Illycaffe
Starbucks
Our tasks：
Given Illycaffe’s move into the United
States coffee market, management as well
as consumers may question Illy’s
positioning versus Starbucks coffee.
Although Illycaffe entered the U.S. market
mainly through B2B ventures while
Starbucks dominates the retail market,
both coffee companies are bound to clash
at some point through exploring each
other’s business segments.
Our Questions
1） What are Starbucks CSAs and FSAs?
How do these advantages explain the
chain’s success in the United States?
2） How internationally mobile is the
Starbucks concept? Any barriers to entry?
3） Franchising would seem a natural
entry mode for Starbucks, but the chain
sometimes owns the shops even abroad.
What could be the explanation?
4） you were Andrea Illy, what strategic
plan would you develop?
Introduction about
Illy is annoyed when companies like Starbucks call
their drinks espresso, latte, or hybrid Italian names like
frappuccino, and refer to their employees as baristas.
But the business of coffee has fundamentally changed, on
both sides of the Atlantic, and it is companies like
Starbucks that have changed it.
Illycaffe have five kind of caffe bars:
In downtown meeting place ——core bar.
•2. In a commercial center or cultural center——landscape bar.
•3. In airports and railway stations——transit bar.
•4. Located outside the city center——community bar.
•5. In the hotel lobby or a small business center——corner bar.
• 1.
What are Starbucks CSAs and
FSAs? How do these
advantages explain the chain’s
success in the United States?
FSAs:
Firm Specific Advantages
1. Starbucks is a very profitable Corporation, earning in excess of
$600 million annually, although the sales figure decreased recently.
It has almost 9000 cafes in almost 40 countries and is planning to
open more than 700 new ones this year.
2. It is a global coffee brand built upon a reputation for products and
services of hith quality.
3. The cooperate principle of Starbucks is the ‘Return of Happiness’,
which means only to the employees’ happiness, which leads to the
happiness of the customers, can the company run a happy
business. Hense, the company offer favourable welfare benefits
and staff are valued.
4. Starbucks has strong ethical values and contribute to some
ethical mission to the society.
CSAs
Country Specific Advantages
Now Starbucks are breaking into Asian’s market and the followings are
some CSAs of Starbucks especially on Asian’s market.
1. Compared to the European market with a long-history tradition and
more districts, Starbucks have gained more apllause in Asian ares,
because its fashionanl icon.
2. Starbucks carry out some innovative rules to cater to the local meets of
the Asian markets’ customers. For example, Starbucks mooncakes have
been produced. After brought in to the Taiwan’s market, Starbucks
mooncakes became hot sales and new booking were ordered very
popularly. Because of the success, Starbucks is planning to lauch more
new products including mooncakes and other traditional snack of special
taste, high materials, and with fashional package, as the first choice to the
festival present in local areas.
3. Starbucks is trying its utmost to build the most classic atmospheres and
offer the high class services to customers.
2） How internationally mobile
is the Starbucks concept? Any
barriers to entry?
►Funded in 1971 with the opening
of the 1st location in Seattle’sPike
Place Market selling coffee beans
only.
► Howard Schultz joined
Starbucks in 1982 sa director of
retail operarions and marketing.
► Schultz purchased the
company in 1987 and Starbucks
Coffee Company opened the first
store to sell brew coffee and
espresso beverages.
► Completed IPO on NASDAQ in
1992 under the trading symbol
“SBUX”,thus opening a new
chapter of growth for the company.
► Currently operating in 39
countries around the world with
more than 13000 stores and over
145000 partners.
I’m Starbucks
Starbucks’
business structure
CEO~
Starbucks have three kind of business structure in
the global: self-owned, joint ventures,licensing
agreements.
What’s more, Franchising would seem a natural
entry mode for Starbucks, but the chain
sometimes owns the shops even abroad.
For example, in china, Since the beginning of
China's new to the market, so when Starbucks
entered the Chinese to prepare, they chose the
means of franchising.
Franchising would seem a natural
entry mode for Starbucks, but the
chain sometimes owns the shops
even abroad. What could be the
explanation?
• In order to understand why Starbucks
is so successful, we have to perform
internal and external analysises of the
corporation.
• Although the growth on the coffee
market has been slowdown,
competition is still tremendous, and
new firms are trying to enter the low
barrier market constantly . The
corporation is affected by political,
economic, social and technogical
factors within its marcoenvironment
and the competition that already
exists,the power of buyers
andsuppliers play a major role in the
business’ market growth.
• In order for the company to maintain the competitive edge,
it has to remain the innovative skills and continue offering
new differentiated products, investing in its partners and in
its ethical values towards the environment.
Imagine you were Andrea
Illy, what strategic plan
would you develop?
If I were Andrea Illy, I would set up a branch which
is mainly responsible for selling our company’s
products and services in the U.S., enabling it to
supervise the distribution of their firm’s goods and have
easy access to the exporter’s staff to place orders or
seek help and advice. It can also recruit some local staff
who are very familiar with the local condition.
On the one hand, it will be propitious to close
the culture distance. On the other hand, it will be in
favor of understanding the local tastes and market
needs, making the export coffee more suitable for
the local people and offering better services.
Illycaffe entered the U.S. market mainly through
B2B and Starbucks dominates the retail market of
the U.S., so I thinked we could cooperate with
Starbucks.
As Starbucks and us both are with stong
background, cooperation will conquer the
disadvantages of two parties and come into a winwin end.This would let Illycaffe syncretize in the
U.S. more quickly and better.
Our team:
06级 国际经济与贸易（3）班
钟颖珊 3206004442
（Question 1）
杨双双 3206004441
（Question 2）
肖晓伟 3206004440
（Question 3）
伍玉灯 3206004439
（Question 4）