Starbucks Expansion Proposal
Starbucks Corporation is a firm that was founded in Seattle in 1971, regarded as a premier roaster, vendor, and merchant of specialty coffee globally. The firm consists of employees totaling to 182,000 individuals in 62 countries with over 19,000 managed and accredited chain stores. Their wide range of products comprises of heated and handcrafted high-grade/exceptionally priced coffee, an assortment of garden-fresh foodstuff along with other drinks. They as well sell a selection of coffee and tea merchandise and warrant their emblems through various outlets that include accredited stores, groceries, and state foodservice accounts. Also, Starbucks promotes its merchandise mix with other marquee names in its company portfolio, which comprise of Teavana, Tazo, Seattle’s Best Coffee, and Verismo. The firm competes with various industry players within the market specialty as well as those that are outside the specialty coffee industry. This corporation stretched out its commercial set-ups to new places. It achieved an economical spot in the industry as a result of the massive stakeholders that were also fascinated by investment appraisal. Today, Starbucks is believed to be amongst the renowned companies around the globe to its distinct culture of brewing coffee.
Overview of the Company and initial Analysis
Starbucks Corporation majorly operates and competes in the retail sector that involves coffee and snacks store. The firm achieved success in a short duration of time and, therefore, expanded its business operations in different locations around the globe. The company’s growth and performance progressively improved, helping it to gain additional shares in the market. The market capitalization of the company stood at $40.58B, and an outstanding market share was $743.6M in 2013. The surge in revenue and shares in the market illustrates that the policies and procedures are based on a dedicated customer base and its capability to infiltrate the massive coffee market.
The economic crunch experienced between 2008 and 2009 had a fundamental impact on the company’s growth and performance, causing a decline in Starbucks ‘ business operations. The company experienced a 6.6% decline in income. An increase in the rate of growth after the economic slump between 2008 and 2013, provided an opportunity for the company to expand its business and compete in the market by putting into consideration rivals such as McDonald’s and Costa Coffee. A total of 474 new stores were opened in the third quarter of the financial 2016 that also signalled the growth of the company.
Country of Choice
As globalization has fortified its source in every single nation globally, it turns out to be increasingly significant for various industries to run with extreme productivity and efficiency. It makes it visible to have a robust and enormous client source to achieve large profit margins. The firm views Nigeria as one of the key markets in Africa after Egypt, Morocco, and Egypt are not reluctant to acquire local equity to institute a secure grip in the nation. Moreover, they view Nigeria as a burgeoning market because the active, youthful age group is embracing the American way of life. However, Starbucks still has a smaller number of chain stores in Morocco, South Africa, and Morocco, but they comprehend this as a chance to develop the company in Nigeria. Starbucks plans to increase its undertakings in Nigeria and beyond as they only have a combined number of 61 stores being operational, which is extremely low as compared to the 20000 stores operated in Europe. The entry of Starbucks into the Nigerian market will prove to be a competitive affair for the existing brand, Café Neo.
Mode of Entry
There is instead a flair for the capitalist spirit in Nigeria. The Nigerian administration likewise grows private enterprise through exceptional levels of groundwork, corporate consultative provisions, and easiness of realizing resources. Licensing and partnerships seem to be the most suitable mode of entry into the Nigerian market, predominantly as a result of the accessibility of funds to the locals. To ultimately influence off the attainment admiration of its complementary menu that comprises coffee and food, the corporation is working towards instituting conglomerates and making food one of its main development drivers in the future. The lower threat is intricate as the franchisee shoulders the fee, which will be valuable for the firm.
To apprehend its world-wide commercial development mission, Starbucks certifies that it chooses business associates who are perfect professional managers. Afterward, Starbucks, together with its strategic associate, attempts to adapt to the business customs to the industry within the country. Another aspect of franchising involves the use of coffee cups that consist of inventive and original concepts that enhance the value of services provided by Starbucks along with the products. The Starbucks history undoubtedly depicts that the corporation emphasizes on the quality of products presented. Even though the coffee offered is a bit dearer than projected, Starbucks coffees are well-known for appeasing the clients’ thirstiness with their alluring, rich aroma, and taste. This would make it easier to penetrate the Nigerian market.