Case Study 1-1 Starbucks
1) Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
As Starbucks enters the international market will have to deal with the experience the going pains and tensions of entering an unknown territory where the public atmosphere is going to be different. First, some of the controllable elements that Starbucks deals with are the 4p’s (Price, Place, Promotion, and Product). Starbucks ultimately has control over their actions which lead to how people perceive the firm’s price, products they are offering, how they promote their products, and the distribution method they use to get the products to the consumer. For example, the coffee in Italy is much cheaper than Starbucks´ coffee. An espresso in northern Italy is approximately 67 cents, and in the south just 55 cents. While Americans pay about $1.50 for an espresso. By that reason Starbucks would have to lower the prices, entering the Italian market to even be competitive or even attract customers. Next, some of the uncontrollable elements that Starbucks might encounter when entering a global market is the balance between the domestic and foreign environment. Back in the United States Starbucks has a lot of different domestic fields that it needs to overcome to be reliable and profitable. Some examples are having political and legal forces, competitive structure, and have an economic climate. Also, when entering into the foreign market there are many different risks and elements to overcome to because excepting into the market and obtain customers. For example, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces and political/legal forces all have to deal with how Starbucks runs its business in a foreign market. Overall, there are many different controllable and uncontrollable elements that Starbucks has to realize to become a profitable business in an...
Citations: Brooke, James. "In Japan, Make That Starbucks to Go." The New York Times - Breaking News, World News & Multimedia. 9 July 2002. Web. 29 Aug. 2011. <http://www.nytimes.com/2002/07/09/business/in-japan-make-that-starbucks-to-go.html?ref=starbuckscorporation>.
Ken Belson. "World Business Briefing | Asia: Japan: Starbucks Stock - New York Times." The New York Times - Breaking News, World News & Multimedia. Web. 29 Aug. 2011. <http://www.nytimes.com/2001/10/11/business/world-business-briefing-asia-japan-starbucks-stock.html?ref=starbuckscorporation>.
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