Starbucks Internationalisation

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Starbucks Internationalisation

Starbucks Internationalisation

In spite of a slew of stories in recent months criticizing everything from Starbucks' food to its seeming ubiquity, along with persistent sniping by Wall Street bears, Starbucks is on a roll. For starters, the stock is at an all-time high, up nearly 40% in just the past two months. What's more, the company is in the thick of its biggest wave of store openings ever, with plans to add at least a store a day, every day, for the next two years. And that's just in North America. Like McDonald's and Coca-Cola before them, Starbucks is convinced it can export its American-brewed concept around the world, especially to Asia. Starbucks already has 102 outlets in Japan, Taiwan, Thailand, Malaysia, Singapore, and the Philippines, and this year the company opened its first three locations in China. Ever the salesman, Schultz has also been talking up the company's e-commerce plans. His still-vague notion of making Starbucks the first brick-and-mortar retailer to convert physical store traffic onto the Web helped goose Starbucks' stock.

All this sounds properly ambitious and aggressive, but to some investors it may have an ominous ring. The late 1990s are littered with the wreckage of restaurant chains that expanded too fast for their market and eventually collapsed. Two years ago Planet Hollywood, with high-profile backers like Bruce Willis and Arnold Schwarzenegger, was an investor darling. On the other hand, one restaurant stock has proved to be a spectacular long-term investment: McDonald's. Analysts see similarities between Starbucks and the company that rode the humble hamburger to a market capitalization: The singular focus on one product, the overseas opportunities, the rapid emergence as the dominant player in a new niche--all this applies to Starbucks too.

Starbucks Coffee known for its aggressive expansion of coffee cafes across the US and in the air with United Airlines, signed agreement with Digital Brands, Watts-Silverstein and Cyberstruction to develop a digital strategy. Determined not to create the "same old World Wide Web site," Starbucks says its partners must find a new formula for presentation, communication and customer service on the Internet, according to McKenna.

Whether Starbucks turns out to be the next McDonald's or the next Boston Chicken depends very much on how well Schultz and his team executes their growth strategies. Schultz has to break into new markets while continuing to squeeze more of his traditional retail emporiums into an arguably over caffeinated landscape. Even tougher, he has to pull all that off without diluting the cachet that makes customers clamor to pay $1.40 a cup for Starbucks' i.e., when the generic stuff goes for 50 cents at the diner next door.

Going in, Starbucks does have one significant advantage over predecessors like Boston Chicken or Planet Hollywood: loyal customers. Many of the theme restaurants were done in by their inability to get clients to come back once the novelty wore off. But unlike broiled chicken or restaurants festooned with celebrity rubbish, good coffee is not a ...
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