Starbucks Business Plan Essay Example

decisions regarding the expansion strategy. The segmentation process will be integrated with Ansoff’s Matrix to create four strategic scenarios for expansion, considering concentration and diversification. Additionally, entry mode strategies will be assessed, taking into account environmental rules and constraints. Furthermore, the strategy will be evaluated in terms of timing, determining whether an incremental or simultaneous strategy is more suitable. A research plan will be created to address any information gaps that may exist and outline how this information could have been collected if resources were available.

The use of the proposed theories and methods will be demonstrated using a case study on Starbucks. Starbucks is the leading company in the specialty coffee industry and is well-known for its internal capabilities that provide opportunities for expansion strategy evaluation.

Starbucks, based in Seattle, Washington, is a global chain of coffeehouses with operations in 50 countries. It is recognized as the largest coffeehouse company globally, operating over 16,858 stores. This includes more than 11,000 stores in the United States, over 1,000 in Canada, and 700+ in the UK. The product range offered by Starbucks includes drip brewed coffee, espresso-based hot drinks, various other hot and cold beverages, coffee beans, salads, sandwiches (hot and cold), pastries snacks as well as items like mugs and tumblers (Starbucks, 2010).

Starbucks promotes books, music, and films through its Starbucks Entertainment division and Hear Music brand. The company also provides seasonal and localized items in its stores. Furthermore, Starbucks' ice cream and coffee are available in grocery stores. During the 1990s to the 2000s, Starbucks was inaugurating a fresh store daily. In the mid-1990s, the company established its initial store beyond the United

States or Canada. Presently, international stores constitute nearly one third of Starbucks' overall number of stores (Starbucks, 2010).

The work group from Aalborg University has identified issues concerning International Business and International Marketing in the coffee shop chain industry. In this project, Starbucks will be used as an example to explore the expansion into the Danish market. The focus of this project is on the coffee shop chain industry and its expansion strategies in Denmark. Various methodologies and scientific paradigms will be discussed and applied to justify the decisions made throughout the project. The theories covered in this semester's course, as well as additional theories, will be utilized. Additionally, a research plan will be presented to gather information that was not initially available for this project.

Lastly, the Starbucks coffee shop chain originated in the United States and will be used as an illustrative case to examine the expansion of coffee shop chains. To determine if there is a market for coffee shop chains in Denmark, it is necessary to consider the presence of Starbucks, Baresso, and other coffee shops in the market (Starbucks i Danmark, 2010 and Baresso, 2010). The problem and question at hand is how a player in the coffee shop chain industry can enter the Danish market, and how existing players can expand their position. It would also be interesting to explore different entry modes for entering the Danish market and applicable theories for expanding an existing coffee shop chain. Additionally, an analysis of the macro-, micro-, and internal environment is important.

The objective of this project is to analyze market opportunities for coffee shop chains in the Danish market and determine the

optimal expansion strategy. The project design includes an overview, starting with the methodology chapter which presents the methodological views of Arbnor and Bjerke, as well as the paradigms of Burrell and Morgan. A comparison between these two approaches will be conducted. Furthermore, a theory chapter will be included to present all the theories utilized in this project.

Following the methodology and theory chapter, a subsequent chapter will integrate these two chapters. This integrated chapter will additionally encompass the presentation of a research plan that offers an overview of unavailable information for this analysis. It will further demonstrate how this information would have been gathered had the necessary resources been accessible. Subsequently, there will be an illustrative case featuring Starbucks, a renowned coffee shop chain. The existing data on Starbucks and the Danish market will be examined to analyze the previously discussed theory. The aim is to investigate whether there exists a market for Starbucks in Denmark.

Finally, there will be a conclusion of the findings of the analysis. This chapter examines the analysis of Arbnor's and Bjerke's thoughts on methodology and how to approach this aspect in a project, as well as Burrell's and Morgan's thoughts. These two approaches will be compared and used in different parts of the project as appropriate. In terms of the theory of science aspect, the group identifies as situationalists. This means that the group believes in the possibility of blending different paradigms and then selecting the most suitable parts from each paradigm throughout the project.

In the project, different chapters and areas will be examined with various methodological views or paradigms. The group does not adhere strictly to one view or

paradigm but believes in mixing them. The choice of paradigm depends on the problem at hand. Consequently, the project will primarily be analyzed from a situationalist perspective. This is also why the group incorporates both Arbnor and Bjerke's approach and Burrell and Morgan's philosophy into their work (Bryman, Bell 2007, p. 129).

Arbnor and Bjerke propose three methodological views in the field of science: the analytical view, the systems view, and the actors view. These three approaches will now be outlined. In brief, the analytical view seeks to explain reality, the systems view may aim to explain or understand reality, and the actors view is solely focused on understanding reality as it is. (Arbnor, Bjerke 2006, p. 51).

The analytical perspective asserts that reality consists of factual elements. It acknowledges the existence of objective facts and subjective facts, both of which are considered as true. Objective facts are unambiguous circumstances that cannot be disputed based on personal opinions. On the other hand, subjective facts refer to true opinions held by individuals. Despite their differences, both objective and subjective facts are treated as equally valid and objective.

When searching for facts, the issue of determining the truth often arises. The analytical view involves identifying elements that remain constant despite environmental changes and differing perspectives. Logic and mathematics play key roles in the analytical view, which aims to construct accurate representations of reality, known as models. Therefore, an analytical approach to a project involves seeking out these representative models.

The analytical view asserts that theory comprises models of factual reality, models that hold true for multiple real-life cases. A crucial concept in this view is the hypothesis, which proposes an explanation

for specific facts and aids in investigating others. Conversely, the construction of hypotheses can serve as the objective of a project. The analytical view is characterized by its formalistic structure and abundant rules.

There are guidelines determining what is considered reality, regulations governing the definition of science, and three fundamental types of studies: explorative, descriptive, and explanatory. The analytical perspective, as previously mentioned, prioritizes facts. Consequently, knowledge creators primarily collect facts, describe them, and then make predictions based on their theories. Another key principle of the analytical view is recognizing the interconnectedness of everything and the existence of underlying causes for phenomena.

According to Arbnor and Bjerke (2006, p. 81-102), the analytical view and its operative paradigm are defined by their cyclical nature. This means that they start and finish with facts. Figure 2 illustrates this cyclical process of knowledge creation.

According to Arbnor and Bjerke (2006, p. 91), the Analytical View regards knowledge creation as a cyclical process. This perspective is rooted in analytical philosophy, which originated in the 20th century and continues to have significant influence within various fields, particularly the philosophy of mind. Currently, analytical philosophers are primarily concerned with defining meaningfulness, acquiring knowledge about the actual world, and identifying the factual components that comprise it.

The analytical view is based on positivism, which asserts that scientific knowledge is the sole valid form of knowledge. This perspective gives priority to observable facts and excludes metaphysical speculation. To summarize this viewpoint, it includes the following aspects:

Conception of reality:

• The recognition of objective reality.
• The division of the world into independent parts.
• The summative nature of the world.
• The governance of the world by laws and rules.
• A causal relationship existing within reality.

Conception

of science:

• Knowledge that is general and universal in nature.
• Knowledge that is independent of the researcher.
• The quantitative nature of knowledge.
• Basing knowledge on explanatory models.

Scientific ideals:>
Ethical aspects: In essence, there are no ethical concerns.

• In principle, no considerations.

Human nature: Man is rational.

• Man is rational.

Man can be comprehended through a stimulus-response viewpoint (Arbnor, Bjerke 2006, p. 95). The systems view incorporates three interconnected philosophies: systems theory, holism, and structuralism.

Systems theory is a framework that employs systems language and thinking to examine organizations. It enables the examination and depiction of various collections of objects that work together to achieve outcomes, such as individual organisms, organizations, and societies. Holism emphasizes that the characteristics of a system cannot be determined exclusively by its individual elements.

Instead of focusing solely on the behavior of individual parts, the system as a whole has a significant impact. This contrasts with reductionism. In terms of science, holism suggests that it is impossible to perfectly predict the behavior of a system regardless of available data. Structuralism pertains to various theories in fields like humanities and social sciences which believe that studying structural relationships can be enlightening and valuable. This perspective applies broadly across academic disciplines that explore the connection between key elements in their respective fields, whether they are expressed as concrete structures, cultural structures, or structural networks.

The systems view is a popular approach for analyzing culture and society, also known as structuralism or holistic view. This view aims to both explain and understand reality.

In the following figure, Picture one represents a model that depicts reality as it is, while Picture two is an interpretation.

In addition to presenting reality as it is, another element is introduced. One common approach is to incorporate a metaphor, created by the knowledge creator. This metaphor is applied to the systems model in order to gain further understanding of the situation (Arbnor, Bjerke 2006, p. 102-130). See Figure 3.

Arbnor and Bjerke (2006, p. 104) state that Systems Explanation and Systems Understanding can be attained through the utilization of different models and concepts. The systems view can be categorized into three groups: systems analysis, systems construction, and systems theory. Systems analysis entails representing a genuine system in a systems model or interpretation without modifying the system itself. Conversely, systems construction pertains to the creation of an entirely novel system.

There are two categories in systems theory: general systems theories and specific systems theories. The underlying concept of this system view is neo positivism, also known as logic positivism. According to neo positivism, a sentence is only meaningful if it can be verified, which can be done empirically through experiments and evidence or through analytic truths that are true or false by definition.

To summarize the systems view, it includes the following key points:

Conception of reality:

• Reality consists of systems, and there may be synergy between their elements, indicating that the world is not simply a sum of its parts.

Conception of science:

• Knowledge is independent of the researcher and can be measured and assessed.
• The systems themselves are pragmatic, implying that knowledge is not independent of the researcher.
• Descriptive or explanatory models can be developed.
• Knowledge is unique.
• Analogy plays a role in creating
  

knowledge, among other factors.

Scientific ideals:

• Aiming to gain a better understanding of how systems function, including synergistic effects, to create new and improved systems.

Ethical aspects:

• The values within organizations.
  Human nature:

127). LytL? s fonetisk Ordbog - Vis detaljeret ordbog The actors view asserts that individuals should be perceived as both particles and waves, exhibiting unlimited freedom. According to this viewpoint, as knowledge creators, one should never remain detached in order to observe. Instead, active involvement reveals that entities move according to personal decisions. It is appropriate to discuss the actor within the actors view.

The text emphasizes a concern for individuals as intentional beings who are active, reflective, and creative. This viewpoint aligns with constructivism, which posits that humans develop knowledge and understanding through the interaction of their experiences and ideas. In this conceptual framework, the learning process holds greater significance than the mere acquisition of knowledge (Arbnor, Bjerke 2006, p. 131-170). The central tenet of the actors view is the existence of a social reality.

In other words, our reality is shaped by our personal experiences as well as the shared experiences we have with others. This interaction between our individual and collective experiences is known as subjectification. When we communicate these subjective experiences using a shared language, it is called externalization. The process of turning an externalized human action into something objective is called objectification.

The final process is known as internalization. Afterward, all four approaches will be explained. Figure 5 illustrates the four paradigms for analyzing social theory (Burrell, Morgan 1979, p. 22). The functionalist paradigm examines its subject matter

from an objective perspective.

Functionalist theorists have been at the forefront of the order, approaching general concerns from a standpoint that is realist, positivist, determinist, and nomothetic. Their overall approach seeks to provide explanations of social affairs that are useful and realistic-oriented.

The functionalist paradigm, rooted in sociological positivism, is often problem-oriented and seeks practical solutions to practical problems. It assumes that the social world consists of tangible empirical artifacts and relationships (Burrell, Morgan 1979, p. 25-28).

On the other hand, theorists within the interpretive paradigm follow a subjectivist approach to analyzing the social world. This perspective aligns with the sociology of regulation, although the connection between the two is more implicit than explicit.

The interpretive paradigm, also known as interpretive sociology, aims to comprehend the world in its current state by understanding the subjective nature of the social world. It rejects the idea of objective reality and instead focuses on the individual's role in creating the emergent social process. This paradigm seeks to gain a genuine understanding of the subjectively constructed social world. Interpretive sociology is primarily concerned with comprehending the everyday world as it truly exists (Burrell, Morgan 1979, p. 28-32).

The radical humanist paradigm is subjective and shares similarities with the interpretive paradigm. It takes a nominalist, antipositivist, voluntarist, and ideographic approach to viewing the social world. The main focus for theorists within this paradigm is the limitations that current social arrangements impose on human growth. Society is seen as being against human interests in this perspective.

The radical humanist perspective prioritizes human awareness due to the subjective approach to social science. It is founded upon the same principles as the interpretive paradigm but is defined by

opposite assumptions compared to the functionalist paradigm (Burrell, Morgan 1979, p. 32-33). On the other hand, the radical structuralist paradigm takes an objective view and shares similarities with the functionalist paradigm.

Its approach is typically realist, positivist, determinist, and nomothetic. The radical humanists prioritize awareness as the foundation for a radical examination of society, while the radical structuralists focus on the structural relationships within a realistic world. They emphasize that radical change is inherent in the nature and structure of modern society. All theorists within this paradigm share the belief that modern society is defined by conflicts that bring about radical change through political and economic crises (Burrell, Morgan 1979, p. 33-35).

Next, a brief overview of the four paradigms will be listed.
The Functionalist paradigm:

• Primary paradigm for organizational study.
• Assumes rational human action and believes one can understand behavior through hypothesis testing.
• The Interpretive paradigm: Seeks to explain the stability of behavior from the individual's viewpoint.
• Researchers attempt to observe “on-going processes” to better understand individual behavior.

The radical humanist paradigm:

• Concerned with releasing social constraints that limit human potential.
• They see the current dominant ideologies as separating people from their true selves.
• This paradigm is used to justify radical change.
• It is anti-organizational.

Radical structuralist paradigm: Theorists see structural conflicts within society that generate constant change, through political and economic crisis

(Burrell, Morgan slides, 2007, slide 13-16). Comparison of Arbnor & Bjerke and Burrell & Morgan When dealing with both Arbnor and Bjerke and Burrell and Morgan, it is interesting to make a comparison of the two. The first step will be to try to say something about the overall things in the two approaches.

Here it is possible to create a diagram that combines Arbnor and Bjerke's thinking with Burrell and Morgan's concepts (our own creation influenced by both ideas). The diagram demonstrates how Burrell and Morgan's subjective perspective can be integrated with Arbnor and Bjerke's analytical approach. It is important to note that Arbnor and Bjerke study science objectively, making it possible to compare their viewpoint with the subjective aspect of Burrell and Morgan.

The systems view and the actors view are increasingly becoming subjective. Research conducted under either view is seen from a subjective perspective, although the systems view can be both objective and subjective. Additionally, it is possible to discuss the similarities between different views and paradigms. In this case, the interpretive paradigm can be linked to the actors view. Both perspectives share similarities, such as a subjective point of view and a focus on explaining behavior from an individual standpoint. Both the actors view and the interpretive paradigm also explore the social world and reality, aiming to understand them as they truly are and acknowledging human freedom and creativity.

The systems view can be linked to both the radical humanist paradigm and the radical structuralist paradigm primarily because studies in the systems view are approached from both a subjective and objective standpoint. The analytical view is positioned between the radical structuralist paradigm and the

functionalist paradigm. This is mainly due to the fact that an analytical analysis is conducted from an objective perspective and that positivism is a significant aspect in all these approaches. Additionally, the analytical view emphasizes hypotheses, which are also important elements in the functionalist and radical structuralist paradigms. See Figure 7 for a representation of the four paradigms for analysis of social theory and my interpretation (Own creation with inspiration from Burrell, Morgan 1979, p.).

22). The model 'Screening process for potential markets and sites' (Wild, 2009, p. 355) has limitations and assumptions. Specifically, only the steps of 'identifying basic appeal', 'analyze the macroenvironment', and 'market potential analysis' are used. This is due to the analysis focusing on Denmark as a whole market, without comparing different parts (due to lack of information). It is crucial to determine if it is opportune to enter the market from a general perspective before conducting a more detailed analysis.

The decision to select the market site will be omitted as there is only one country being analyzed. The outcome of this analysis will determine whether to expand in that market or not. The 'Basic design school model for strategy' (Mintzberg, 1998, p. 6) will be fully used and incorporated into the 'Screening process for potential market and sites' model to establish the framework for the entire project theory. The PEST Analysis will only focus on analyzing two elements: the economic and socio-cultural aspects. The political and technological factors are disregarded due to their minimal significance.

The discussion in this text focuses on actors in the microenvironment, specifically the consumer markets, customers, and competitors. The other actors in the microenvironment are not included

in the project as they are deemed irrelevant. In terms of segmenting the Danish market to identify potential customers, the first limitation is that a posterior segmentation will not be conducted due to the absence of primary data. Instead, a geographical segmentation will be done to identify the five largest cities, followed by a demographical segmentation based solely on age. Other criteria are not considered relevant for the chosen illustrative case segmentation. Some theoretical aspects are not analyzed in the illustrative case due to limited information, which will be addressed in the research plan chapter. In this chapter, Kotler and Keller’s model called ‘’the marketing research process’’ is used, but only the second step of developing the research plan is presented as it is the only relevant step for this study.

The analysis of entry modes is limited for a coffee shop chain entry in one country, and the exporting entry mode is not considered. In segmenting potential customers, the age groups of 0-14 and over 50 are not included due to health concerns related to caffeine consumption. Additionally, assuming that the number of potential customers in Denmark is sufficient for market expansion represents an assumption. This section will discuss the validity and reliability of the project and data collection. Validity refers to the safety of the measurement or investigation conducted.

Is the security so great that the results are valid? The study should be credible and trustworthy in all aspects. Additionally, validity refers to what we are measuring. When examining something, it is crucial to utilize methods that guarantee reliability, thus providing reliability to the study.

Regarding the reliability aspect, our goal is to evaluate whether the

investigation yields consistent results that others would obtain if they conducted the same investigation. Additionally, reliability pertains to the accuracy and precision of what we are measuring. To address this, we gathered data that accurately represents the chosen situation and aids in solving the problem at hand. The project utilized data from various sources, including literature from both this semester and previous semesters as the foundation for our methodology and theory. Furthermore, we collected additional pertinent literature from the university library.

This type of literature is authored by renowned theorists and can be deemed valid and appropriate for this project. The theory chapter and illustrative case have relied on various articles sourced from different publications, with questionable reliability compared to the aforementioned academic literature. While certain articles on Starbucks were obtained from daily newspapers, they have been deemed trustworthy and included in the illustrative case. Additionally, the project has incorporated information from different web pages.

The main sources of web pages used for this project are primarily Starbucks’ official webpage and their competitors’ web pages. The information obtained from these web pages, such as the illustrative case, is based on the companies’ own data and is likely influenced by their own interests. Additionally, data from Danish Statistics has been used to support the illustrative case, and it is assumed to be valid for the project.

The reason for this is because they arrive.