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
Summary Current situation 85% of its stores in NA US 80% of revenues are 99% of operating income
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
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?
What accounts for the discrepancy betweenpercentage of foreign locations and percentage offoreign net revenues? Because of their licensing strategy outside of the USA
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