CynthiaPurekal,2008S.doc.docVIP

Starbucks’ Entry into Eastern Europe Lithuania, Latvia, and Estonia Monika Siulyte Cynthia Purekal April 23, 2008EXECUTIVE SUMMARY Starbucks Corporation is known throughout the world for its exceptional coffee products, and is generally considered to have revolutionized the coffee business. With origins in Seattle, Washington, it eventually became the most widely patronized coffee chain throughout the country. And it has expanded its business across national borders. It currently operates on five continents, in nearly thirty countries. Starbucks has so far limited its European expansion to Western European countries. Its stores can currently be found in Turkey, Spain, Greece, France, Germany, the United Kingdom, and Switzerland. While these have most likely been safe countries for Starbucks to operate in, they have failed to tap into another area of Europe that has great potential for the coffee market, namely, Eastern Europe. Although it has recently opened locations in the Czech Republic, Starbucks has thus far avoided the Baltic States, perhaps preferring to remain in more “western” nations. However, in so doing, Starbucks has neglected a region that is rapidly becoming increasingly westernized. It would be in Starbucks best interest to explore the markets of Lithuania, Latvia, and Estonia. Lithuania, Latvia, and Estonia were all forcibly annexed by the USSR in 1940. All three endured Soviet rule for over 60 years. Once they achieved independence in 1991, after the fall of the Soviet Union, they all seemed eager to form alliances with western countries. For example, Lithuania, Latvia, and Estonia are all now members of both NATO and the European Union. It is not surprising, therefore, that the coffee chain trend would become popular in these countries. Furthermore, citizens of all three companies have enjoyed a stable market economy in recent years, and have disposable income that would allow them to purchase Starbucks products. It is true that Starbucks has te