power point slides

S T A R B U C K S I N M E X I C O P R O F E S S O R R . S I M E O N , S F S U

B A CK G RO UND : M E X ICO

Mexico’s economic freedom for 2018 is ranked at the 63rd freest in the economic index with a score of 64.8. The score has improved with a 1.2 point increase from last year.

Mexico’s economy has quadrupled since the 1994 NAFTA.

Mexico’s corruption, weak laws, low oil production, and low oil prices are large factors as to why Mexico’s growth is constrained.

The population is 122.3 million with $18,938 per capita.

There is still a lot of indigenous people in rural areas of Mexico.

Fun Fact: The flag colors each represent something different. Green represents hope and victory, white stands for purity, and red is the blood shed by the nation’s hero's.

B A C K G R O U N D : S T A R B U C K S

T h e f i r s t S t a r b u c k s o p e n e d i n S e a t t l e i n 1 9 7 1 .

I n 2 0 0 2 t h e y o p e n e d t h e i r f i r s t s t o r e s i n M e x i c o , P u e r t o R i c o a n d I n d o n e s i a .

S t a r b u c k s p r i d e s t h e m s e l v e s i n b e i n g a n e t h i c a l c o m p a n y t h a t c a r e s a b o u t t h e i r c u s t o m e r s , e m p l o y e e s a n d t h e e n v i r o n m e n t .

Starbucks falls into two major sector categories

1. Primary sector- agriculture: “Starbucks has established farmer support centers in key coffee-growing regions to provide local farmers with resources and expertise that can help lower their cost of production, reduce pest and disease, improve coffee quality and increase the yield of premium coffees.”- Starbucks

2. Tertiary sector-retail services : they have business to customer stores all over the world. More than 500 in Mexico.

P R I C E O F A S T A R B U C K S L A T T E A R O U N D T H E W O R L D

Starbucks in Cancun, Mexico is the second most expensive in the world

S T A R B U C K O N C H O O S I N G M E X I C O

Starbucks was looking to enter the Latin American market but they were having trouble finding a country that didn’t have so much violence or that was financially stable. They also wanted to enter a market where they already had existing ties. This narrowed to the option down to Brazil, Mexico, Colombia and Argentina.

A man by the name David Spencer, a NAFTA focused lawyer, had the idea of bringing a Starbuck into Mexico while he was near Mexico City. He realized that there was an emerging middle class and that there were expresso bars in all the shopping malls, so why not a Starbucks?

Starbucks ultimately went into Mexico because they had existing trade ties. Starbucks already purchased coffee from Mexico making it easier to enter their market with their retail services.

*Image is the various stages of a coffee bean

STARBUCKS ENTRY MODE • In February of 2002 Starbucks announced that it

would be creating an enterprise with the company Alsea to open their coffee shops in Mexico.

• ” Alsea is the leading restaurant operator in Latin America and Spain of global brands in the quick service, coffee shop, casual and family dining segments”- Alsea

• It was decided to only open 20 shops within the first two years

T h e s e a r e t h e p l a c e s a n d t h e c o m p a n i e s A l s e a , t h e c o m p a n y S t a r b u c k s c r e a t e d t h e e n t e r p r i s e w i t h , i s i n v o l v e d w i t h .

STARBUCKS MARKETING

• This year Starbucks opened its first senior run, over the age of 60, Starbucks in Mexico City.

• Starbucks Mexico CEO, Christian Gurria, said that the aim of this new store is to provide jobs to seniors who would otherwise find it difficult to be employed elsewhere.

• This is a great marketing strategy because it creates buzz in the media, giving them free publicity and at the same time it helps the community.

S U C CE S S O F S TA RBU CKS IN M E X ICO

Starbucks is now the coffee shop leader in Mexico.

In a span of 16 years (2002-2018) they have opened 632 stores there, creating more than 7,000 jobs.

Starbucks is now Alsea’s most profitable brand, contributing more that 23% of its overall sales.

From 2016 to 2017 Starbucks had a 14% increase in income

In 2017 is there was a 9% decrease in income due to the current political climate. The people of Mexico were boycotting American brands due to the constant threats and humiliation of Trump.

However, to loosen the tension, Alsea made it be known that they are the head of operations for Starbucks Mexico, making it a “100% Mexican owned company”.

O U T L O O K F O R S T A R B U C K S M E X I C O

S T A R B U C K S , U N T I L N O W , S E E M S T O B E D O I N G E V E R Y T H I N G R I G H T W I T H T H E I R R E L A T I O N S H I P W I T H M E X I C O . I P R E D I C T T H A T T H E Y W I L L

C O N T I N U E T O B E S U C C E S S F U L . G O I N G I N T O B U S I N E S S W I T H A L S E A W A S T H E R I G H T M O V E B E C A U S E I T H E L P S L E V E R A G E T H E T I E S T H I S

A M E R I C A N C O M P A N Y H A S W I T H M E X I C O .

The End

REFERENCES

https://mexiconewsdaily.com/news/starbucks-celebrates-with-39-of-market/

https://mexiconewsdaily.com/news/seniors-only-staff-at-mexico-city-starbucks/

https://www.alsea.net/somos-alsea#somos-alsea-units

https://www.globalpolicy.org/component/content/article/162/27581.html

https://www.dailymail.co.uk/travel/travel_news/article-3473320/How-pay-caffeine-fix-holiday-price-Starbucks-latte-30-countries-revealed-ll-need-deep-pockets-Zurich.html

https://www.bizjournals.com/seattle/stories/2002/02/25/story7.html

https://www.starbucks.com/responsibility/community/farmer-support

https://www.starbucks.com/about-us/company-information/starbucks-company-timeline

https://www.history.com/topics/mexico/history-of-mexico

https://www.heritage.org/index/country/mexico