was suffering in the early 1970's when the first Starbucks store was born. Overall, in the decade between 1975 and 1985, Europe's levels of imported coffee rose significantly, those of Japan doubled, while those of the United States remained steady despite an increased population.
Much of this was attributed to younger drinkers choosing soda pop as their beverage of choice instead of coffee and older drinkers sticking with canned coffees such as Folgers and Maxwell House. However, in the late 80's and early 90's all of this began to change and the specialty coffee industry experienced booming growth.
The growing popularity of specialty coffee since the early 1970's is the result of four consumer trends: (1) the adoption of a healthier lifestyle had led North Americans to replace alcohol with coffee; (2) coffee bars offered a place where people could meet; (3) people liked affordable luxuries and specialty coffee fit the bill; and (4) consumers were becoming more knowledgeable about coffee.
Starbucks, along with many other young specialty coffee companies, recognized these trends and saw them as a tremendous...