: Critical Analysis- Starbucks Coffee - Case Study Example

Case Study: Critical Analysis- Starbucks Coffee Response Starbucks’ expansion strategy for foreign opportunities began in 1995. Unlike in North America, the company adopted a franchising strategy in foreign countries like Japan by licensing its format. The company sought to gain initial licensing fees and royalties on store revenues The Company established a joint venture with a local retailer to ensure that the foreign licensees adopted the company’s successful formula (The New York Times 1).

The licensed venture bore the mandate of growing company’s presence in foreign countries. Employees and managers at the new stores had to attend training classes and adhered to the design parameters of the parent company. As such, the strategy allowed Starbucks to sell coffee and related products to the local licensees, which then resold them to customers. However, the company altered its strategy after the disenchantment with some of the straight licensing arrangements. This sought to establish greater control over the expansion strategy, derive the benefits of a local operating partner, and ensure that Starbucks adapts to local market needs in foreign investments.

Response 2The Starbucks’ SWOT analysis tells me that the company has the potential and aggressiveness to expand and compete effectively in the industry. With more than 4,600 outlets around the world, the company has a huge market presence that defines its competitive advantage. The experience of Starbucks’ managers derives effective management that helps the company to address different challenges and respond to market trends. Indeed, the company’s expansion strategy is one of the best in the industry subject to its resultant benefits.

The company is enjoying huge sales turnover that enhances it financial stability and potential for expansion. The company is maximizing the available market opportunities and has the aggressiveness and potential to invest in more than 15,000 stores outside of the United States. The company hires experienced and highly qualified employees that design and implement its market strategies and address potential challenges. Nevertheless, it is clear that Starbucks’ suffered from the economic depression and the September 11, 2001 terrorist attacks though it has since recovered.

Response 3Howard Schultz depicted his leadership in using his Italian coffeehouse experience to persuade Starbuck’s owners to experiment with the coffeehouse format that bore the Starbucks experience. He uses his leadership style to hire highly qualified personnel and allow them to do their job (Schwartz 1). Schultz uses his leadership style to encourage other top managers to appreciate challenges and use the best resources to address such challenges as seen in the case of September 11, 2001 terrorist attacks that demeaned the company sales (Schwartz 1).

The human resource implementation strategy involves managers with many years of experience from international companies like Burger King and Wendy’s. It also involves recruiting employees from colleges and community groups and training them for 24 hours in coffee making and lore. Moreover, the company hires highly qualified specialists from rival companies to address specific challenges in the design and implementation of the company’s strategy.Response 4In deciding to expand to Asian and Arab countries, Starbucks must consider some cultural and communication issues.

In Asia and Arab countries, consumers do not use the English language for communication, which would derive communication barriers between consumers and employees who mostly use the English language for communication. The company must consider training its employees on using local languages in Asia and Arab countries. It should consider that the Asian culture has a devotion to tea and not coffee that China is a country of devoted tea drinkers who do not take readily to the taste of coffee (The Economist 1).

Moreover, there are cultural issues in Arab countries on the role of women in the society. The company should train its employees to adhere to such cultures in preparing and serving coffee rest, they experience a backlash from the local community.Works CitedSchwartz, Nelson. Still Perking After All These Years The skeptics say that Starbucks has run out of room to grow. The chains surging stock price suggests they are wrong. May 24, 1999. Web. 15 July 2014. < http://archive.fortune.com/magazines/fortune/fortune_archive/1999/05/24/260237/index.

htm> The Economist. Coffee with Your Tea? Starbucks in China. October 6, 2001. Web. 15 July 2014. < http://www.economist.com/node/808595> The New York Times. Starbucks in Joint Venture with German Retailer. October 5, 2001. Web. 15 July 2014. < http://www.nytimes.com/2001/10/05/business/company-news-starbucks-in-joint-venture-with-german-retailer.html>