By early 2009, Starbucks has almost 17,000 stores worldwide, with about a third of them outside the United States. Despite billions of dollars in annual revenues, annual growth of retail coffee giant dropped by half, quarter profit fell as much as 97 percent, the same-store sales were negative, and its stock price languished. Factors such as the global economic downturn and increased competition in the specialty coffee market from major players such as McDonald's and Dunkin 'Donuts have driven this decline, the closure of hundreds of domestic stores already, with many more planned. Founder Howard Schultz, who recently returned as CEO and his executive team were convinced that Starbucks growth opportunities lie overseas, where the company already had a strong position in markets such as Japan and the UK and plans to open hundreds of new stores in different places . But recent international issues, including the closure of most Australian stores on sluggish sales, indicated that Starbucks was to learn more about bringing its value proposition, the combination of premium coffee, excellent service, and the "coffee experience" to a foreign land. The key question was whether Starbucks can transport it offers value abroad, but as the three elements of the value proposition to be playing and recently entered new markets. And the stakes make the right international moving rose with every closing U.S. stores. Schultz and his team also faces a broader issue, which is used as their American and foreign stores: Could they "grow big and small are" left a huge retail, which are available as high quality products and always intimate and enjoyable experience of consumers around the world? This case presents the issue in the context of the history of Starbucks, the proven value proposition, and domestic and international growth and vision. "Hide
by Richard Honack, Sachin Waikar Source: Kellogg School Management 22 pages. Publication Date: 01 December 2009. Prod. #: KEL447-PDF-ENG
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