Starbucks is the #1 leading coffee retailer in America, and it is no surprise their popularity amongst the globe.They roast and sell their very own high-quality coffee beans along with other tea beverages, refreshers, handcrafted coffee, ice cream, and food items. Starbucks was founded in 1971 in Seattle, Washington, but due to its success, they expanded their headquarters in 1990. Coffee became a rapidly growing industry in the world, therefore, Starbucks utilized this opportunity to expand globally. Some of the main products Starbucks sells are Tazo Tea, Seattle’s Best Coffee, Evolution Fresh, Starbucks Coffee, and many more. In the 1980’s Starbucks expanded into the Midwest and British Columbia, yet suffered considerable losses. In 1990, Starbucks registered as a small profit and then expanded into California in 1991 where they became very popular and trendy. Starbucks began to introduce decaffeinated coffee, italian-style beverages, blended frappuccinos, fresh food items, and even introduced a food warming program across the United States, Canada, and China. Starbucks also sold Beverage Making equipment, accessories, and provided free wireless internet access readily available in their stores across the region.
In 1996, Starbucks opened up its first joint venture outside of North America in Tokyo with a company named Sazaby Inc. This only catapulted Starbucks’s business expansion internationally. For example, in 1998, there were more than sixty town locations in the United Kingdom which eventually led to more stores opening in Taiwan, Malaysia, and New Zealand. Nearing the end of the 20th century, Starbucks opened up its first stores in Hong Kong, South Korea, Lebanon, Qatar, Shanghai, Dubai, Australia, Kuwait, and Bahrain. Techniques that aided in the global expansion of Starbucks was due to a real estate management strategy. Most of the stores had to follow orders to keep them smelling fresh of coffee by covering the food at all times, banned smoking, and also asked employees to wear perfumes or colognes that were not draining.
Due to Starbucks’ success in North America, they achieved licensing agreements through various retail stores. In the year-end of 2011, Starbucks had 2,334 licensed stores in Asia-Pacific and 4,776 across North and South America. A licensing agreement with Kraft Foods Global helped Starbucks expand globally into Canada, the United Kingdom, and other European countries. Kraft helped Starbucks grow from a $50 million company into a $500 million company in twelve years. However, in 2009 Howard Shultz concluded that in order for Starbucks to continue its growth, they had to take their packaged goods away from licensees and begin performing the work themselves. Starbucks then offered Kraft $750 million in which they declined, therefore, Starbucks sued Kraft for breach of contract in which they were found not guilty. Although Kraft had aided in Starbucks’s expansion globally, hindsight of the partnership fell through because Starbucks was focusing on the fine print of the agreement rather than focusing on the reality of a large-scale relationship.