BUS 620 Starbuck's Coffee

1

Ashford University

Managerial Marketing

BUS 620

Name:

Date:

Starbuck's Coffee

If you ask any person outside the United States what are the foods associated with Americans the first thing out of their mouths are McDonalds’s and Starbucks. It is almost impossible to travel more than fifty miles and not see one of these companies. Starbucks Corporation is an international Coffeehouse chain based in Seattle, USA. Starbucks has more than 17,000 stores all over the world. Starbucks sells all different kinds of brewed coffee, espresso hot drinks, all different kinds of teas and many other hot or cold drinks along with selling their own coffee beans and if you really love the Starbucks name you are able to purchase all different kinds of mugs, cups and presents inside all of their stores. Starbucks is part of the American culture, it has created a generation where they view Starbucks as not just a coffee store but a place where the customer can go and relax with their laptop at the same time as sipping a great cup of coffee. It is unbeatable that Starbucks definitely sells not just a regular cup of coffee, as per their mission statement: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Farris, 2012,)What Starbucks is doing worldwide is selling an experience that the American culture quickly became to love.

If Starbucks were to open a store in Italy it would face some major differences, first the cultural differences. Italians have a total different way of how they consume coffee which is totally different than the American way “a typical serving rises only about a finger’s width from the bottom. Cappuccinos are strictly for breakfast” http://www.businessweek.com/magazine/grounds-zero-a-starbucksfree-italy-02092012.html

Here in the United States people consume large amounts of coffee as a single serving throughout the day. Other challenges that Starbucks would be faced with would be a different language, different way of how day to day business is operated. A great example is that when I was in Italy a couple of years ago, I noticed that they are much more formal with their employees here is the United States. You could hardly see employees talking to other employees; it is all business in Italy. Starbucks would be faced with a different law system, if you ask anyone about the political views in Italy the first thing that comes to mind is the mafia and corruption, which is still to this day part of the way the Italians, conduct business.

In order for Starbucks to be succefull in Italy it would have major upfront costs with consulting services to start to learn the major cultural differences along with working to resolve many bureaucratic problems within the country. In opening any business other than your home country, major investments have to be made to learn and adapt to the specific country that you are in. You cannot open a Starbucks in New York City and open another one exactly in Rome and expect the foreign one to succeed without any adjustments to the local culture. There are two entering strategies that I think should be used by Starbucks to enter into the Italian market, it would be direct investment , purchasing or renting an establishment where they would have the total say on how the business is conducted on a day to day. Another entry way into the market could be as selling franchises and licensing to the Italians. A great advantage that Starbucks has is that Italians are coffee lovers and the target market is already set up for them. What they would need to hard sell, is that Starbucks is a place where they do not have to feel rushed, have that quick sip of coffee and leave. They would have to sell the Italians on the experience of sitting down, searching the web while you sip a totally different coffee that they have been accustomed to.

References

Farris, S. (2012). Grounds zero: A Starbucks-free Italy. Bloomberg BusinessWeek. Retrieved