Starbucks Coffee: Standardization and Adaptation Strategy

Introduction
Starbucks’ Business Concept and History
When academics Jerry Baldwin, Zev Siegel, and Gordon Bowker established Starbucks Coffee Company in 1971, their vision of Starbucks was that of a local business specialising in “selling fresh roasted whole beans in ...specialty stores.” (Darguste et al., 2006 p.655). Fearing commoditization of the brand, the founders were opposed to the idea of broadening the appeal of Starbucks coffee.
Howard Schultz, a marketer who eventually acquired Starbucks in 1987, made selling brewed coffee to a wider market the bedrock of Starbucks (Darguste et al., 2006 p.655). The concept, “inspired by the Italian espresso bars,” transformed …show more content…

The challenge for Starbucks is to adopt both standardisation and customization without compromising its premium offering.

a) Standardization:
Starbucks’ business concept is based on a standardized premium positioning. Starbucks controls the quality of its service and products using a standardized approach. For example, Starbucks operates a strict no smoking policy even in “smoking cultures saying it interferes with the coffee aroma” (Griffin 2008, p.58) and its coffee is roasted to its own set standards. In addition, standardization facilitates brand awareness through corporate branding, standardised service and “replication of its stores concept” (Darguste et al., 2006 p.660). Starbucks uses an ethnocentric approach to appeal to customers who seek an “American experience” (Griffin 2008, p.58-9). While this makes Starbucks’ offering distinct from local competition, ethnocentrism is a reflection of the company’s self-reference criterion (SRC). SRC creates biased a perception of local market conditions in favour of a home country perception (Kotabe and Helsen 2008, p.133). Starbucks benefited from costumer aspirations for American life style in Singapore, China and Japan (Wyatt 2004),however, in Australia Starbuck had to close 80% of total outlets in 2008 because, “with an existing coffee culture, Australian consumers were not drawn into the novelty of the Starbucks