Identify the Controllable and Uncontrollable Elements That Starbucks Has Encountered in Entering Global MarketEssay Preview: Identify the Controllable and Uncontrollable Elements That Starbucks Has Encountered in Entering Global Market2 rating(s)Report this essayThere are controllable and uncontrollable elements that Starbucks has encountered in entering global market, where controllable elements refer the ability of Starbucks to prevent or overcome the problems that arise in the global market, whereas uncontrollable elements refer to the adaptability of Starbucks towards the current situation in the global market.
Marketing strategies is the controllable elements that Starbucks has encountered in entering global marketing. Marketing strategies refer to the marketing efforts that carried out by Starbucks in the global market which represented their 4Ps strategies where the 4Ps are product, price, place and promotion. In entering a global market, taste and preferences of consumers are the important factors to boost up the sales. Thus, Starbucks had customized their products accordingly to suit the taste and preferences of the consumers in different country. For example, in order to suit the lifestyle in Japan, Starbucks had changed their usual made- to- order coffee at cafes to cans, bottles and vending machines. Furthermore, selling a line of bottled and canned coffee enables Starbucks to expand its presence in Asia by catering to local tastes. Hence, the new products offered in Asia comes in two variations which are espresso and latte, are not as sweet as the one offered in their U.S counterparts in order to suit the Asian palates. In additional to that, green tea frappuccino was first launched in Asia due to green tea is an essential or common drinks in Japan and it is acceptable in some of the Asian countries such as China, Taiwan, Malaysia and more. Whereas for the western countries, they are not familiar with the taste, thus the green tea frappuccino was only introduced later on in United States and Canada. Hence, we can see that products that offered are controllable elements in entering global market.
Secondly is the price. The price is also a controllable element for Starbucks. Starbucks can make decision whether to increase or decrease their prices of products in different countries. For example in Italy, the Italian coffee is cheaper than U.S. where Americans pay about $1.50 for an espresso, yet in Northern Italy, the price of coffee is 67 cents whereas in south, it is only 55 cents. Thus, Starbucks can decide whether to maintain their high price of coffee in Italy to build a better brand image or to reduce the price as low as the local Italian coffee in order to compete with the locals. Another example here is the price in Japan. In Japan, the consumers are least price sensitive. According to a Starbucks consumer in Japan, she said that she does not care if the coffee costs more, as long as it tastes sweet. Thus, from here, we can know that they are willing to pay for a product that cost them a lot as long as the product meets their preferences or needs. Thats why in Japan, Starbucks does not have to reduce their price of $1.50 for an espresso, instead they are selling coffee in cups for $1.87 each yet the market is still there.
Thirdly is the place. Starbucks can also control the countries that they want to enter in the global market, and also the place to start up their business in the country. For instance in Italy, Starbucks can choose whether to set up their store in Northern Italy or south of Italy or even all over the Italy as what they did back in their home country. Place in term of their environment is also a controllable element when entering a global marketing. Starbucks can choose to maintain their concept of their stores in other country or change the concept of the stores according to the local cultural or preferences yet Starbucks had standardized their concept of the stores in every country. Thus, in Vienna, Starbucks is anticipated that it would attracts a younger crowd than the established local cafes due to the coffeehouses in Vienna are old yet the concept of Starbucks stores are more hip to them.
In term of their promotion, they controlled it very well in global market. Due to the strategy of Starbucks where they did not adopt the franchise entry mode, they manage to maintain and build their brand image in everywhere around the world. Thus, every year Starbucks just spends roughly around $30 million for advertising purpose, which is only around 1 percent of their revenue, usually to advertise about their new flavors of coffee drinks in the summer and product launches purpose.
Lastly, the controllable element that Starbucks had encountered in entering global market is the political issues in the country. Although some political issues in the country are unavoidable, yet some political issues that happened long time ago or are known worldwide are avoidable. For example, the politic issue between Israel and Palestine. When Starbucks wish to enter these two markets, they need be alert and sensitive to prevent themselves to get involved in their political conflicts. Schultz that already set up Starbucks stores in Kuwait, Lebanon, Oman, Qatar, and Saudi Arabia, unintentionally created a mild uproar among Palestinian supporters, where few years back, he flew to Israel to discuss the Middle East crisis
The Israeli leader has also tried to get the US to support him, but the US failed. As I noted elsewhere, the Middle East has lost a strategic point, but that could be remedied in time. The problem might be dealt with with some form of negotiation, but to me it seems a minor problem here that is still in its infancy. As I mentioned earlier, Starbucks is very cautious in responding to the world’s issues and they are not ready to go for a deal. While these issues, not Israel’s, really are political, they are still too dangerous for some. I feel strongly that the US should be responsible for the solution to the problems.
The other problem that would be solved is that all of these companies from every sector are making their own profit. The problem is the US does not have any financial support for these companies. And it should be a US issue. For every Starbucks, there are many in the US who are making money, and therefore any move on the global side will have a positive impact. If the US doesn’t solve these two problems, then its very difficult for another Starbucks to follow. And that is why I say that the only way for the US not to be involved in their global geopolitical and social relations is if Starbucks decides to become involved in their national strategy. The US can help that strategy with the global market situation, because the US now plays a large role with the global markets
and they would be willing to help Starbucks. In turn, this change allows us to make some international connections with companies like Starbucks.
The biggest problem with the US government is that there are many who do not want the US to follow their national policy. But they want us to follow their policies, because the US is the only country that cares about them. The US government needs to take a stand for the international markets in order to make a serious dent in global business and for the rest of the world. And our own interests have to be considered in creating that place that is beneficial to America.
We will continue to lead from this place and I believe it is the case that we are in an era of global trade liberalization, with a great world policy.
We believe that the new US government needs to lead with great honesty in its policy process.
The US will not only take sides on the US national security policy but also on other international issues that are important for us. The US government needs to be strong enough to know their policy of cooperation.
We won’t hesitate to make contributions to the US government’s efforts to build the relationship of mutual trust. We will be able to strengthen our cooperation in both the US and the international markets, to help to strengthen the relationship.
The US government will also be open about its own domestic decisions that are more critical in the global fight against terrorism and other cyber problems. We must not allow or permit