Starbucks Case – Going Global Fast Essay Example
Starbucks Case – Going Global Fast Essay Example

Starbucks Case – Going Global Fast Essay Example

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  • Pages: 4 (850 words)
  • Published: May 10, 2017
  • Type: Case Study
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Question 1: Starbucks has encountered both controllable and uncontrollable elements in entering the global market. The case examines various international markets that Starbucks has ventured into, including Japan, France, Italy, Austria, and the Middle East. In the Japanese market specifically, Starbucks faced uncontrollable elements. These included fierce competition that already existed in the market, as well as Japan's economic downturn, which led to an economic depression.

Moving on to the next market, France, the issue was the uncontrollable elements stemming from the country's sophisticated policies and biased regulations favoring Labour Unions.

Heading towards Italy, coffee-drinking is deeply ingrained in its culture. However, Starbucks faced a controllable element in the form of their own pricing strategy. In a country where the average Italian pays 65 cents (North) and 55 cents (South) for an espresso, Starbucks offered theirs for $1. Moreover, Italian cof

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fee houses serving food alongside coffee posed an additional challenge for Starbucks.

When Starbucks entered Vienna, known as the 'Imperial City' and symbolizing Western sophistication, it encountered a culturally adaptable environment that welcomed American Coffee Shops like Starbucks. Young Austrians eagerly flocked to Starbucks stores for their coffee fix, making it an uncontrollable element.

In conclusion, Starbucks has branches in various countries within the troubled Middle East, including Lebanon, Kuwait, Saudi Arabia, United Arab Emirates, and more. Howard Schultz, the company's founder, faced criticism for taking a biased stance against Palestinians. However, he has since rectified this mistake. Moving on to the major sources of risk facing Starbucks and potential solutions, one notable risk is saturated markets such as the USA and Japan.

Starbucks has a total of 5,689 shops worldwide, with a significant concentration in North America, where there

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are at least 4,247 shops in the US alone. However, younger customers perceive Starbucks' prices as high and are not all fans of the "scene" associated with the brand. In cities where Starbucks is rapidly expanding, customers are becoming frustrated with the limited availability of alternatives.

Starbucks should implement various strategies to mitigate these risks. Firstly, they should focus on improving employee satisfaction to portray themselves as a welcoming coffee shop. Additionally, investing in marketing their social responsibility initiatives would enhance the company's image within the communities where they operate.

Starbucks may consider revising its pricing strategy, potentially offering discounted prices on new products to appeal to a wider market and foster brand loyalty among younger coffee enthusiasts. In evaluating Starbucks' overall corporate strategy, it proves effective for a large multinational corporation; however, it presents a contradiction to the values that Starbucks prides itself on. While positioning as a caring company that provides a friendly ambiance and quality coffee, there exists one drawback in implementing this corporate strategy.

Starbucks has a significant global presence with numerous stores worldwide. However, there are currently eight states in the United States without any Starbucks stores, a situation that I firmly believe should be rectified. Additionally, the approach of aggressively entering cities with stores has not always yielded positive results. This strategy has occasionally led to customer dissatisfaction due to the absence of alternative options and the unfair elimination of competition. Interestingly, Starbucks promotes "Fair Trade" but fails to consistently adhere to the basic principles of fair trade in their business practices.

Starbucks should avoid monopolizing cities and displacing smaller competitors, as this can lead to the dilution of their brand and the

alienation of significant portions of the market. It is crucial to reassess and improve the treatment of their employees, as the baristas serve as the primary representatives of Starbucks to customers worldwide. While customers may not personally encounter Howard Schultz when visiting a Starbucks store, they do interact with and receive service from the baristas, making their satisfaction key in shaping the ambiance of the shops.

In conclusion, it is essential to highlight that Howard Schulz, the face of Starbucks, occasionally makes disastrous decisions. There was a significant uproar from the media in the Muslim world. It is crucial to keep business and religious/political affiliations separate. Mr. Schultz, they should not be mixed! Question 4: How can Starbucks enhance profitability in Japan? The Japanese society values different things compared to individualistic countries/societies due to their collective nature.

Starbucks should consider the cultural differences between the United States and Japan as they make decisions, in order to boost profitability in the Japanese market. One example of Starbucks' previous innovative solutions is the Starbucks Express website, which was not successful in the US. However, if this solution is thoroughly studied and effectively implemented in fast-paced countries like Japan, it could potentially be successful and drive sales in the stores.

Moreover, by diversifying the menu (specifically by incorporating more localized options), Starbucks can appeal to Japanese customers who are not particularly interested in the "American scene" that the brand represents in their country. This approach could also prove successful. Additionally, as inflation continues to plague the Japanese economy, adjusting the pricing strategy could be the key to expanding the customer base in Japan. While this may result in higher sales for

Starbucks, it may also lead to slightly lower profit margins compared to other locations.

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