Launching Starbucks in Amsterdam
In 2003, Starbucks began the operation of their EMEA Espresso heating plant in Amsterdam. The plant hosts approximately 250 employees across different departments such as production, IT and HR. All the employees are trained to offer amicable customer service. The environment offered by the company is also characterized by individual commitments and immense vibrancy. Customers who purchase Starbucks coffee do so based on the prestige associated with the Star bucks brand as well as the vibrant worldwide organizational structure (Aaker, 2001).
Focused on the mission to infiltrate the Nether lands market from the first outlet in Amsterdam, the company has the vision of providing cultivation to the human soul through an exceptional espresso experience. The company strives to ensure friendliness and productivity among the staff by providing a supportive work environment with an efficient benefits package. The clients are also treated well with frequent rewards. The reward scheme involves issuing free Starbucks mugs and espresso, which are enjoyed in the Dutch culture. The company has huge potential to attract the Dutch market.
An analysis of Starbucks using the SWOT tools reveals various aspects that have helped Starbucks maintain competitive advantage over other companies. The strengths associated with Starbucks include: they have a strong brand aspect; the company provide a wide variety of espressos; they have a global community and service; and customers can be able to modify their espressos.
On the other hand, the key weakness of the company is the provision of self service to customers. The company has opportunities that it can take advantage of in order to increase market shares in the Dutch environment. For instance, the company can take advantage of the lack of free Wi-Fi services in Amsterdam. Providing free Wi-Fi will set the company apart from the competitors. In the operations of the company, some of the threats it is most likely to face in Amsterdam are replication of their ideas by contenders and issues of ethnic factions.
Another tool that was used for the analysis of Starbucks’ idea in relation to Amsterdam is the PEST analysis. From this analysis, it is revealed that the key political factor that is likely to affect Starbucks’ operation is globalization. Netherlands has created opportunities for foreign investors such as Starbucks which makes it a probable target location. In economic aspects, Netherlands is characterized by economic blending.
The expanding purchasing power and expenditure pattern in Netherlands gives Starbucks and excellent opportunity for Starbucks. The cultural variation in Amsterdam also blends well with the variety provided by Starbucks (Webster, 1991). Similarly the technological environment can enhance the profitability of Starbucks in Amsterdam due to the potential for effective advertisement.
Despite the positive business environment in Amsterdam, there will still be competition arising from various outlets that also offer food substances and drinks as their key businesses. The mode of entry selected by Starbucks for the Amsterdam market may also favor the company to some extent. Through collaboration with the Dutch Company Servex, Starbucks has managed to exploit the advantages of joint venturing and licensing in achieving the company’s objectives (Gemunden et al., 1998).
Control of fundamental skills by Starbucks will help the company to achieve great stride in terms of customer impacts. Through the distinct cultures of espresso making, Starbucks has an opportunity to maximize profits. Starbucks plans to carry out all organizational functions within Amsterdam but through collaboration with the head office in Seattle. It is expected that operation of the store in Amsterdam will yield less profits compared to already running stores.
Aaker, D. A. (2001). Strategic Market Management, 6th ed., New York: John Wiley & Sons.
Gemünden, H. G., Ritter, T., & Walter, A. (1998). Relationships and Networks in International Markets Amsterdam: Elsevier Science.
Webster, F. E. Jr. (1991). Industrial Marketing Strategy, 3rd ed., New York: John Wiley & Sons.
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