Question

How has Starbucks successfully globalized in Turkey? What is Starbucks business model in Turkey?

Answer 1

Starbucks is a world known American coffee retail chain that services coffee and other related beverages. The company purchases, roasts and sells high-quality coffee beans and handcrafted coffee and tea beverages and a variety of fresh food items, ice cream and ready to drink products.

The main range of products is represented by the brands such as Starbucks Coffee, Seattle’s Best Coffee, Tazo Tea, Evolution Fresh, La Boulange and Torrefazio ne Italia Coffee.

The company operates with over 18 thousand retail stores in over 55 countries and runs the business through the basic directions in USA, international market, consumer products group, etc.

The result of the success of Starbucks is a well designed financial instruments and strategies, which result in the stability of the success and popularity worldwide.  

At basic level, coffee is steeped in Turkey’s culture and lifestyle as well as enjoying the drink among family and friends in an environment conducive to socializing. This is also the fundamental level of Starbucks’ business model of fine quality coffee and stores with welcoming atmospheres designed to appeal to friendly gatherings. Therefore, Tukey and Starbucks seem to be a natural fit in terms of the market. By engaging in licensing, which they had done successfully in other countries, Starbucks was even better able to tap into local knowledge and secure desirable retail locations.  

Because of the right strategies, Starbucks is growing to unpredictable levels. In 2002, the company’s value increased to exactly 300 times, a first in American history. The Turkish people, who love coffee very much, first met Starbucks in 2003.the products of Starbucks into the Turkey were a hybrid marketing strategy. Starbucks’s marketers knew that Turkey has a profound culture of coffee, they could not ignore the local coffee habit, but they also wanted to innovate. They brought western style coffee culture into Turkey. The entry of Starbucks into the Turkish market was based on localization. In all the outlets that were opened, the company localized its operations such that they would fit into the local culture where the stores were operating. Localization enhances the ability of the business to cater for the needs of the local population in Turkey where the stores are located. On the other hand, the sales increased since the stores received more customers from the surrounding areas. The strategy also made it possible for the stores to be designed in a manner that they would accommodate the unique needs of the local population.

Global Competition Starbucks is the unquestionable market leader in the U.S. and is in the early stages of an international expansion plan that could lead to more revenue coming from international than domestic locations within the decade. Also since all of its stores are company-owned, it is able to maintain the image and quality. It also spends very less amount on advertising and marketing, and relies primarily on the word of mouth. Starbucks also has strong brand recognition by consumers. It is known for its high quality. Starbucks faces the dilemma of demand out weighing the supply of coffee which has led to the increase in coffee prices.