Starbucks: Global Business Analysis and Market Entry Strategies

This report provides a detailed analysis of Starbucks' global business operations, focusing on its historical development, current market challenges, and future goals. The report examines Starbucks' planned entry into the Italian market, highlighting the significant challenges the company faces, such as bureaucratic hurdles, construction permits, and cultural differences. It also explores lessons learned from Starbucks' failure in the Australian market, emphasizing the importance of understanding local consumer preferences and competitive landscapes. The report further discusses Starbucks' social responsibility initiatives in Italy, including its commitment to community support and environmental sustainability. The analysis includes a corporate strategy overview, emphasizing market penetration, product quality, and a positive work environment. Finally, the report offers insights into the present and future goals of the company, supported by cited references.

STARBUCKS GLOBAL BUSINESS
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History of Starbucks global
business• Starbucks Corporation is an American coffee company and a coffee
house chain which was founded in Seatle , Washington in the year
1971. Presently the company is operating in 30,000 stores in different
locations worldwide e.
• The company Starbucks is considered as the main stream coffee
makers in the second wave coffee which initially distinguishes the
company from the other brands who deal in coffee production.
• Since the year 2000 companies re more focused in the second wave
coffee ad targeting the market with the quality marketed coffee
drinkers along with the hand made coffee with lighter roasts.
• Presently, the company is developing innovative ideas and
technologies to capture the market faster and increase the
productivity. (Sholihah, Ali & Prabandari 2016 )The company is using
automated espresso machines outside the stores for these who ant
an instant coffee. These machines are build for
safety and efficiency reasons.
• In America itself Starbucs is known for owning more than
over 1200 official stores and outlets with a revenue of US$700.35
million dollars.
• The company has also introduced the Starbucks mobile application
from where people will be able to purchase coffee and get it

Challenges currently facing the company
regarding its planned entry into the Italian
market
 Italy is a developed economy with the wealth of
potential , but with the cultural characteristics
and the involvement of the other layer of the
bureaucracy the new business institutions are
constantly leaving the country (Honack & Waikar,
2017).
 But with the modern development of the country’s
infrastructure as well a the well developed
economy attracts many business institutions
inside.
 Acknowledging various factors the following slides
will discuss the challenges which re faced by the
company in Italian market.

Challenges faced in
the Italian Market
 Starting a business - In Italy a company if
wants to expand its business ahs to first
deposit 25% of amount in cash to the
government before executing to a public
deed of operation and sorting out the
right procedures of accountancy.
 Dealing with the constructional permits –
In Italian market it will take a time period
of 130 days just to get a estimation of the
application submitted to the company.
According to dealing Beamish, Morey &

Continued …
 Getting access to the electricity - In terms of
getting a proper electric connection from the
external source it almost takes more than
100 days. Also simply getting the estimate
after the application will take the company a
average of two months time.
 Registering property – The company will also
have to face a steep challenge when it
comes to registering the property. Under the
certification of Attestato di Certificazione
Energetica, ACE. Th company will have to pay
a huge amount of money for the certification.

Continued …
 Getting credits and protecting the
investors – Italy is stuck with a global
credit crisis from the year 2017 which
ahs resulted in the capital flow of the
corporations. Also the World Bank has
dropped several places from getting
credit in a year.
 Paying the taxes – The Italian tax
system is much of a painstaking
situation. The company will have to
make more than 15 payments of tax
which will take the company to spend

Continued …
 Trading across the borders – Trading which
includes the exporting and importing of the
go0ds from the manufacturing companies .
The trading companies and agencies in
Italy usually takes 19 days to export
articles and commodities. Also it takes
almost 18 days to import articles.
Furthermore the authorities takes 10 days
just to process the required documents and
supply the necessary commodities.
Therefore it will be a challenging factor for
Starbucks to trade the raw materials from
the manufacturing countries.

Continued …
 Enforcing the contracts – According to the author
(Lewis,2017). Italy is known to ranked as the
world’s worst countries in enforcing the contracts.
It take a massive of more than 1200 days to
complete the Organization for Economic Co-
operation and Development (OECD) which as
compared to the other countries takes less than
500 days. Considering the long 41 procedures also
seems to be much surprising (Rayner, 2018).
 Resolving the insolvency – For the new companies
which are planning to open business in Italy it will
take the company a 1.8 year to resolve the
insolvency which will cost the company of average
22% of the estate.

Continued …
 Culture – The traditions and a sense of
history also plays a very powerful role
in the minds of the people who stay in
the country. According to the author
***** the company will have to pay high
sum of money in order to reach the
decision which acne be very lengthy
process and also in building relationship
.

What can Starbucks learn
from the Australian
experience The coffee industry in Australia is more
than $3 billion a year. The stores in the
country was already mature when it
was first opened in the year 2000.
 The Australia’s largest migrants are
mostly fro the surrounding countries
like Greece and Italy. They have a
tradition of having coffee in the
morning. The people in Australia have
also started adopting the routine
process of morning coffee.

What can Starbucks learn
from the Australian
experience Starbucks is known to own failure in the Australian
market despite of having most of the coffee lovers.
The Australian market is mostly composed of the
fast food market which is helped by the
government.
 The bargaining power of the consumers are the
strongest in the case of Australia and most of the
consumers here are youth who prefer fast foods
over the coffee.
 The company already had 6200 coffee stores and
other establishment in shopping malls, local
restaurants but it could not compete the fast food
chain of Gloria Jeans and Mc Donald who were very
hard to beat.

Starbucks operating with
humility and respect in
the Italian market
 Howard Schultz who was the company
CEO had decided to open a store in
Australia thirty three years ago. It got
the craftsmanship of the company
Milnese Barista which I the spirit of the
Italian people. Taking a note of the
passion for the community, their
friendliness, and the taste for the best
quality, Starbucks achieved a vision of
achieving the market.