Starbucks Downsizing USA Impacts Global Growth Strategy. Essay

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Starbucks downsizing USA impacts global growth strategy. Starbucks, - coffee chain, pursues an aggressive international strategy expands globally. Please visit web site conduct research global expansion.

Starbucks downsizing and global strategy

Starbucks is one of the largest and most successful corporations in the United States, being the epitome of business triumph and an emblem of American culture and corporatism. Starbucks is also the global leader of the coffee and coffee-based beverages and the company's expansion has been based on aggressive growth through the opening of numerous stores across the globe. Today for instance, Starbucks operates nearly 20,000 stores (19,972, to be more exact) in 60 countries, including the United States, China, Mexico, South Korea, Great Britain, India and so on (Website of the Starbucks Corporation, 2012).

In China, the company operates 657 stores and the growth plans are still on their way. Still, within the United States, the company has been severely affected by the decrease in demand as a result of decreasing consumer power (due to the economic crisis). Profitability was as such negatively impacted and the company decided to downsize. At this level, a question is being posed relative to the impacts likely to be perceived in China as a result of downsizing in the United States.

2. Growth strategy in China

Starbucks' success within the U.S. And the global market place has been based on the company's ability to create a pleasant experience for the customers. The experience of consuming coffee has been transformed by Starbucks in a more pleasurable one, an entertaining one, combined with the company of friends, in a friendly ambiance, where delicious snacks can also be served.

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This strategy has also been adopted in China, where each store was specifically designed as unique, and a promoter of a superior experience for the customers. In China then, Starbucks sought to be perceived as the retailer not only of coffee, but of an attitude (Fowler, 2003).

Looking towards the future, the Starbucks executives recognize the immense potential of the Chinese market place. For instance, some notable factors influencing expansionist decisions in China include the fast growth of the Chinese economy, the increasing purchase powers of the consumer base, as well as the changing tastes of the Chinese consumers, who become more demanding and more likely to consume high end products. In such a context, the company seeks to further increase its presence in the country and attain a total number of 1,500 stores by 2015 (Business Wire, 2011).

In the massive expansion of Starbucks in China, an important role is played by the government in Beijing. Throughout the past three decades, the Chinese government has emphasized on the liberalization of the country and the attraction of foreign investors through tax deductions, proprietorship possibilities, easing bureaucracy and so on. Today, these initiatives continue and they stimulate the operations of foreign investors.

Aside from these however, several federal problems remain and continue to negatively impact Starbucks. For instance, the Chinese government limits the investments and the owned subsidies of the company. Also, they restrict the licenses and they employ unclear legislations regarding the operation of the stores. This generates uncertainties for the Starbucks Corporation, which is unsure whether it complies….....

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