Case Analysis

1. Time Context – Date/Time when the problem existed

Currently, Starbucks does not have a facility in Brazil which facilitates the roasting, production
and distribution processes of the Brazilian coffee beans used in every Starbucks coffee. Building
this facility will enable Starbucks to distribute their products across Brazil. However, due to
Brazilian’s perceived notion of committing bribery which Starbucks Company does not tolerate,
there is difficulty in setting up this distribution facility that would clearly improve its distribution
to its retail locations and new local joint ventures.

2. View point – person or group of person who can solve the problem

The management of Starbucks along with their Brazilian counterparts can solve this problem. A
good management set up will help deliver results for the Starbucks Company. Since, Brazilian
government are quite traditional, Starbucks Company must have people more acquainted on
dealing with local representatives.

3. Central Problem – within the case there are major problems – choose only one. Not in question
form.

Brazil is one the leading growers of coffee bean in the world and obviously Starbucks Company
would like to capitalize on that. Starbucks Company will also improve its presence in this part of
region and be enticed to enter in this kind of market. This will allow Starbucks to expand its
mercantile in this part of the region. However, the Brazilian market are so used to drinking
coffee that it is inexpensive and coffee is almost always available at every home. Competing in
such a very strong market will be quite difficult for the Starbucks Company. It has to sell its
brand against these small vendors. Starbucks has to present the Starbucks coffee to the Brazilian
market, who loves coffee. And who has loved coffee since then. Starbucks Company may have
to reintroduce what coffee is like or what is drinking coffee experience is all about to the
Brazilians. There is also a need for Starbucks Company to have a strong presence in Brazil by
being able to offer the Starbucks coffee to every Brazilian. Since, one of Starbucks Company
philosophy is to use locally produce coffee, Starbucks Company must compete against the local
Brazilian market, by having the coffee beans roasted, packed and distributed in Brazilian soil.
This would entice the Brazilian market to drink more Starbucks coffee because they will know
that the coffee they are drinking are locally produced.

4. Objectives
a. MUST – urgent! And adopt the SMART policy. Could answer the problem immediately.

Starbucks Company must be able to create the Starbucks experience in the Brazilian
atmosphere.

Starbucks Company will be able to roast, produce and distribute coffee beans easily in
the Brazilian market.
 Starbucks Company will be able to aid Brazilian coffee farmers in utilizing their products
for every Starbucks coffee.

b. WANT – long run objectives

(Both must and want should start with “To be able”)

Starbucks Company will be able to sustain its presence in the Brazilian market.

Starbucks Company will be able to distribute their brand of coffee to the Brazilian
market.

Starbucks Company will be able to turn Brazilian coffee to Starbucks brand of coffee.

5. Areas of consideration – different factors contributed to the central problem; there are causes of
the problem. Apply the SWOT analysis.

For most people, drinking a Starbucks Coffee is considered a luxury. And one of the strengths of
Starbucks Company is this kind of branding, it is clear that Starbuck’s has been successful in
appealing to all five senses of its customers – through the enticing aroma of the beans, the rich
taste of the coffee, the product displays and attractive artwork adorning the walls, the
contemporary music playing in the background, and even the cozy, clean feel of the tables and
chairs. Starbucks Company is able to turn drinking coffee into a status symbol. However,
Brazilians currently does not appreciate this kind of experience, since, drinking coffee is an
everyday activity to the Brazilians.

One of Starbucks Company weaknesses is that Starbucks Company does need have a facility that
can be used for roasting and distribution processes in Brazil to avoid importing and exporting
associated costs, thereby reducing costs. It will also entice Brazilian coffee bean farmers to
continue producing good quality coffee if Starbucks would be able to use their products. Another
weakness for Starbucks is dealing with a country that is very traditional. Starbucks needs to be
concern with people among the political arena and how the culture of the Brazilians affected their
power to consume such luxurious product. Another weakness is that Starbucks Company does
not exist in Brazilian market. Starbucks has a different branding against its local counterpart and
having said, Starbucks must improve more on enticing the public that their brand of coffee is
comparable to Brazilian’s local drink.

Another issue is how Starbucks Company can find the right people to deliver their products to the
clientele. Creating jobs is good but having to inculcate Starbucks philosophy to the Brazilian
culture is different. Because of their love for their local drinks, their people should also have the
same love for the Starbucks coffee.

However, Starbucks Company can penetrate this kind of market. This is an opportunity to create
Brazilian coffee beans more valuable since Starbucks is a global brand.

6. Alternative courses of action – these are solutions to the problem; at least 3 solutions and above.
With corresponding advantages and disadvantages
 Starbucks Company has almost always created an image that drinking Starbucks coffee is a
privilege. The Brazilians must be able feel for that privilege. Starbucks must recognize Brazilian
coffee beans in their product display. Since, this will entice Brazilian market to be more proud
that their product is being carried by a globally recognized market.

Starbucks Company must have a roasting and distribution facility in Brazil for easier access and
mobilization. Instead of having the coffee beans imported and shipped, the Brazilian market is
already capable of doing it. This will have a high return of investments from the local farmers
although prices of Starbucks coffee remain the same.

Starbucks Company to set up shops in obvious places, such as hotels, airports, ports, business
districts that can easily be recognizable to the local market. Since, Starbucks Company is an
international brand, being situated in these areas will encourage people to drink coffee.

Starbucks Company can facilitate catering to events. This will bring coffee to local market if
they can facilitate events.

7. Recommendation – should be taken from the recommended solution. Should only be one

For Starbucks to have a striking presence in Brazil, they have to be recognizable in the local
market. They have to be actively involved in events such as Football cups. I think this is a better
way to entice the public. And if Starbucks Company has already the roasting and production
facility in Brazil this will be easier. They can move about quickly without having to wait for
imports or exports of coffee beans.

8. Plan of action – different activities to be adopted based on the recommended solution.

Starbucks Company must first seek approval from the local government since they would be
setting up a facility. One of the best ways is to entice the government that Starbucks will be able
to generate jobs to local people and this is a better way to help them. Once the facility is already
in place, Starbucks coffee can move about quickly to Brazil. They can easily produce and set up
shops recognizable in public. They can bring their brand of coffee easier to the public.

Since Starbuck’s goal is to have an enduring and innovative, state of the art integrated supply
chain system that would reduce costs by an undisclosed amount, improve customer service, and
maintain consistent quality. And being able to provide such facility would ease their cost.