Starbucks—Going Global Fast
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
• Controllable Elements – Italian coffee is cheaper than US coffee. The price for Espresso is much cheaper in Italy then in America. They have also succeeded in serving food, something that other countries have failed in doing.
• Uncontrollable – In France, they face not only political but legal constraints; with many regulations. In Vienna, they have cultural issues where they embrace the new in that they will always seek new trends. In Japan the uncontrollable environment there, is the economic depression that they face and that of the rivalry between coffee shops.
2. What are the major sources of risk facing the company? Discuss potential solutions.
• Risks that Starbucks faced were: losing customers, age group, and being in an engrossed market environment in the U.S.
• Ways that they could alleviate these problems could be:
i. Bringing more variety and an overall better product to its consumers, this should consecutively increase customers business. ii. Repositioning, re-pricing and re-market products so as to cater to all ages. iii. In an engrossed market they may branch out seeking more international business. iv. They could also increase quality of service and incentives so as to have a better customer-employee relationship that could in-turn bring repeated business.
3. Critique Starbucks overall corporate strategy.
• With Starbucks overall corporate strategy has them at somewhat of a loss in a few ways. In trying to become a global force they have not been spending what is required for them to be extremely successful. With proper advertising strategies they could find themselves ahead of the rest. In certain cities they have as much as 129 while in other are as many as two or even none. Rather than fully compacting one city and believing that many outlets mean great business, they should satisfy customer needs and
• Controllable Elements – Italian coffee is cheaper than US coffee. The price for Espresso is much cheaper in Italy then in America. They have also succeeded in serving food, something that other countries have failed in doing.
• Uncontrollable – In France, they face not only political but legal constraints; with many regulations. In Vienna, they have cultural issues where they embrace the new in that they will always seek new trends. In Japan the uncontrollable environment there, is the economic depression that they face and that of the rivalry between coffee shops.
2. What are the major sources of risk facing the company? Discuss potential solutions.
• Risks that Starbucks faced were: losing customers, age group, and being in an engrossed market environment in the U.S.
• Ways that they could alleviate these problems could be:
i. Bringing more variety and an overall better product to its consumers, this should consecutively increase customers business. ii. Repositioning, re-pricing and re-market products so as to cater to all ages. iii. In an engrossed market they may branch out seeking more international business. iv. They could also increase quality of service and incentives so as to have a better customer-employee relationship that could in-turn bring repeated business.
3. Critique Starbucks overall corporate strategy.
• With Starbucks overall corporate strategy has them at somewhat of a loss in a few ways. In trying to become a global force they have not been spending what is required for them to be extremely successful. With proper advertising strategies they could find themselves ahead of the rest. In certain cities they have as much as 129 while in other are as many as two or even none. Rather than fully compacting one city and believing that many outlets mean great business, they should satisfy customer needs and