Case Study Analysis - Questions & Answers
Question 1. Indentify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Answer 1. According to this case, Starbucks has encountered some controllable and uncontrollable elements when entering global market like Japan, France, Italy and Vienna. I will start by the uncontrollable elements in Italy which is price. Italian coffee bars prosper by serving food as well as coffee, an area where Starbucks still struggles. Also Italian coffee is cheaper than Americans pay about $1.5 for an espresso; on the other hand northern Italy the price is 67 cents, in the south is just 55 cents. There are at least three controllable elements according to the case which are in Japan, France and Vienna. In Japan is the competition among rival shops. In France are the political and legal bindings such as the France’s arcane regulations and generous labor benefits. And finally in Vienna is the culture where young are always enthusiastic about new and they embrace the new. Therefore, Starbucks will get positive advantages in expanding their business in Vienna compared to existing coffee shops there.
Question 2. What are the major sources of risk facing the company and discuss potential solutions. Answer 2. First of all, I will list the major sources of risk facing Starbucks which are: Saturated market condition in USA, losing customers because fewer options are available, pricing strategy (High Price), and the young generation (Generation X) feels about Starbucks. After that I will discuss potential solutions base on the risks faced by Starbucks which are: •
Starbucks is facing the risks of market saturation in USA which can be overcome by focusing on international marketing. Starbucks should increase the quality of their coffee their services. •
Starbucks should reposition their product according to customers need, so that they find that the $3 that the Generation X are paying...
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