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STARBUCKS IN ALBANIAGentjan ULAJ

Burak ERDEM

Burak GONUL

Merve KAYASOKEN

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STARBUCKS BRIEF STORY

Starbucks is I coffee shop that is operating since 1971.

It is the largest coffee shop chain in all around the world and it operate in 64 country and has more than 21.536 coffee shops.

Country of origin is USA and there are 12.218 coffee shop which mean the largest number for a state.

China is following USA with 1716 branches and Canada with 1303 branches that complete Top 3 of Starbucks country.

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STARBUCKS COFFEE SHOP

Starbucks In USA Starbucks In China

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STARBUCKS PRODUCTS

Starbucks is a company that serve products are hot and cold beverages but their main product is coffee and its derivate.

In Starbucks you also can find variety of tea, sandwiches, sweets, ice-creams, pastries, snacks and similar product.

In same countries you also can find beers, wine, appetizers and different variety of cocktails.

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STARBUCKS PRODUCTS

Coffee and beer Sandwiches and Milkshakes

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ALBANIA

Albania is a country that is located in Southeast part of Europe and is bordered with Montenegro, Kosovo, Republic of Macedonia and Greece. It has a coast on the Adriatic and Ion sea and through Strait of Otranto can be connected with Italy.

Population of Albania is 2,821,977 and 1 out of 3 Albanians live in capital city Tirana.

Area that this country cover is 28,748 km2

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ALBANIA IN PICTURE

Albanian political map Capital City of Albania, Tirana

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STARBUCKS AND ALBANIA

The reason that we have decided to do this project is that there is not a Starbucks coffee in Albania.

Another reason is that the strong relation that Albanian citizens have with coffee.

Also for Starbucks can be a good opportunity to open a pilot project in Albania and then to expand it in Balkan.

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POLITICAL ENVIRONMENT IN ALBANIA

Albania is a country that have tried different political systems during years. After becoming independed from Ottoman Empire in 1912, Albania tried to applicate kingdom political system and different kings were doing politic of Albania. After WW2 the political system that were used become Social Republic of Albania and communist system was applied.

This bad period last from 1945-1990. After that democracy is the system that

Albania is still using.

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POLITICAL ENVIRONMENT IN ALBANIA

During the period after 1990 until now we can say that Albania have a stable political development. There is not any politically-motivated violence demonstrated in Albania.

The only case that had violence is in 1997 when Albania had a civil war for 2-3 weeks.

This stability doesn’t mean that democracy in Albania is highly developed or similar predictions

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POLITICAL-LEGAL ENVIRONMENT IN ALBANIA

Transparency is a negative indicator in Albania. Economy is 33% informal.

Corruption is another bad indicator for FDI in Albania

According to Transparency International, Albania is ranked in CPI with 33 points out of 100 and it is 110th state out of 176

Albania is a country part of WTO and have a lot of PTA

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POLITICAL-LEGAL ENVIRONMENT IN ALBANIA

FDI are not discriminated from government of Albania.

For every FDI that invest more than 500,000 euro in Albania there is not tax for profit in first 5 years.

After that taxes for beverages is 7% and taxes on profit is 15% for big companies.

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ALBANIAN LEADERS DURING DIFFERENT PERIOD OF TIME

Ismail Qemali, Ahmet Zogu

Enver Hoxha, Sali Berisha, Edi Rama

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ECONOMIC ENVIRONMENT

Albania after communist period is having a tendency of increasing every year in its economy.

The biggest increase was from 2003-2008 with 7-9% every year.

After the recesion that was happening in Europe and USA, it affected also Albania.

In 2009-2014 economy is also increasing but with a smaller percentage that is 1.3%-3.8%

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ECONOMIC ENVIRONMENT

For 2015 year, predictions of IMF is that Albania will have an increase of 3%-3.8%.

For period 2016-2020 it predicted that will be 3.8%-5%.

Unemployment is calculated to be 12%-14% for this year and with tendency to be decreasing year by year.

Albanian official currency is LEK and we can say that is a stable currency with no too much changes.

In 2009, 1 euro was exchanged with 131.4 LEK and nowadays is 140.1 LEK

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ECONOMIC ENVIRONMENT

Inflation is an indicator that in Albania doesn’t change too much also. It varies from 1.8% that is last year and the smallest, to 3.5% that was obtained in 2010 that was record for country.

GDP of Albania last year was $32,359 billion and GDP per capita is $11,700, that makes possible to rank Albania in upper-middle-income countries.

Purchasing power is only indicator that have reached negative values during this 25 years.

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ECONOMIC ENVIRONMENT

The biggest decrease was registered in 2006 which was (4.51%) and highest increase was 3 years ago with 3.3%.

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CULTURAL ENVIRONMENT

We know that culture is sum of values, beliefs, standards, language, thinking patterns, behaviors, and communication style of a society or group of people.

Also before we analyse culture environment we have to mention again that Starbucks is a company that operates in 64 states and it didn’t find to much problems with their main standartilization strategy or adopting strategy when it is needed.

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CULTURAL ENVIRONMENT

Albania is a country that don’t have difficultly to do a good mix of modern culture with traditional one, or global culture with their local culture.

Albania is a country that coffee consumption is in high rate and that’s will make as feel comfortable with their coffee culture.

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COMPETITION

Competition is very important for every company that wants to enter in a new market or to add a product-line in market.

Market of coffee shops in Albania doesn’t exist like a concept. There are a lot of bars and similar shops but not a specific coffee-shop.

In Albania also is another thing characteristic and comic, because there is not a well-known chian of bars or similar stuff.

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COMPETITION

This components will differ us from other local bars that are operating in Albania

Creating a coffee shop and also a chain of coffee shops will be our strongest point.

Also offering different variety of coffee and its derivate will good quality and well-knowed brand will help us a lot to beat even not direct competitors.

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DEMAND ESTIMATION

Demand estimation is another important factor to enter in one market. If market doesn’t need our product, or if we will not have too much demand, its analogical to enter in a market.

Since Albania is a small country we have to focus just in big cities and do geographic segmentation.

The biggest cities in Albania are: Tiran, Shkoder, Durres, Elbasan and Vlore.

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DEMAND ESTIMATION

If we look all these cities they have same characteristics.

Tirana is capital city and its population is around 1 million.

Durres and Vlora are cities with beach and overfrequented during the summer.

Shkoder and Elbasan are antique cities with wild cultural places to visit from toursits.

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DEMAND ESTIMATION

Another segmentation that we should do is demographic factor according income.

Since these are top-5 cities in Albania means that even the biggest part of economy is located in these cities, and we can easily say that peoples which live in these cities are richer than in another cities.

Also we can segment our costumers through their age.

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DEMAND ESTIMATION

Population of Albania is formed 19.2% by agegrop 15-24 and 40% of people are 25-54 years old.

The reason that we mention that is that we will serve our product to citizens that want to have a short coffee before they go to school or work.

Also they can take by themselves. Another important factor is that they can

study or work in our coffee-shops during the coffee relax.

Demand for each branch predicted to be is 250-400 coffee and similar product in day.

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MARKET ENTRIES

Since Starbucks is defined as a global company it gives us opportunity to see which of market entries ways can be useful and successful for us.

When we see market entries of Starbucks we can easily observe that Licensing and Joint-Venture.

According to information that we have give above, for our opinion is better to select licensing as market entry for Starbucks in Albania.

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MARKET ENTRIES

There are same reasons that we think so and will be listed belove :

First of all, because licensing is a good way to avoid barriers and do not deal with big corruption in Albania.

Second reason is that helps us to be more flexible with costumers needs and preferences

Another reason can be that, as we said before, mainly entrepreneurs in Albania owns their own shops and big companies do not wants to invest in order to create their chain coffee shop.

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MA

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As we can easily see in this picture, the most selected way to enter in a market is Joint-venture and Licensing.

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PRODUCTS

As we said Starbucks specializes in coffee and related beverages. The company sells coffee, Italian-style espresso beverages, cold blended beverages, as well as a selection of premium teas. In addition, the firm also sells coffee-related accessories and equipment.

An espresso is a strong, black coffee that is brewed by forcing hot water through coffee grounds. It’s more concentrated, has more caffeine than regular.

A Starbucks Coffee Frappuccino is Starbucks coffee, milk and blended with ice.

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PRODUCTS

A Starbucks Latte is Espresso with steamed milk and foam.

A Caramel Macchiatto is a vanilla latte with less vanilla, extra foam and a caramel sauce on top.

A Starbucks Cappuccino is similar to a latte but with more foam.

Starbucks Mocha is an espresso, steamed milk and chocolate with whipped cream on top.

Different tea and ice tea variety Ice-creams Sandwiches Sweets Different size of Starbucks glasses

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PRODUCTS

The strategy that we should use for our product and communication strategy is dual extension when product remain the same and strategy also.

This is most used strategy from Starbucks in all countries that they operate.

It will not require too much work for us to make our brand famous, since everybody knows about Starbucks and its products.

Our main duty will be to inform people that Starbucks is operating in Albania also.

Packaging of our product will be mainly in plastic glasses.

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PROMOTION

Promoting will be our most important P of marketing mix.

There are different ways to promote our company and our products.

Since our communication strategy will remain the same we must select best ways for promotion.

TV is a good and the best option to make people aware for our company and our products.

Social media, as in every business is most fashion media used, and also our website.

Newspapers and radio can be our alternative options for promotion.

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PROMOTION

According PR, we should do catalogs and small brochures in order to inform people that Starbucks is operating in Albania and give them information about us.

Sales promotion is another way to promote Starbucks in Albania. Coupons and similar staff can be attractive for our costumers and new costumers.

Starbucks have a specially that differs from others, that don’t spend to much money in advertisement but tries to increase costumer satisfaction and increase word-by-mouth promotion.

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PRICE

Usatoday.com is a well-known magazine that offers us information about Starbucks coffee costs. It is calculated that cost of coffee and its components for a Grande Latte is $0.11-$0.13 and with milk and other cost like plastic glass and manufacturing overhead cost I reach the level of $0.35-$0.40 for a single cup.

In Albania we can say that manufactoring overhead will be less than in USA and developed countries since wages, rent, bill and similar cost are cheaper.

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PRICE

When we do pricing calculation for Albanian we have to know 2 important things.

Fist of all a normal price of coffee in Albania is around $0.8-$1 and the second one is that Starbucks is almost everywhere more expensive than normal coffees.

Our pricing objective is ROI and positioning since our coffee will have more expensive price then others.

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PRICE

The price strategy that we will use in Albania is extension or Ethnocentric

The reason is that Starbucks is global company that use standard prices or similar prices everywhere around the world so we will not change this strategy.

The price of product the we mentioned before (Grand latte) will be $1.85-$2.10 and tall latte will be $1.55-$1.70.

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PLACE

Place will be another strategic and critical decision for our successful business.

Its important to select places that are most suitable for our company.

Distribution will be made directly to costumers through our retail stores or retail partners.

Location we will select places with high population and famous places in every city.

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THANK YOU FOR YOUR ATTENTION