Starbucks is a brand that has managed to achieve global recognition and fame. The brand's prosperity and success has brought them into popular culture. Starbucks has become a household name and an icon for the generation. The company has adopted a multi-domestic strategy as its global strategy. It is multi-domestic because the company tailors its products and services to the needs of the market (www.quickmba.com). Culture is a significant factor in their marketing strategy as well. Starbucks has grown to as a marketing success and one of the most talked about brands in the world. There are many factors to the success of Starbucks. One is the command of a premium brand. Since Starbucks is considered a premium brand, consumers are willing to pay the high prices of their products because they make social statement as well when they buy a cup of Starbucks coffee (Mulligan & Anthers 2003). Consumers of the brand will also the buy the lifestyle, experience and the attitude of a Starbucks coffee drinker.
Starbucks also believes in measured expansion. The company's decision to open branches in foreign markets is based on research information on customer traffic and local real estate. Starbucks is constantly involved in innovation and experimentation so that their products will always remain appealing to consumers. Starbucks also did not rely on traditional marketing strategies to promote their products to consumers.
With the victory of Starbucks in becoming a global brand, the company will now have to deal with a new challenge brought about the current economic crisis in the United States. The company plans to continue in expanding and improving their operations amidst the economic crisis it is facing. The company plans to improve on store efficiencies and cost-reductions while delivering long-term growth. Starbuck reaffirms their commitment to the core values and principles of the company.
The marketing strategies of Starbucks are directed towards maintaining customer loyalty through reward systems and continuous innovation (Serwer 2004). The company is taking an aggressive approach to pursue strategies for cost reduction.
Starbucks has established its presence in China as part of its global strategy. Cultural globalization has been commonly understood to mean the expansion for the movement of goods, images, technology, ideas and people in all areas around the world. This expansion has been made possible since the 1970s with the processes of globalizing economies. Globalization has been the subject of considerable anxiety as many observers have both celebrated the positive and negative effects of globalization. Globalization is a part of the study on cultural geography. The discussion below would deal with globalization in China as an example.
The trend of company globalization of many Western firms has brought a lot of opportunities and challenges for doing business in Asian countries that are currently experiencing a strong economic growth. One of the countries in Asia that is considered to be a viable market is China. With China having the biggest population in the world, it is highly possible that Western firms seriously consider expand their business and operations in the Asian country. Of course, this will not be easy as Western firms would need to overcome the social and cultural barriers that could affect their long-term survival in the country.
The globalization of many business organizations have created the need for many firms to work with people that is not part of their culture if they are to effectively manage the technology that is needed (Hendon & Hendon 1990). There are some Western products that are just applicable in the global marketplace.
There are also several products that need to have customized features to suit the needs of the different cultural and national markets like the current market of China. Products and services are evaluated by Western firms so that these would fit the needs and wants of their Chinese customers.
There is a lot of money that can be generated from China not by only the large multi-national corporations but also American companies that are small and medium in size. The gross domestic product of China is expected to increase. China is a lucrative market for the United States because of the country is the fourth biggest market for exports. Every Western company that wants to expand their operation in China will have to consider a lot of political, financial and cultural barriers. They must consider learning how to adapt the practice of working in a business environment that is rarely seen in the marketplace. The development of a carefully-planned strategy is important.