Group I Presentation

Alag, Antipolo, Arcayos, Bacalangco,

Kenneth Mae Justine Mae Shem Marie Rachel Joy

Bacalso, Bongado, Borang, Burgos,

Jellian Claudine Princess Joy Edryl Jay
CASE STUDY: STARBUCKS— Going
Global Fast
I. Rationale/Background of the Case
Starbucks is one of the world's largest coffee shop chains. Throughout the litigation with Starbucks Corporation, a
number of issues arise. Starbucks Coffee has locations all over the world, and there are many diverse perspectives on this
scenario. The company has a one-of-a-kind selection of coffee, lattes, espressos, and cafe drinks. The company set out to
address a specific demographic, but it has now expanded into a variety of markets and is fast expanding. Starbucks has made
extensive use of the "youth appeal" strategy in order to break into new areas. However, such enthusiasm cannot be relied upon
indefinitely; other tactics are always being developed. Starbucks has built a good brand reputation over time and has a
globally recognized company emblem. When Starbucks entered worldwide markets, it confronted a number of distinguishable
controllable and uncontrolled elements. The aims of any company's strategies are critical to its success. Starbucks, like
McDonald's, has been ejected from this market in recent years. Starbucks has aligned its branding with the behaviors that may
be found at any Starbucks worldwide. They have a strong company vision that they adhere to, which benefits their brand
image. Starbucks' image has been established not simply as a result of this, but also as a result of their ability to give honest,
high-quality service. Starbucks has built a good brand reputation over time and has a globally recognized company emblem.
When Starbucks entered worldwide markets, it confronted a number of distinguishable controllable and uncontrolled
elements. The aims of any company's strategies are critical to its success. Starbucks, like McDonald's, has been ejected from
this market in recent years. Starbucks has aligned its branding with the behaviors that may be found at any Starbucks
worldwide. They have a strong company vision that they adhere to, which benefits their brand image. Starbucks' image has
been established not simply as a result of this, but also as a result of their ability to give honest, high-quality service. In recent
years there was a time that Starbucks saw the opportunity to go global and jumped on it.
II. Time Context

 1999-2009
III. Viewpoint

Chief Executive Officer (CEO)

IV. Statement of the Problem

What strategy should Starbucks use to resolve their inefficient and ineffective
strategic business operations?
V. Statement of Objectives

1. To lessen complaints and negative feedbacks.

2. To ensure the success of global expansion.
3. To maintain their reputation as one of the fastest growing brands.
VI. Areas of Consideration (SWOT ANALYSIS)

STRENGTHS
 One of the fastest growing brands
 Sophisticated store ambiance
 Optimization of operations with the use of modern technologies
 High Quality of Products
 It has many stores worldwide
 Globally recognize
 Highly innovative
 Successfully developed a broader menu for its stores
 Audaciously taking of risk in apply new strategies
 Lowest employee turnover
V. Areas of Consideration (SWOT ANALYSIS)

WEAKNESSES
 Sells expensive coffees
 Makes less money overseas
 Some people feel unwanted and unwelcome in the stores
 Faces slumping morale and employee burnout
 Dissatisfaction from its employees
 Sued for not paying legally mandated overtime
 Employees are feeling overworked and underappreciated
 Sales instability
V. Areas of Consideration (SWOT ANALYSIS)

OPPORTUNITIES
 Expansion to other Foreign Market
 Attracting the next generation to be its customer
 Attracts younger crowds
 Technological advances
 Attracts investors
 Establishing customer loyalty over foreign countries
V. Areas of Consideration (SWOT ANALYSIS)

THREATS
 Global expansion possesses huge risks
 Faces an ominously hostile reception from future consumers
 Face large competition from large US competitors
 A lot of imitators to steal market share
 Cultural challenges to other country
 Changes in Consumer tastes and lifestyle choices
 Market oversaturation will incur decline of demand and low profitability
 High possibility of bankruptcy
VII. Alternative Courses of Action

1. Utilizing the transnational strategy to maximize its efficiency and effectivity as a key
solution to the problem.
2. Resolving the failures of operational approaches using multidomestic strategy.
3. Applying the global strategy to remedy Starbucks’ shortfall.
VII.List of Advantages and Disadvantages

ACA#1 Utilizing the transnational strategy to maximize its efficiency and effectivity as a key solution to the
problem.
Advantages:
 This strategy amplifies resources to get both global efficiency and local responsiveness to come up with
concrete and exact solution to its multiple operational problems.
 Less costly but maximizes sales as it utilizes both global and multidomestic strategies.
 More effective and efficient to apply as it uses the best-chosen outline of solution of both multidomestic and
global strategies.
Disadvantages:
 Needs significant time and difficult to execute as it requires fulfilling the dual goals of flexibility and
coordination and firms must balance opposing local and global goals.
VII.List of Advantages and Disadvantages

ACA#2 Resolving the failures of operational approaches using multidomestic strategy.

Advantages:
 Maximizes local responsiveness by giving decentralizing decision-making so they can create products and services
optimize to their local markets.
 The firm can customize its products to meet the specific preferences and needs of local customers
 The firm can compete more effectively in each local market and increase its local market share.
Disadvantages:
 This strategy faces more uncertainty because of the tailored strategies in different countries.
 Pursuing different strategies in different locations, cannot take advantage of economies of scale that could help decrease the
Starbucks cost.
 This strategy performs a greater financial risk
 It takes time and money to research new market and gain insight into the local needs and wants of those consumers.
VII.List of Advantages and Disadvantages

ACA#3 Applying the global strategy to remedy Starbucks’ shortfall.

Advantages:
 Under this strategy, products are much more likely to be standardized rather than tailored to local markets.
 This strategy emphasizes economies of scale and offer greater opportunities to utilize the developed innovations.
Disadvantages:
 Centralizing global efficiency by means of standardizing products rather than tailored to certain countries means limiting
the demands of customers to what only rendered by the company.
 Managing from one central office could be mean of lacking in oversighting and losing of control to what certain solution
needs by a certain country.
 Foreign culture challenges are inevitable in the international business.
 A globalization strategy inevitably shifts the primary working force to low-cost labor nations.
VIII. Recommendation

Upon weighing the advantages and disadvantages of each alternative courses of action, we highly recommend
ACA1 as the best solution to address the main problem because through utilizing the transnational strategy, it is
effective and efficient to apply as it uses the best-chosen outline of solution of both multidomestic and global
strategies. Starbucks will able to come up with concrete and exact solution that will allow them to use their
innovative ideas to offer customized and uniform product to meet the different preferences and needs of customers
without using huge resources like the other strategy but maximizes the potential sales the company will earn at the
same time maximizes the local responsiveness and global efficiency. Even though it requires significant time and
difficult to execute as it requires fulfilling the dual goals of flexibility and coordination since firms must balance
opposing local and global goals but this will definitely maximize Starbucks’ sales and to perform an efficient and
effective strategic business operations as it utilizes combination of global and multidomestic strategies.
VIII. Implementation (Action Plan)

Actions Undertaken Person’s Responsible Timeframe Estimated Budget

Board Meeting for the
Utilization of CEO 1 month Organizational Budget
Transnational Strategy

Finalization of Plans in
CEO 3-6 months Organizational Budget
the Meeting

Applying the
Officers in-charge 3-5 years Organizational Budget
Transnational Strategy

Monitor and Review Officers in-charge Quarterly Organizational Budget

Thank you 