Starbucks made important acquisitions in the past two decades what would be the 5
STRATEGIC FOCUS GLOBALISATION STARBUCKS IS A NEW ECONOMY MULTINATIONAL BUT HAS HAD FAILURES IN KEY MARKETS Starbucks is not an ordinary purveyor of a cup of coffee. It is a large Its experience in Europe has been more mixed. It has had and innovative multinational firm that engages in major strategic some success but has also encountered another different set of actions to enter new international and product markets le.g.. coffee cultures. At first, it tried to have Europeans adapt to the acquisitions]. It is a multibillion-dollar company with many stores Starbucks approach, but failed. Now, because of the importance operating in multiple countries. Starbucks set a goal to have at Starbucks places on its future in Europe, the company is adapting least 12500 stores in the USA by 2015, up from 11 128 in 2012. to the European cafe culture. This means that Starbucks is Starbucks has become a major player in Asian markets, which building larger, stores with additional seating to allow people to is interesting because it took on a largely tea-drinking culture. meet and spend time in their stores, as they have done in Asia. Starbucks expected to have at least 1500 stores operating in t has implemented other practices and products that adapt even China by 2015, a major increase over its 700 stores there in 2012. more to local (country) cultures and tastes (e.g., France, England]. Starbucks adapts to local market tastes by developing larger stores in addition to Starbucks' international thrust, it also where, for example, the Chinese can lounge and meet with friends. engages in significant innovation and strategic actions to It also has introduced flavours specifically for the Chinese market, add to its product line. In recent years, it has introduced Via, such as red-bean frappuccinos. It has products that cater to tea an instant coffee, and a single-cup coffee maker (named the drinkers as well. Starbucks' success in China is reflected by the Verismo] that allows customers to make their own lattes at fact that China was expected to quickly become the company's home. Another attempt to add to its product line was evidenced second-largest market. The average annual single store sales in by its acquisition of the tea chain Teavana. In fact, it paid US$620 China increased by almost 75 per cent from 2008 to US$886 000 million to acquire the Atlanta-based company. In recent times it at the end of 2012. also acquired a juice maker, Evolution Fresh, and Bay Bread, the Starbucks has also entered Vietnam and India with high operator of La Boulange bakeries. expectations. In 2013 it opened its first store in Vietnam. Interestingly, Vietnam is the second-largest producer of coffee Sources: J. Gertner, 2013, For infusing a steady stream of new ideas to revive beans in the world behind only Brazil. Starbucks hopes to work its business, Fast Company, http://www.fastcompany.com; A. Gasparro, 2013, with local Vietnamese farmers to grow a high-quality Arabica Starbucks enjoys sales jolt from its U.S., China stores, Wall Street Journal, http://www.wsj.com, 24 January; J. Noble, 2013, Starbucks takes on Vietnam coffee bean. In partnership with the Tata Group, Starbucks also coffee culture. Financial Times, http://www.ft.com, 3 January; A. Gasparro, opened its first stores in India, with plans to expand rapidly there. 2012. Starbucks: China to become no. 2 market, Wall Street Journal, In contrast, in Australia the scorecard has been extremely http://www.wsj.com, 6 December; 2012, A look at Starbucks' U.S. presence poor. Business Insider referred to its efforts in the country as over the years, Bloomberg Businessweek, http://www.businessweek.com, a 'huge flop'. Starbucks entered the market hard in 2000 and 5 December; L. Burkitt, 2012, Starbucks plays to local Chinese tastes, Wall Street Journal, http://www.wsj.com, 26 November; J. Jargon, 2012. had 84 stores at its peak. The problems were obvious from the Starbucks CEO: 'We will do for tea what we did for coffee', Wall Street Journal, start. The firm charged more than competitors, had stores in http://www. wsj.com, 14 November; V. Bajaj. 2012, Starbucks opens in India low-traffic locations and, basically, the well-established coffee with pomp and tempered ambition, New York Times, http://www.nytimes.com. culture of Australia was better than the Starbucks offerings. 19 October; S. Strom, 2012, Starbucks to introduce single-serve coffee maker, Melbourne-style coffee is arguably the world's best and New York Times, http://www.nytimes.com, 20 September; L. Alderman, 2012. In Europe, Starbucks adjusts to a cafe culture, New York Times, Starbucks could not compete on taste. The final 24 stores were http://www.nytimes.com, 30 March. sold to the holders of the 7-11 stores
