Starbucks Aims to Invade Nordic Region
Updated September 27, 2012, 10:14 a.m. ET
In this article, found in the Wall Street Journal, the readers are again shown a company that is trying to expand on their global presence. Starbucks, the famous Seattle based coffee shop, has announced their decision to vamp up their presence in the world largest coffee consumption market, the cold Nordic. In order to do so Starbucks has paired up in a strategic alliance with the Norwegian firm Umoe Restaurant Group in order to attract and maintain a steady consumer base.
These type of market development strategy is not new for Starbucks as they opened 500 new stores worldwide last year alone, many of which were licensed. However, the plan for their new Nordic market is to reintroduce the customers to enjoy Starbucks through social media outlets, instead of mass marketing strategies.
All of this needs to be done all while Starbucks adapts to the high cost coffee market of Oslo, and other specific Nordic opportunities. The market is evidently very different than the Western segment that Starbucks is used to, however, the founder of Starbucks new partner Umoe does not believe this should be any issue.
In fact, he stated in an interview "Starbucks's ability to associate itself with sustainable tactics (such as fair-trade coffee sourcing) could be a successful way to build a reputation among Nordic nations that tend to pride themselves on ethical business practices."
All in all, the success of this will come down to the Starbucks detailed business plan of how they will execute and implement a market development strategy. If they are able to adapt their costs, tactics, and business ethics to suit the consumers of the Nordic region, they will be able to find themselves successful in reaching a strong presence in the market.
As a fan of Starbucks, I truly believe this is a good idea for them. I find that both the external and internal environments involved in this idea are lined up nicely. First off, Starbucks is an already successful global brand with a consistent following, and more importantly has a market value of $38 billion dollars. This outlandish amount of money gives the company's chief executives some room to take some risks in expansion, and for this case by risk I mean fairly simple decisions.
There is not too much risk I see involved in expanding to the world's largest coffee consumption area. Obviously the market is already there, the only possible issue is that they will not be fond of the American-based company. Ultimately, I do not foresee that being an issue because as Umoe founder stated in the article, the people of the Nordic region are appreciative of American products. I believe this appreciation paired with the steady economy in the Nordic region will allow the Nordic people to be open to engaging in the Starbucks craze which as garnered so much attention worldwide.
In the end, as long as Starbucks follows the Nordic business structure for coffee they will be able to have the same success they have had elsewhere.
There is not too much risk I see involved in expanding to the world's largest coffee consumption area. Obviously the market is already there, the only possible issue is that they will not be fond of the American-based company. Ultimately, I do not foresee that being an issue because as Umoe founder stated in the article, the people of the Nordic region are appreciative of American products. I believe this appreciation paired with the steady economy in the Nordic region will allow the Nordic people to be open to engaging in the Starbucks craze which as garnered so much attention worldwide.
In the end, as long as Starbucks follows the Nordic business structure for coffee they will be able to have the same success they have had elsewhere.
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