Monday, September 10, 2012

Starbucks Global Expansion Strategy essay

Starbucks Global Expansion Strategy essay

Starbucks is one of the most successful companies of the US, which is well-known nationwide. Throughout its history, the company has reached outstanding results, becoming one of the leaders in the national market. At the same time, the time is changing and the process of globalization contributes to the growing competition, while the company’s administration perfectly realizes that Starbucks needs continue to progress. Otherwise the degradations is inevitable. In such a situation, it is extremely important to choose the correct strategy of the further development of the company. It is worthy of mention that, in the current situation, the company has chosen probably the most effective strategy that provided Starbucks with ample opportunities to continue growing and this strategy is international markets expansion. It should be pointed out that the main feature of its strategy is high aggressiveness of the company and its main goal is the expansion and entering new markets. The expansion of Starbucks has already overcome national borders and has acquired an international character. At the same time, the company still remains highly popular among its American customers.

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In such a situation it is obvious that the company could hardly achieve such results without its aggressive policy of market expansion. It should be pointed out that the company steadily implemented the strategy of the market expansion in the course of its development. At the beginning, Starbucks basically focused on the regional level but, as the company continued growing the necessity to expand its presence on the national level became obvious. Nowadays the company continues its traditional strategy of the market expansion but, unlike in the past, it is not focused on the national market solely. Instead, Starbucks tend to enter new markets abroad and become one of the most recognizable brands worldwide. This policy perfectly meets the current situation in the international markets which is characterized by the growing role of the process of globalization. This means that the company needs to overcome national borders and operate worldwide to remain competitive. Moreover, it is the only logical strategy because fiscal barriers between countries gradually disappear that meant that entering barriers in local markets of different countries disappear too, making the penetration of the company in these markets easier and faster.

Another important factor of the success of the company is its attitude to customers. One of the major goals of the company is the development of the positive perception of the company by its customers. To put it more precisely, the company targets at the development of the positive customer experience. This is why the company attempts to meet the current demands and interests of customers. Its major goals is the customer satisfaction that means that the customer should enjoy the ambiance of Starbucks stores and the attitude of the personnel.

One of the constituent elements of such a strategy of the development of the positive customer experience and customer satisfaction is the quality of products and services the company supplies to its customer. To put it more precisely, Starbucks increases the quality of its service through the additional training of the personnel during which employee learn how they should behave while communicating with customers and, in general, quality is the backbone of the current success and the strategic point in the development of the company. The quality refers not only to company-customer relationships but it also refers to the functioning of the company at large, including relationships between employees as well as between the administration of the company and employees. In such a way, the quality constitutes an essential part of the organizational culture of the company and one of its major characteristics customers like probably the most.

In the result of the high quality of services and products customers can buy in the Starbucks, they naturally acquire a positive experience and, therefore, they grow more and more confident in the company, its products and services. As a result, the confidence of customers in the Starbuck naturally leads to the growing popularity of the brand nationwide because the company uses the same standards in all parts of the US. At the same time, the wide spread of the company and the popularity of its brand are determinant for the commercial success of the company. It is not a secret that in modern world, the brand of a company constitutes a significant part of its market value. Consequently, the growing customer satisfaction leads to the growing popularity of the brand of the company, while the latter results in the improvement of the market position of the Starbucks through the increase of the market value of the company.

Thus, taking into account all above mentioned, it is possible to conclude that Starbucks is a leader of the national market but, in recent years, the company has started to implement new strategy of the international market expansion targeting at international, global market. It should be said that the strategy the company uses at the moment seems to be quite effective. However, it is necessary to point out that such a strategy may be accompanied by certain risks. For instance, the company may face serious problems in the result of its aggressive policy of expansion, such as the opposition of the local rivals as well as local population that can reject the new company, its product and services. In other words, the company needs to develop the positive customer experience in new markets in order to minimize apprehensions of customers in relation to the new player in the market. In this respect, the cooperation of Starbucks with local partners seems to be an effective strategy to overcome possible problems. However, the major and determinant factor of the success of the company still remains the national market and local customers. Obviously, at the present moment the US market still remains the larger market of the company. Consequently, it is vitally important to the company that the constituent elements of its commercial success in the US keep working in the future.
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