Starbucks` International Operations
This report is compiled in response to your request to work out the best solution for Starbucks` international operations. It examines the necessary actions which have to be taken in order to increase revenues and expand more efficiently in foreign markets. On that basis, recommendations as to particular approaches are made. In recent years, Starbucks has been experiencing increasing losses in numerous countries worldwide and losing ground to its foreign competitors. Therefore, one of the changes Starbucks has to make, is to improve its overall image worldwide. Howard Schultz` statements on his political views and the fact that Starbucks is an American company, given the current political tensions in some parts of the world, are negatively affecting the success of the company. A spokesperson should be hired to hold press conferences and emphasize the fact that Starbucks is not an American company, but rather an international one with a worldwide presence, not sharing the believes of its shareholders nor supporting any political connections. Furthermore, Fair-trade certified products should be introduced and coffee promoted as higher quality. These actions could improve the company image and attract more customers to the coffee shops. The company should also reconsider its entry strategies, taking all the risks into consideration, especially the political risk in various countries, that has jeopardized the company`s activity in the last years. Given the specific local circumstances and if affordable, wholly-owned subsidiaries should be considered. In this way, the company would have more control over the operational costs. A local consulting agency with international experience could help set up the business. If in some countries this solution should be too risky, franchising is another way to go, as the franchisee has to meet all of the company`s standards. Moreover, loss making stores should not be close down, as it would...
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