Case 1-1 Starbucks – Going Global Fast
Sept. 23, 2012
Question#1 - Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
The controllable elements of marketing decisions for Starbucks include product, price, promotions, distribution and research. The uncontrollable elements of marketing decisions facing Starbucks include competition, politics, laws, consumer behaviors and level of technology. (Philip Cateora, 2010) Starbucks is one of the largest chains of coffee shops in the world. The Starbucks name and image connect with millions of consumers around the globe. Up until recently, it was one of the top fastest-growing brands in annual BusinessWeek surveys of the top 100 global brands. Starbucks grew from 17 coffee shops in Seattle 15 years ago to over 16,000 outlets in 50 countries. (Philip Cateora, International Marketing, 2010) Starbucks dominates the segment as it spreads its stores into more and more markets and moves its brand into supermarkets, offices, hotels, airports, and other venues. (Business, 2001) Starbucks has managed to remain nearly debt free by relying on mystique and word of mouth, whether here or overseas, the company saves a bundle on marketing costs. Starbucks spends just $30 million annually on advertising, or roughly 1 percent of revenues, usually just for new flavors of coffee drinks in the summer and product launches, such as its new in-store Web service. Most consumer companies their sizes shell out upwards of $300 million per year. (Philip Cateora, International Marketing, 2010) Since doing business in other countries besides the U.S., Starbuck does not solely rely on the U.S. for continuing increases in profits. “Starbucks record third quarter results reflect both the underlying strength and continuing momentum we have been experiencing across all of our business segments and around the world,” said Howard Schultz, Founder, Chairman, President and CEO. “These...
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