Int'L Marketing Starbucks Essay
1) Starbucks is one of the well-known brands worldwide, and it can be for sure compared to companies such as Microsoft, IBM, etc. It has succeeded to expand from a normal coffee shop owned by Howard Scultz, to a global brand that is recognized by millions of consumers. Even if it has had a tremendous success, we can however identify some controllable as well as uncontrollable elements that were present as Starbucks was attempting to enter the global markets.
Starting with the controllable elements, they are quite easy to identify, as they refer to the four P’s: Product, Price, Place and Promotion. Why is this? We need to be aware of the fact that Starbucks has full control over the type of product that it wants to sell, over the price that is imposed on the product, on the choice regarding the place in which the product can be sold and on the promotion strategy adopted. That being said, we will concentrate on one element, on Price, as it seems to be the most evident controllable element. For instance, the coffee sold in Italy has a lower price then the one sold by Starbucks. Americans pay $1.50 for an espresso; by contrast, in northern Italy, an espresso costs only 67 cents. Obviously, the price difference can create problems for Starbucks when it comes to entering this market. In order to have profit in this area, Starbucks would need to set a price than is able to compete with the low prices of the domestic country.
Moving on, we will identify the uncontrollable elements faced by Starbuck’s when entering the global markets. Firstly, we will mention competition, which can be a solid barrier in some situations, when entering a market. For example, in England, many “imitators are popping up left and right to steal market share” (Case 1-1). Another example refers to Starbucks lookalikes found in Japan. Next, Even if the French seem to be prepared to receive Starbucks, a problem could appear; will Starbucks have the desired profitability taking into account
Starting with the controllable elements, they are quite easy to identify, as they refer to the four P’s: Product, Price, Place and Promotion. Why is this? We need to be aware of the fact that Starbucks has full control over the type of product that it wants to sell, over the price that is imposed on the product, on the choice regarding the place in which the product can be sold and on the promotion strategy adopted. That being said, we will concentrate on one element, on Price, as it seems to be the most evident controllable element. For instance, the coffee sold in Italy has a lower price then the one sold by Starbucks. Americans pay $1.50 for an espresso; by contrast, in northern Italy, an espresso costs only 67 cents. Obviously, the price difference can create problems for Starbucks when it comes to entering this market. In order to have profit in this area, Starbucks would need to set a price than is able to compete with the low prices of the domestic country.
Moving on, we will identify the uncontrollable elements faced by Starbuck’s when entering the global markets. Firstly, we will mention competition, which can be a solid barrier in some situations, when entering a market. For example, in England, many “imitators are popping up left and right to steal market share” (Case 1-1). Another example refers to Starbucks lookalikes found in Japan. Next, Even if the French seem to be prepared to receive Starbucks, a problem could appear; will Starbucks have the desired profitability taking into account
References: Case 1-1: Starbucks-Going Global Fast