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Case Study Print version essay is available for you! You can search Free Term Papers and Co llege Essay Examples written by students!. Join and get instant access to Starbucks Case Study and over 30,000 other Papers and Essays Category: Miscellaneous Autor: anton 02 June 2011 Words: 1561 Pages: 7 #1) Identify the controllable and uncontrollable elements that Starbucks has enc ountered in entering global markets: The controllable factors that Starbucks has encountered entering the global mark et are similar to those in their domestic market. These factors include product, price, place and promotion. The Starbuck's name and image connect with millions of consumers around the globe. Internally, Starbuck's is able to make adjustmen ts to fit a county's cultural tastes and expectations regarding their product, i t's price, where it is available and how it is marketed. Starbuck's is also able to take part in market research to be sure their product has the right fit for each of its international locations. According to the company's website, they ma intain a high level of success internationally by choosing international partner s who share their values and commitment to bringing the Starbuck's experience to customers worldwide. The controllable elements can be altered in the long run a nd, usually, in the short run to adjust to changing market conditions, consumer tastes, and corporate objectives. The uncontrollable factors that they have encountered have been tougher yet, acc ording to the article. The French appear to be ready for Starbuck's, however; wi ll Starbuck's be able to maintain profitability with what is considered France's arcane regulations and generous labor benefits? In Italy, there is will be grea ter competition with local coffee houses. Italian coffee bars prosper by serving food as well as coffee (an area where Starbuck's still struggles). Italian coff ee is also less expensive than U.S. coffee and is also considered by locals to b e superior. Another uncontrollable element is a nation's economy. At the writing of this article, Japan had been experiencing a depressed economy and Starbuck's Japan profits were down 14%. Competition is another factor. In England, for exa mple, imitators are popping up left and right to steal market share. Profits at Starbuck's Coffee Japan fell 70% because of growing competition from rival coffe e chains. Tensions between opposing counties is also an obstacle. Starbuck's has locations in Israel as well as in Palestinian outlets in Kuwait, Lebanon, Oman, Qatar and Saudi Arabia. As tensions mount in these areas, Starbuck's position m ust be to remain neutral or they could lose market share from either side. These are considered extreme cultural challenges and Starbuck's will have to be incre asingly sensitive to such challenges to maintain market share. Moreover, a succe ssful strategy in one country can be rendered ineffective in another by differen ces in political climate, stages of economical development, level of technology, or other cultural variation. #2) What are the major sources of risk facing the company and discuss potential solutions. One major risk that I feel faces Starbuck's is its ability to maintain profitabi lity with opening such a large number of stores in such close proximity to each other. According to the

Page 2 article, "Starbuck's is at a defining point in its growth. Its reaching a level that makes it harder and harder to grow, just due to the law of large numbers." Even Starbucks admits that while its practice of blanketing an area with stores, helps achieve market dominance, it can cut sales at existing outlets. Starbucks has also continued this practice internationally. This may be more detrimental overseas because most stores are operated with a local partner and this dramatic ally reduces the company's share of profits. Starbuck's may want to consider slo wing this expansion in order to maintain profitability. Another risk facing Star buck's on an international level is the large number of "copy-cat" businesses po pping up in every international market. In order to maintain market share, Starb ucks will have to continue to prove to be a superior establishment with a superi or product. It does appear that Starbuck's chooses wisely when selecting foreign partners and this also appears to be a strong advantage for the company. They n eed to continue their activism in environmental issues and concern for what affe cts their international partners. Another risk facing the company is that of poo r corporate image, or one that has "Pac-Man" type qualities, looking to gobble u p market share on both the national and international front and leaving no room for the competition. The mere appearance of global domination may be a turn off to consumers at home and abroad. This has already appeared to hold true in the U .S. Again, according to the article, the company faces an ominously hostile rece ption from its future consumers of Generation X. Not only are the activists amon g them turned off by the power and image of Starbuck's, they simply feel that th e company's pricing is way out of line. Starbuck's may find it in their best int erest to appeal to the up and coming generation by considering a pricing restruc ture and finding a way to make the stores appeal to this younger generation. The se will be future consumers as well as the future of their market share and prof itability. This has not yet become an issue internationally, where to the younge r generation Starbuck's is still considered to be "very cool". However, market r esearch shows that the younger generations do not like to feel as though they ar e being "sold to". They like to feel as though the concept was their idea and th ey chose to purchase a particular item because it is the thing to do. Starbuck's needs to make them think that choosing the Starbuck's brand is "the thing to do ". Other uncontrollable risks to Starbuck's include both an unpredictable commod ities market as well as an unpredictable global economic climate. #3) Critique Starbuck's overall corporate strategy: After visiting it is apparent that the company's vision is to establish Starbuck's as the most recognized and respected brand in the world. It is apparent that their corporate strategy is to obtain market dominance on both a national and international front. First the vision is built on a foundation o f the organizations core values. Starbucks only uses the finest coffee beans whe n brewing its variety of blends and therefore wants to be looked at with the res pect of a company that uses and provides the best. Secondly, the company desires a top of the mind recognition. Starbucks not only wants consumers to remember w ho it is, but think about Starbucks first. The mission of Starbucks is to establ ish Starbucks as the premier purveyor of the finest coffee in the world while ma intaining our uncompromising principles while we grow. None of this success woul d have been possible without a set of goals that the company aimed to achieve an d a set of principles, which governed the decision making process. Starbuck's hu mble beginnings were that of a privately owned company. Today, Starbuck's is a Page 3 global corporation with thousands of stores located in the United States and abr oad. Starbuck's has made their product an uplifting component to people's lives. Starbuck's corporate strategy seems to be working more than well. Starbuck's re putation precedes itself. It has shown to be successful in every market penetrat

ion it has attempted. It is clear that Starbuck's has maintained the ability to stay on top as far as competitive advantage is concerned. They have followed the ir vision and their mission and have for the most part have been able to maintai n a clean image of a corporation that not only cares about its customer's and th eir communities, but also for its employees. They have had hiccups in the road c oncerning their employees, but for the most part; offer their part-time employee s benefits that other corporations do not even consider. #4) How might Starbuck's improve profitability in Japan? According to the article, Starbuck's has had its ups and downs in Japan, but has been doing well overall. I feel that Starbuck's should continue its current tre nd of renovating stores and improving customer service. Starbuck's may want to a ppeal to Japan's younger generation, again, seeing them as their future customer s. Japan appears to be very receptive to the Starbuck's name and image. Starbuck 's clearly has competition in the Japanese market and should continue to stay in front of the pack by conducting market research. According to an article found at, one of Starbuck's main competitors in Japan is Doutor's. Wh en asked what the secret has been this time, Doutor's managing director points o ut two of his company's approaches. The first is, once again, the expert reading of Japanese tastes. "Starbucks is a good concept, but Japanese people want to e at proper food and smoke," he says. "Plus, by having the shops a bit brighter, p eople think of Excelsior as a great place to go on a date. It doesn't look so se edy." Starbuck's should take this information and run with it. While renovating, Starbuck's should consider something as simple as better lighting and a smoking area. They may also want to consider a variety of different food offerings as D outer's touts superior food. With its highly priced coffees and specialty brands , Starbucks persuaded the Japanese and almost everyone else in the world that th ere was a hidden benefit to paying inordinately exorbitant fees for a cup of cof fee. Overnight, premium coffee regained its pricing power as the same old beans suddenly took on a new air of mystery and sophistication. It is clear that the J apanese competition has learned and taken from the Starbuck's business model. I feel that Starbuck's needs to do a little borrowing of its own to improve market share and profitability in Japan. Read Full Essay