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Jermaine Marcus A. de Leon Y1-P5: Reaction Paper To How Starbucks Became An $80B Business

Starbucks began as a small coffee shop in Seattle and has since grown to become a global brand, accounting for nearly half of all coffee sales worldwide. Through the vision of founder Howard Schultz and persistence of the three founders, Starbucks expanded rapidly to 3,500 stores by 2007. However, overexpansion led to declining profits, forcing Starbucks to close some stores. Schultz's changes as CEO helped save the company. Starbucks now struggles in Vietnam's large coffee market due to local preferences for robusta beans and affordable local coffee shops. The company failed to understand Vietnam's coffee culture and strong local coffee industry before expanding there.

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Jermaine Marcus Deleon
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57 views2 pages

Jermaine Marcus A. de Leon Y1-P5: Reaction Paper To How Starbucks Became An $80B Business

Starbucks began as a small coffee shop in Seattle and has since grown to become a global brand, accounting for nearly half of all coffee sales worldwide. Through the vision of founder Howard Schultz and persistence of the three founders, Starbucks expanded rapidly to 3,500 stores by 2007. However, overexpansion led to declining profits, forcing Starbucks to close some stores. Schultz's changes as CEO helped save the company. Starbucks now struggles in Vietnam's large coffee market due to local preferences for robusta beans and affordable local coffee shops. The company failed to understand Vietnam's coffee culture and strong local coffee industry before expanding there.

Uploaded by

Jermaine Marcus Deleon
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Jermaine Marcus A.

De leon Y1-P5

Reaction paper to How Starbucks Became an $80B Business

I suppose the first is that I can say is the quote “started from the bottom and
are now here." I personally adore Starbucks, especially the salted caramel frappe,
and I'll always order one if I have the chance. Starbucks began as a small coffee
shop in Seattle and has since grown to become one of the largest and most
recognisable names in the world's caffeine market, accounting for nearly half of all
coffee sales. I am pleased by the three founding buddies' tenacity and Howard
Schultz's creativity; his idea propelled Starbucks and helped them secure a deal
with investors. 3,500 stores were already functioning between 2000 and 2007—
that's a lot, and I can't even begin to understand the strain and patience involved,
lol. It had its ups and downs, though, much like many other successful
entrepreneur-founded businesses. At 2007 the company hit a wall as narrated by
the narrator their stocks halted and plummeted and closed some of their stores in
order to save the business .

Schultz intuition really amazed me his makeover saved the company and made it
even better .“ I want it to be an experience not just some quick coffee
establishment” really amazing . however their rapid and growing success devoured
other industries and like forever 21 they were forced yet again to close some of
their stores mainly in U.S to lessen profit cannibalisation. I am once again
reminded about profit cannibalisation where to many stores of the same brand end
up competing against each other. this is common in Giga companies such as fast
food chains which why stores of the same company should be far away in a place.
Nowadays Starbucks is still taking half of the caffeine industry but their product
lead to some Backlash from WHO as some of their drinks are deemed unhealthy
looking at you Overtopped Whip-creams. Im also reminded that Starbucks is not
just a coffee shop or any normal coffee business IT’S A REAL ESTATE
BUSINESS even if they were to close their stores they would still be rich what a
business indeed.
Vid 2 “ Why Starbucks Struggles in Vietnam’s $1B Coffee
market

The first thing that came to mind was that Vietnamese people dislike Arabian
coffee and would rather drink domestically produced coffee than imports. My aunt
also mentioned that Vietnamese coffee is excellent, which is true, lol. Finding out
that Starbucks is struggling in Vietnam and that local vendors that are, by the way,
cheaper are outing them is startling. I adore Starbucks, but some of the prices are
outrageous, and whoever decided to open one in Vietnam is a moron because that
country is predominantly rural and agricultural and is known for its abundance of
robusta beans, which are more flavorful than arabian beans. As a result, people
frequently choose to go local and steer clear of Starbucks because they don't see
the need to spend too much money on foreign goods. They didn’t do a
background check on Vietnam This is one of the main problems and every
business should check the competition and the liking of the Area no wonder their
struggling . here in the Philippines of course Starbucks would profit as many view
it as for the rich and would take a pic then post it in instagram or any social media
platforms just for the clout. Maybe Starbucks is no longer just a place for self
enjoyment instead a device for social climbers in Philippines.

Regarding the Vietnamese issue, there are numerous robusta-based coffee


recipes that call for egg yolks and other ingredients. In light of this, there is
virtually no need to visit Starbucks in a nation with a strong coffee culture. Local
chains are more prevalent than international chains as local chains in this situation,
which also factors in economic position. While worldwide chains can't merely
focus on what country they're a big chain and should focus on the broad instead of
the specific, local chains can change faster and are more adaptive because they are
aware of what their country would appreciate. Wow issues like this does really
expand my mind. what a beautiful yet complex way of how one should really know
their competition and their target market . perplexing indeed.

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