mgmt report - Introduction Starbucks is one of the largest...

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Introduction. Starbucks is one of the largest coffeehouse companies in the world. Starbucks coffeehouse chain is based in Seattle, Washington. The first Starbucks store was opened forty years ago on 30 th march, 1971 at Seattle Washington. Starbucks has more than 18,000 stores in 37 countries, including 700 in UK, 1,000 in Canada and more than 11,000 in U.S.A. (Wikipedia.com). Starbucks is nearly serving over 40 million customers per week and generating $ 780 million profit from $ 6.4 billion revenue (slideshare.net). Starbucks was there to give outstanding customer service, convenient customer location and the most important highest quality coffee. Their mission was to offer great atmosphere and communicate with each other with respect and pride. Maintaining such kind of high quality, and having high control had pleased Starbucks with great financial positioning. Starbucks is selling freshly brewed espresso-style coffee beverages, different varieties of pastry, teas, other hot and cold teas and sandwiches. Starbucks-brand coffees and ice cream are also sold at different grocery stores. Starbucks started giving classes to their employee in Starbucks Coffee School in San Francisco on coffee knowledge, customer service, and history of coffee. The new employees learned how to use cash register, open the bag properly, one half inch over the Starbucks logo. The training to managers were given in more details, their training included the basics of managing people, information system and store operations. When Starbucks opened their store in new market they train the newly hired employees by the experienced managers. Question 1 The licensing strategy did not work out with starbucks, because by giving license to the foreign operators Starbucks had limited control over their overseas stores. Starbucks has less control particularly in customer service, management, locations and recruitment .Starbucks realized that they did not have the control they wanted over the licenses so they can check whether the foreign operators are following their successful formula or not. Starbucks adopted the licensing strategy in the areas where they did not have ability to open its own store. Starbucks strategy was to hire a
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company who has knowledge of local know how in the target country .As mentioned in the case study, when Starbucks started to invest in the Japan they initially stared by giving license to Japanese company but they soon realized that this strategy did not give Starbucks the control they wanted and soon started the joint venture with Sazaby Inc. by investing $ 10 million. Starbucks wanted to expand all over the world rapidly, but licensing strategy did not allow the rapid growth instead the expansion rate was slow. By licensing format to Japan they were unable to follow the Starbucks successful formula which was to sell the company’s own premium roasted coffee, a special “coffee of the day”, fresh-roasted whole-bean coffee and other items. Horizon airline was one of the first users to have license to sell the coffee. In 1995, starbucks had
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This note was uploaded on 03/19/2012 for the course IACT 201 taught by Professor Rodgers during the Three '12 term at University of Wollongong, Australia.

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mgmt report - Introduction Starbucks is one of the largest...

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