Starbuck-Going Global Fast

1. 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in
entering global markets.
2. *
3. The Controllable elements that make Starbucks has encountered entering the global market
are face the same problems or almost similar with Starbucks domestic market. The
controllable elements usually are the marketing mix (4P's), which consist of products, price,
place and promotion. First the product name of Starbucks and its brand image can be
adjusted in order to adapt into one cultural tastes and expectation. Next, the pricing of
Starbuck products is reasonable with the foreign current rates and also their overall country
income. Then, Starbuck is also able to take part in market research to be sure Starbucks
products can be fit in the right international locations. Besides providing foods and drinks,
Starbucks also provide the experience for customers in all around the world. As an example
in China, customers in this country prefer to have tea rather than coffee. In this case,
Starbucks have to adapt into their country's culture and thus originated some other drinks
which can fulfill the needs and demand for customers in China.
4. At all times, there are some elements occurred to be an uncontrollable elements to
Starbucks organization itself in entering global market. The political, economy and cultural
issues in the foreign countries can occurred at any time and therefore, these are few
elements which take into consideration when Starbucks trying to adapt into the foreign
market. At any time, the foreign countries governments may change their fiscal and
monetary policies that caused sudden change in Starbucks operation. Therefore, it has given
a big impact on Starbucks. Another example is during economic depression country like
Japan, revised in customers' income and pulled down which caused Starbucks in losing
instead of gaining profit or sales due to the coffee pricing. Besides, the increasing
competition among rival shops in Italy might put Starbucks in risky business development.
Italian coffee is less expensive than U.S. coffee and is also considered by locals to be
superior. Fluctuations in world currency rates are one of the factors when Starbucks
transform their profit to their home base market currency. In country such as France,
Starbucks have to adapt into France's regulations and generous labor benefits, which is legal
and compulsory in order to enter into France market. In country like Vienna, their culture is
different from any other country and this is due to the high number of young population who
are always enthusiastic about the new things, which appear around them and embrace the
new. Therefore, the expansions of business of Starbucks in Vienna tend to be positive
advantages.
5. 2. What are the major sources of risk facing the company and discuss potential solutions.

6. One of the risks is due to the limitation products choice that restricted the business growth
and customers may get bored of it and tend to switch to others. Secondly, the market
concentrations are more to United State and Canada. Back to 15 years ago, 17 coffee shops
in Seattle grown to over 16,000 outlets in 44 countries and amazingly, over 11,000 stores
scattered across the United State and Canada itself and there are only 8 states with no
Starbucks stores. Thirdly, global recession led to shift consumers to less costly brands.
Study has been found that the future generation and people within their 20s and 30;s are not
ready to pay high prices and they think Starbuck is something they couldnt afford to buy in
daily lives.
7. Therefore, as Starbucks going abroad, they should focus not only to their core products but
also finding ways to improve the quality of their coffee and also the services as well as the
environment. Bringing in some other new products helps in fulfill the current demand and
also able to help in business growth. Market saturation in United State and Canada can be
overcome when Starbucks put more concentration into their international market instead of
their domestic market. Besides,
8. Starbuck need to reposition their target instead of target from higher-income level customer
they should focus on middle class like those people around 20s and 30s. In other words,
proper fine-tuning are needed so that less mistake which can cost the chances of lost in
profitability, reputation and also trust by customers can be minimized.
9. *
10. 3. Critique Starbucks' overall corporate strategy.
11. *
12. Starbucks saturated their market in United States. However there are still frappuccino-free
cities that included Butte, Montana and Fargo, North Dakota. This is because the saturation
in big cities and the more outlets in big cities will help in increasing the sales but without
maintaining the good services and meet the demand in the current market, the ideas are just
wrong to be adapted in the global corporate strategy.
13. Like any others brand such as McDonalds who is one of the strong competitor of Starbucks
in Malaysia came out with special' menu with price and quantity differentiation that is mainly
for kids' meal. These are likely to attract and widen their target market where by customers
feel that this will be much more reasonable and the importance of them to McDonalds.
Starbucks not only must put more concentration on their adult target market, but also have to
care for the kids who might be following parents there for a break or accompany parents for
coffee sipping.
14. Some other issue which appear to be mismatch where Starbucks only advertise with one
percent spending of its profits. Low expenditure on advertisements is likely to slow down the
brand building of Starbucks in foreign market. Besides, Starbuck also been critiqued that the

strategy implementing seem to be Starbuck-on-every-corner expansion make it seem not

doing well. Even the number of outlet is getting increasing but it is sharing the same revenue
on same street of two Starbuck outlets. For this part, Starbuck doesnt really focus on
satisfying the customer need but only aggressively to expand it outlet will not able to
succeed in their mission. Lastly, Starbucks pay also does not close to match the work load of
their employees and that case created dissatisfaction among the employees and it affecting
sterling service and even the coffee itself.
15. *
16. * 4. How might Starbucks improve profitability in Japan?
17. *
18. If were to compare, customers in country like Japan and China, Japanese who are
customers of Starbucks are less likely to be aware about the pricing due to their rich country.
Once the products satisfied the needs of them, they are likely to stick and thus it eventually
created product loyalty in customers. For that reason, Starbucks were have to conscious in
things like the strategic location of the stores, whether it conveniences customers and easily
to be find or not. The location is one of the important factors.
19. Secondly, Starbucks were have to create the environments where customers can spend
most of their time at the same place in comfort, supply WIFI system where everyone can
online for their own entertainment, studies or even spaces for business discussion. These
are likely to generate friendly environment where the target market will be widen.
20. Due to the rival shops competition in Japan, Starbucks would have to study the pricing of
their coffees products so that the price of a cup of coffee and the environment will be
reasonable and customers will feel the worthiness rather than feeling expansive and switch
to any other competitors of Starbucks in Japan market. Besides, Starbucks also can
introduce various cultural campaign or entertainment campaign in Japan, so that Japanese
youth feel attraction to come Starbucks