Apr 1, 2021 in Analysis

Starbucks in the UAE
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Introduction

Starbucks is the worlds famous coffee company and coffeehouse chain originating from America, Starbucks made its entry in United Arab Emirates in 2000. Since then, the coffee shops have gained significant success, market leadership and customer loyalty. The company has been expanding to various regions of the world. At UAE, the increasing globalization and westernization of the society can be counted as the major contributing factors for the success of Starbucks. This paper opens with the discussion of Starbucks history and then critically evaluates the reasons behind the high level of customer loyalty the company has been able to earn over its stay at UAE.

 

History of Starbucks

United States of America was famous in the early periods of 1970s for consuming the worlds largest coffee in the state. Starbucks, an American coffee company came into being in 1971 in Seattle, Washington. Digging deep into the layers of history, it has been found that three famous friends named as Siegal Zev, Jerry Baldwine and Gordon Bowker laid down the foundation of the coffee company in Washington, USA. Nonetheless, the mission of Starbucks was to found a premier supplier of the finest coffee company in the globe where a persons love for coffee could be answered. The three owners of the coffeehouse offered specialized coffee knowledge, while training its costumers about coffee making in their homes.

After some time, in 1987, Howard Schultz named the company as Starbucks Corporation by bringing a Starbucks franchise. Sequentially, people started loving and enjoying the real love for their coffee and started making their romantic stories at the coffee chain house. It was not difficult for the company to expand its merchandise by building six more coffeehouses in Seattle. At the present, Starbucks coffee company is the leading vendor, roaster and brand of coffee specialty in North America as well in the present world. Around 12,000 companies have been operating and licensed in various location of the world. These include: Latin America, Europe, Asia pacific, North America, and Middle East.

Expansion into Middle East

In 1999, the famous Starbucks coffee corporation was expanded to Middle East. Soon it started to expand more on the landmarks of Middle East by signing an agreement with Alshaya group, a family business of Kuwait. Around 230 stores got built in different places of Middle East that includes Lebanon, Qatar, Saudi Arabia, Jordon and UAE. Moreover, in 2000, Howard Schultz introduced a new categories of coffee knows as fair trade selections and organic trade selections. The stores of new categories entered to Qatar, Saudi Arabia and United Arab Emirates.

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Globalization at UAE and Starbucks

Starbucks in UAE has reached to the top of its sales through its creativity and customer satisfaction. Recently, globalization and westernization of society has been a trend at UAE. People are no longer associated with their historical trends but are switching their preferences according to the western society. This is one of the major reasons due to which the people have been reducing the consumption of traditional beverages such as black tea, and the western beverages such as coffee and cold drinks have been preferred.

The locals as well as the tourists arriving UAE are the major consumers of the coffee. UAE has clearly been one of the favorite tourist destination and in 2015, an impressive increase of inbound tourism was noted by Euromonitor. Similarly, the number of expatriate workers has also been increasing in the country. Therefore, while socializing with international tourist or colleagues, the locals have gradually shifted their beverage preferences towards coffee instead of black tea. This is the reason why UAE stands for the fastest growing coffee market in the globe. According to the international coffee organization, around 3.5 kg of coffee per year has been consumed by the UAEs population. With the changing culture, coffee has become an essential and integral part of the culture of UAE and Middle East. Coffee in UAE has been used a symbol to welcome their guests at their homes, parties, meeting, gatherings and in restaurants. Many restaurants of Dubai have started to welcome their guests with Arabic coffee which exemplifies their culture as a way of binding their customers and a symbol for hospitality.

Before entering the UAE market, Starbucks must have observed the changing cultural requirements and trends of the UAE. The company has been striving to meet the consumer expectations through customizing its products. The target customers for the Starbucks not only include the tourists and the international employees but also the locals which have slowly become the major source for the coffeehouse chain to generate business at UAE. The coffee stores remained open on local holidays and common festivals as to provide maximum service to their regular customers. This plays a role for the company to attract the customers which are on outings to enjoy weekend or other festives.

 
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Other Social Efforts of Starbucks

In addition to globalization, Starbucks has been trying to adapt to the cultural environment at UAE. For example, Arabs have strong affiliation to music and the country has a long and strong heritage of music where songs were played during historic battles, milestones and regular tasks. At Starbucks, music is played where the customers can enjoy music while drinking their coffee. The music played has variety in its own ranging from traditional to modern music. The joy of music enhances customers to stay for a long and to enjoy their real for coffee with their loved ones.

The company has also been making strong efforts for advertisements; for example, the famous coffee mugs and travel locator cards with Starbucks logos have been the heart of its creativity. Besides that, Famous CDs and gifts cards are readily available at the store having Starbucks advertisement and marketing in it. Moreover, loyalty punch cards have been created to spread the sense of loyalty of Starbucks into the heart of its customers.

Conclusion

This paper shed light on the success of Starbucks at UAE. The company has its origin in America but is carefully expanded over the past 2 decades in various regions of the world. Starbucks has been involved in active research about the changing consumer preferences and cultural settings and then made its entry into the market of UAE. At UAE, due to the increasing number of tourist & international workers as well as the westernization of society, the preferences of the locals have been changing. People now prefer drinking coffee over their traditional beverage black tea. In addition, the company has also been taking all the possible measure to customize its products and offer the environment which is feasible and attractive for the customers at UAE. For example, music is played in the coffeehouses to offer relaxation to the customers. The company involves in active advertising strategies and the coffeehouses remain open on holidays to facilitate the customers. In short, the globalization at UAE and the strategic & creative strategies of Starbucks are responsible for the enormous success of the company at UAE.

 

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