Starbucks: An Icon Of Globalization

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• June 8, 2009
• By Vintage Brazen
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by Joseph Yi

 

Would you ever pay $5.00 for a pack of gum? My guess is that a majority of you would say “no.” While paying $5.00 for a pack of gum may sound absurd, “gourmet” gum may be just around the corner. With the days of 50-cent coffee a thing of the past and cappuccinos and lattes become mainstream, Starbucks has turned shelling out big money for “simple” products the norm.

If you drive through any big city in the United States, you probably won’t have to look far to find a Starbucks. With its green and white logo, it sometimes feels like Starbucks opens new stores just for fun. Just the other day, I saw two Starbucks in the same plaza. Whether it is by mistake or a strategic marketing strategy, Starbucks continues to open new stores, and with it comes new Starbucks aficionados.

For anyone starting a business, one can only dream of one day becoming as big and well-known as Starbucks. Started in 1971, Starbucks has joined the elite group of cultural icons which include McDonald’s and Coca-Cola. While not everyone may like Starbucks, and some even flat out hate it, no one can deny the fact that Starbucks plays a big part in the way consumers view products.

It’s Not Just Coffee; It’s “Gourmet”

Whenever I ask people why they like Starbucks, they tell me that it isn’t just coffee; it’s “gourmet.” While I’ll admit that Starbucks coffee may taste better than something you might make at home, is it really worth the extra cost? If you ask Starbucks, they will tell you “absolutely.”

Starbucks is genius in many different ways. They have taken a simple product—coffee—and turned it into a lifestyle. Coffee is no longer just a drink; it is an event in itself. Instead of just buying a cup of coffee, Starbucks is letting you buy an experience. From the renaming of sizes to Tall, Grande, and Venti, to the always-consistent “coffee house” experience, Starbucks makes you feel like you are part of something. Whether you drink it by yourself while reading a book or drink it with your friends while you talk about the latest news, people love being part of the Starbucks brand.

Building A Community Around Your Business

One of the big reasons for Starbucks’ success is due to the strong community they have built around them. Starbucks realized that no one would buy coffee at $5.00; therefore, they relied on those die-hard supporters. The ones who were convinced that the coffee they were buying was special had a huge part in the success of Starbucks. The community around them doesn’t necessarily buy Starbucks coffee because they feel it is superior in taste amongst the rest, but because of what having that Starbucks cup in your hand means.

As companies begin to use social media platforms like Twitter more and more, the importance of building community will increase. With the ability to reach millions at such a low investment, Starbucks has realized this and has set up their own Twitter feed, which has daily tweets for all their Starbucks fans. With the average consumer becoming less and less connected with traditional forms of advertising, Starbucks—along with many other companies—have realized this and have begun the transition to new media. The community that Starbucks has is not just national, but global.

Be The Global Brand

If you travel to other major cities in other countries, one of the first things you might notice at the airport is a Starbucks. While Starbucks may not have infiltrated every single terminal in the world, they are coming close to it. It seems that for every airport that has a coffee shop that isn’t a Starbucks, people always wonder why it isn’t one. When you step outside the terminals, even though you don’t speak the language, Starbucks seems to be a universal word. The best comparison to use is McDonald’s. McDonald’s has firmly established themselves as a global food empire. It doesn’t matter whether you are in China or France; the golden arches are an iconic figure that almost everyone knows.

Starting in 2003, Starbucks began their move into global expansion, just as McDonald’s began their cutbacks of new stores globally. While Starbucks is still a ways off from taking over the McDonald’s global crown, Starbucks is opening stores at an astounding rate.

With nearly 1,500 new stores being opened from 2007-2008, Starbucks continues to keep their foot on the gas when it comes to global expansion. Globally, the response has been positive, both culturally and economically as 20 percent of yearly revenue was recorded from international sales.

The factor that separates the successful companies from the elite is how they approach global expansion. The big difference between the two is that while some companies may view the states in the U.S. as many different markets, large corporations like Starbucks and Coca-Cola view the United States as one large market that is part of a whole global landscape.

While someone who is starting a business may not think about trying to win over a whole international market at first, it is important to think ahead about how you will approach it and how you will enter the market. Will you be aggressive, or will you be cautious? These kinds of questions will may determine how you fare in the global market.

The Future Of Starbucks

While I’m not a fortune teller by any means, I can predict that Starbucks is not leaving any time soon. While it is true that they did post a loss in the third fiscal quarter in 2008, having already turned coffee into an any-time-of-the-day drink and having successfully convinced people that $5.00 for a cup of coffee is reasonable, Starbucks is still in the driver’s seat. Just like any good company, it is important that Starbucks be able to ride out these poor economic times.

To be honest, I don’t drink coffee, nor do I plan to anytime soon. If I did, though, I can say that although I believe what Starbucks is doing is quite impressive as far as their global expansion and reach, I would still rather pay for $1.00 McDonald’s coffee and save the extra $4.00 for a rainy day.

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