Growing Big While Staying Small

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A.
  CASE
 ANALYSIS
 
 
  “Growing
 Big
 while
 Staying
 Small:
 Starbucks
 Harvests
 International
 Growth”
 
  by
 IAN
 E
 NIS
 TIRYAKI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  DATE
 
 
 
  April
 28,
 2011
 Thursday
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 A.
 EXECUTIVE
 SUMMARY
 
1. Situation
 Overview
  Globally
 recognized
 coffee
 house
 and
 coffee
 brand
 Starbucks
 has
 changed
 its
 targeted
  markets
 more
 towards
 the
 international
 arena.
 The
 need
 for
 global
 strategy
 is
 outlined
 by
 the
  fact
  that
  companies
  are
  subject
  to
  global
  forces
  and
  consumer
  demands.
  As
  a
  consequence,
  firms
 are
 faced
 with
 a
 challenge
 of
 modifying
 their
 existent
 strategies
 to
 gain
 and
 sustain
 their
  competitive
  advantage
  in
  a
  rapidly
  changing
  environment.
  The
  main
  reason
  behind
  this
  rapid
  expansion
  plan
  is
  to
  compensate
  for
  the
  losses
  in
  the
  U.S.
  Moreover
  the
  company
  is
  finding
  difficulties
  in
  international
  market
  to
  create
  a
  cultural
  connection
  with
  the
  host
  countries.
  Certain
 locations,
 Starbucks
 has
 failed
 to
 create
 the
 bond
 and
 therefore
 now
 they
 are
 trying
 to
  reassess
 their
 business
 strategy.
 
  2. Key
 Problems
 
  Throughout
 the
 case
 study,
 there
 had
 been
 problems
 faced
 by
 Starbucks.
 Some
 of
  these
 problems
 have
 taken
 importance
 of
 company’s
 growth
 goals.
 The
 key
 problems
 faced
  within
 the
 case
 is
 given
 below:
  • • • • Inadequate
 global
 business
 strategy
  Offered
 product
 redundancy
 
  Competitive
 disadvantage
  Imitations,
 &
 Law
 suits
 
  3. Recommendations
  i. Recommendations
 made
 towards
 generating
 better
 market
 needs
 assessment
 for
  the
 abroad
 expansions.
 
  ii. Strategic
 alliance
 protocol
 to
 be
 expanded
 with
 more
 channels
 of
 distribution.
 
  iii. Reorganizing
 brand
 equity
 
  iv. Focusing
 on
 being
 number
 1
 in
 coffee
 industry,
 eliminate
 the
 unrelated
 products.
 
 
 

B. ANALYSIS
 
The
  company
  is
  experiencing
  the
  decline
  in
  sales
  in
  the
  same
  stores
  within
  its
  U.S.
  branches.
 
  Recently
 adopted
 
 “Starbucks
 Everywhere”
 approach
 created
 maturity
 of
 the
 brand
 within
 the
  U.S.
  market,
  whereas
  more
  competitors
  shared
  bigger
  percentages
  of
  market
  share.
  Therefore,
  the
  company
  has
  been
  in
  direction
  of
  shrinking
  down
  its
  locations
  within
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