Starbucks Case – Identify De Controllable and Uncontrollable Elements That Starbucks Has Encountered in Entering in Global Markets
Essay Preview: Starbucks Case – Identify De Controllable and Uncontrollable Elements That Starbucks Has Encountered in Entering in Global Markets
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Question 1: Identify de Controllable and Uncontrollable elements that Starbucks has encountered in entering in Global Markets:
Like all companies there are controllable and uncontrollable elements in Starbucks. Starbucks has a strong control over their Product. They are offering a high quality to their clients and thats gives them to right to increase their price level compared to other coffee shops. They can fit in the culture of country and they are serving different kinds of coffees all around the world. For example in Japan people are ready to pay more as long as their coffee taste sweeter . Thats way menu of Starbucks varies all around the world. In Japan, the company is developing “ready-to-drink” products based on “espresso” and “latte” less sweet than in USA.
Distribution is crucial for Starbucks. In N.Y ,Manhattan there is one Starbucks for every 12.000 habitants but this is not the case in for every state in United States. There are 8 US states with no Starbucks established yet beside this Starbucks is able to desing and open a new store in 16 weeks with and they guarantee a 3 years payback investment.
As Starbucks is an American company they have to fulfill their duties to the American Government as a side effect of being an American company, last year Starbucks sued by 470 people only in California . Not everybody is a fan of Starbucks and there are some people who are certainly concerned about Starbuckss going global moves. Starbucks may be serving quality coffee but with their high prices they are not addressing to young people.
Those can be uncontrollable elements in domestic market. In global market every countries comes with their own problems. For example there are some legal issues that concern Starbucks. In Italy especially in the south coffee price is three times less than the Starbucks coffee and this effect their sales in Italy maybe in Italy people may prefer classical local coffee shops but in Vienna young people prefer starbucks rather than old coffee shops.
Question 2: What are the major sources of risks facing the company and discuss potential solutions.
Risks-
The major sources of risks to Starbucks are related about how the company will maintain its high-growth expansion with the domestic market satured and how they will face with challenge of operate overseas. This expansion trigger another source of risk, that is how they will control the quality of the product and the quality of service that is one of the most valuable quality referred to Starbucks along with the satisfaction of the employees.
Possible Solutions-
The Starbucks will need to expand overseas to continue the high-growth that they are used to have because the domestic market is already satured. Overseas