The Global Strategy of Starbucks

While Starbucks began in the U.S., the actual concept was derived in Italy.  According to company literature, the founder and CEO of Starbucks, Howard Schultz, saw how popular coffee shops were during a business trip to Milan, Italy in 1983.  Schultz observed that the success of Italian coffee shops was based on their ability to serve as a place to socialize.  As a result, Schultz returned to the United States with a plan to create a coffee culture in the United States.

Starbucks grew rapidly in the United States and in 1987, the first international location opened in British Columbia.  Today, Starbucks operates more than 5,500 coffeehouses in over 50 countries.  Starbucks globalization strategy offers the company to maintain its rapid growth base even when the U.S. domestic market is reaching complete saturation.  Starbucks learned that they must be sensitive to local customs and preferences.  For instance, in certain parts of the world, Starbucks failed because they weren’t seen as being corporately owned outsiders and not a part of the community.  Starbucks redesigned their stores to make each one closely fit into their local setting.  Starbucks also faced barriers when it entered China.  Originally perceived as un-Chinese, the company hired a Chinese translation and localization firm to help it reinvented its Chinese strategy with a menu that included more Chinese-inspired food products and coffee-free beverages.  Starbucks also opened a coffee farm and processing operations. The company knows that its expansion plans must be sensitive to Chinese values.  Today, Starbucks operates more than 550 stores in China.