Business Policy and Strategy

Project Proposal

Project Proposal

Project Proposal

Part 1

Rodney A. Lee Sr.

Grantham University

Project Proposal: Expansion Opportunity to overseas of Starbucks Company

Introduction

Starbucks Company is a coffee company and the coffeehouse chain that is based in America. The company was started in 1971 in Seattle, Washington. The company was started by three friends namely Gordon, Jerry and Zev, who had a great interest in the sale of fresh coffee beans. The company operates a lot of locations around the globe including in the United States, China, Canada, Japan and in the United Kingdom. The locations of the Starbucks usually serve cold and hot drinks, micro-ground instant coffee, the whole-bean coffee, full-and loose-leaf teas, and espresso. Most of the Starbucks stores are involved in selling of pre-packaged food items, drink-ware and the cold and hot sandwiches (Bussing-Burks, 2009).

The company started being profitable for the first time in the 1980s, which led to the revitalized prosperity with its entry in California because of its expansion despite of the initial economic down. The company expanded their locations to Japan in 1996, and expansion to overseas now contributes to nearly one-third of the Starbuck’s stores.

Growth opportunity of Starbucks

Starbucks has been reporting increased customer traffic of late and also experience a growth of 3% in the customer count. The expansion plans of the company involve opening more stores in different locations which will be major drivers of growth for the Starbucks. Considering the size of the company it may appear that the fast growth of the company will not be experienced any further. However, the company great opportunities for growth at a pace that is healthy in the decades to come (Hill, 2010). The following are growth opportunities for the Starbucks Corporation:

a. Growing beyond coffee

One of the major growth initiatives in the company has been involving enhancement of the non-coffee sales. The selling of food has been growing at a pace that is increased compared to the rest of the company sales. The company added lunch sandwich offering that are new in order to promote additional growth. The company is also beginning to test selling of the beer, wine, and the small-plate appetizers. These new investments for the have a promising pay off, which will lead to a tremendous growth of the company (Michelli, 2007).

b. Mobile order and pay

The company is also planning a potential game changer in planning to roll out the mobile order and pay functionality chain-wide. This will enable the customers to be in a position of placing orders in advance and collect them with no waiting in line. This will be the urban solution on the convenience of the drive-through. This provides a potential growth on the delivery services and convenience in the company (Michelli, 2007).

c. Lots of ways to grow

Starbucks is moving in a fast way searching various key opportunities for growth. Investors have come to realize that some of the initiatives for growth will be successful compared to others.

Country of Choice: Italy

The country of choice for expansion of Starbucks overseas is Italy. The company has a great opportunity to succeed in Italy because the country does not sell coffee and the competition will be minimized from the rivals. Italians are fond of taking coffee, and this will be a major boost for the Starbucks in the sale of coffee to Italians. The country has protected the coffee culture thus will welcome the investment of Starbucks in the country. The flavor profile of the Starbucks actually matches the tastes of Italians thus promising success. The country has a lot of tourists who will love the coffee and also coffee connoisseurship is on the rise in the country.

Entry modes of Starbucks in the Country

Technology and globalization are two main macro environment elements of the present business settings that have presented and assisted the international expansion tactics and strategies of the companies. The success that is beyond the borders of the country of a company it’s an indication of the success of a company and also the company has grown to be required for survival in the market that is competitive. The entry modes in the foreign market include franchises, joint ventures, partnerships, exporting and the foreign direct investments. The choice of the entry mode is determined by some the factors which include the specific factors of the company, specific factors of the markets and the specific factors of the country of choice (Verbeke, 2013).

The most suitable method of entry into the Italy market by the Starbucks Corporation is the joint ventures and the wholly-owned subsidiaries. This is because using this mode of entry it will have an increased extent of monitoring the product quality or the coffee shop activities that usually trade the name of their company. The company will also be in a position to share costs and risks with the partners in the country of choice because of the reduced capital investments. The company needs to ensure that it makes a good choice of the entry mode in the foreign market because the methods it uses determines it the success in the new market (Verbeke, 2013).

Conclusion

The Starbucks is a company that has a promising future, and a lot of expansion and growth opportunities lies before. Some of the growth opportunities include expanding its stores around the globe, increasing delivery services and convenience through the mobile order and pay and also increase beyond coffee products to food items. The growth of the Starbucks in the foreign market is determined by the entry mode in the market and the marketing strategy it applies in the international market.

References

Hill, C. W. L. (2010). International business: Competing in the global marketplace : postscript 2001. Boston: Irwin/McGraw-Hill.

Bussing-Burks, M. (2009). Starbucks. Santa Barbara, Calif: Greenwood Press.

Verbeke, A. (2013). International business strategy: Rethinking the foundations of global corporate success.

Michelli, J. A. (2007). The Starbucks experience: 5 principles for turning ordinary into extraordinary. New York: McGraw-Hill.