Starbucks Performance in the Context of Global International Business Influences and Globalization
Starbuck has an excellent performance in the global arena as it has some stores in foreign countries as well as agreements with other firms that make it easy to market its products across the international boundaries and this fact depicts the company's strength in a globalized world. By 2010, for example, the firm had a ten-year experience in China and people had made its outlets the third destination between workplace and home in the large cities and the subsidiary is set to become number two after the North American stores in term of sales. As a way of maximizing the coverage of the large cross-boundary market, the firm utilizes the social as well as the digital media and the estimated fans at the global level are 27 million and this is an outstanding performance. The unveiling of the Starbucks digital network gave the customers a chance to access music and Wall Street Journal Daily News had a great impact on the market as 8 million customers visited the system in the chain of stores and they expressed satisfaction with the firm. The network thus enabled the company to attract new customers as well as keeping the regular ones thrilled. The above information, therefore, depicts that the enterprise has a strong foundation in the international market.
In a globalized society, large corporations must seek to spread their branches across the international boundaries to serve people of various cultures in numerous international destinations or countries, and there is the need to develop products that pleases all these people. As a strategy of increasing the market coverage, Starbucks has three operational segments and these are the United States, the Global Consumer Products Group, and the International Segment and this enables the firm to have its operations in the United States and 50 other countries. In 2010 the respective net revenue sales for the above segments were 71%, 7%, and 21%. In the United States, there are licensed retail traders who sell Starbuck's products, and this strategy is called specialty operations. In the international level, the specialty services entail retail stores that sell in over 40 countries. Most of the international segment markets are licensed retail stores and company-operated outlets in the United Kingdom, Japan, and Canada. The Global Consumer Products segment consists of licensing agreements with other firms as well as a partnership or joint ventures with business partners who have a large consumer products market. These strategies, therefore, enable the company to reach a variety of clients in different countries.
The firm's active managerial efforts have made it prosper as the company operated retail stores contributed 84% of the net sales in 2010 in the United States and the international market and this is a sign of excellence in the global arena. Driven by the objective to be the number one retailer of coffee in every potential market, the firm seeks to increase the global market share through opening stores in the new markets, adding others in the existing market as well as increasing the sales. In 2010, the firm opened 13 new stores in the United States and 97 at the international level. According to Starbucks Corporation, the specialty operations raked in 16% of the net revenue from sales and thus portraying that the company can significantly serve the international market with its brands beyond a company operated retail stores environment. The company also establishes a partnership with influential third parties, and after a licensing contract, the partner sells the Starbuck's products and thus enabling the firm to serve a large market at the international level. Also, the company selects prominent retail traders who have an excellent knowledge and access to the market. The organization also sells its products to grocery stores in Canada, the United Kingdom, and other European countries and it has gone a step ahead to avail its products in clubs. Regarding the above information, the company can be considered to have a commendable performance in the global context.
To satisfy a dynamic and globalizing market, the firm has embraced innovation in its cross-boundary networks of stores and thus it has introduced a variety of products such as the Starbucks VIA Ready Brew, Seattle's Best Coffee, and Tazo Tea among others. The firm also adds value to its products through flavoring, and icing among other strategies and these contributed to an outstanding performance as it raked a revenue of $180 million in 2010. The company also attracts customers through the introduction of new occasions in the markets that it serves in numerous countries such as Canada, the United Kingdom, and the Philippines among others. The company believes in introducing multiple brands while adhering to predefined quality standards to attract clients from various cultures and countries. The strategy of diversified and multi-brand business, therefore, contributes to its coverage of a significant share of the international market. For instance, the Seattle's Best coffee is available in over 40,000 places since 2009. The firm, therefore, exploits its diversified brands to target customers from the local and international market and thus showing a good performance trend on the global scale.
The success of Starbuck does not come on a silver platter as there are stumbling blocks that pose a threat to the strategic performance. The firm also faces challenges in the international market as there is competition arising from the entry of new businesses to sell products at the cross-boundary level. Specialty shops and quick service restaurants are the primary competitors of the business and the examples are McDonald's and the Dunkin Donuts. The McDonald wages a fierce competition in the international market as it offers coffee products in Europe and may overtake Starbucks to become number one in the foreign market. However, the Starbuck management is aware of the threat and thus it seeks to improve the quality of products service and the convenience. The firm has superior products such as whole coffee beans, ground packed coffee, Starbuck VIA Ready Brew, and Tazo Tea among others that equally engage the competitor's brand in the market. The focus on quality, convenience, customer satisfaction and diversity, therefore, enable the firm to confront its competitors.
The company also uses trademarks, patents, copyrights and domain names to flex its muscle around the global market. Some of the trademarks are Starbucks, Seattle's Best Coffee, Frappuccino, and Tazo among others. The trademarks have durations that differ in various countries, but there is room for renewal if they are still in use. The copyright entails promotion material, packaging, training materials, and in-store graphics among others. Also, there are internet domain names such as Seattlebest.com and Starbucks.net and these attracts people accessing the internet from all corners of the world. The above information, therefore, shows that Starbucks has successfully spread its wings across the international boundaries.
The Starbucks Performance in the Non-monetary Perspective
The Starbuck Company seeks to appreciate and please its customers across the boundaries, and one of the efforts used is the Rewards Loyalty Program that acts as a way of acknowledging the customers. The cardholders earn free drinks after the fifteenth purchase from retail stores across the boundaries. Through the initiative, the firm gives back to the clients by a free cup for regular customers as a sign of appreciation. The move, therefore, depicts the company as successful in customer relations in the global market.
The firm also has the commitment to offer quality products and services to the customers as a sign of responsibility towards them. The managers ensure that the beverages and the whole grain coffee have the finest characteristics that meet the set coffee standards. The firm thus does responsible purchasing, roasting, brewing and packing to ensure adherence to the quality as a way of satisfying the customers in the global market. Also, the firm is an example of international companies that values the interests of the suppliers. For instance, it has farmers support centers in Rwanda and Costa Rica whereby it offers agronomy and sustainability expertise to the farmers to help them increase the quality of their products as well as increasing the yields. The company, therefore, values the interests of coffee farmers at the global level.
Also, the firm has a Coffee and Farmers Equity initiative that sets the coffee buying guidelines that guarantees financial transparency coffee quality, social and environmental responsibility and this covers suppliers from the cross-boundary level. The vendors must undergo a review done by a third party to ensure that they meet the guidelines and examples are fairly treating employees and using sustainable means of coffee production. Concerning the threat of global warming that takes place at the international level, the firm has a Climate Change Mitigation Strategy that runs for three years, and it focuses on the use of renewable energy sources, power conservation, and advocacy. The company upgrades its machines in its international outlets to lower the power usage. In addition, the company values the health of its global consumers as it adds nutritional value to the products for instance by reducing the trans-fats. The business also depicts the nutritional information on all the brands to make the customers from the global market to understand the essence of consuming the products. Through the above efforts, the company is a good performer in the global market as it seeks to satisfy the interests of all the stakeholders who range from workers, business partners, suppliers, customers, and community members among others. The company, therefore, seeks to make the world a better place especially regarding the environmental issues.
The firm is also a good employer at the global level as it offers employment to people across boundaries and seeks to maintain a good relationship with them. At the global scale, the Starbuck employees are 137,000 while in the United states they are 107,000, and in the company-operated stores they are 101,000 and others are spread in other employment areas. Outside the United States, the firm employs 30,000 people in the operational stores, regional centers, and offices as well as warehouses. Most of the employees are not members of the employee unions, and this implies that the firm has a good relationship with the workers both in the United States and the rest of the countries where it has direct operations. The presence of a vast number of employees and a good working relationship across the boundaries, therefore, depict the company as a good employer in the global labor market.