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Tuesday, September 27, 2005

Starbucks Case Study Analysis

Through joint ventures, licenses, and company-owned operations, Starbucks had 1,532 coffee houses in 22 markets outside North America. The company had expanded rapidly across the world since it had set up its first overseas store in Tokyo in 1996. Additionally, Starbucks announced major plans for Latin America in February 2002. It indicated that it would set up 900 stores in Latin America by 2005 (Starbucks.com). But, the trouble is, Starbucks is loosing money to operate their overseas stores. In order for Starbucks to keep the business running, they must develop a strategic plan to turn the oversea' business around, plus, determine new ways to improve the business inside of US. IDENTIFICATION OF MAJOR PROBLEMS AND ISSUES Overall Problems Starbucks' overall problems include: the saturated coffee market inside US, and oversea stores that have generated net losses. At the same time, the stock performance fluctuated due to investors who were not confident with Starbucks' growth potential. The charts below showed that after 1999, not only the overall net income was decreased; additionally, the sales were decreasing as well (Table-1& Chart-1).





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