Starbucks Case Study


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Starbucks Case Study

  1. 1. StarbucksCami, Gabriel, Akbar, Mitko
  2. 2. Summary Company’s history  1971 Seattle  2006  12440 coffee shops  Directly operates 6281 coffee houses  sales $7.79 bil.  2009  16635 coffee shops  Directly operates 6764 coffee houses  Sales $9.77 bil.
  3. 3. Summary 1987  Howard Schultz bought the original Starbucks and transformed it into Starbucks Corporation  Rapid expansion of the corporate coffee culture Late 90’  Coffee prices crisis  oversupply of coffee due to improved production techniques  Crop boom  Allegations of not providing a fair price to coffee growers => Introduced Fairtrade-endorsed coffee => Company was seen as progressive, thus averted the consumer boycott
  4. 4. Summary Current situation  85% of its stores in NA  US  80% of revenues are  99% of operating income
  5. 5. Why does Starbucks rely on licensing for most ofits international operations? Does the firm risk thedissipation of its managerial or technologicaladvantages?  Familiarity with the local environment  Faster expansion with minimal efforts  Assuming that licensing comes with the obligation to comply with the licensor’s rules and standarts, then there would be no dissipation of managerial or technological advantages
  6. 6. Can you argue the Starbucks is a global companyregardless of the strong dominance of its homeregion in terms of sales and locations?  Yes, Starbucks is a global company, because it has set up operations in many countries  Although most of the foreign operations are actually licensed => Is it the brand that is global or the organization?
  7. 7. What accounts for the discrepancy betweenpercentage of foreign locations and percentage offoreign net revenues?  Because of their licensing strategy outside of the USA
  8. 8. What are some of the reasons why Starbuckschooses to retain operational control of itsdomestic operations?  Starbucks gains more than 80% of its revenues from the USA => They would like to keep the main source of their income within tighter control