...CASE 1-1 Starbucks---Going Global Fast 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Ans. I think the controllable factors that Starbucks has encountered entering the global market are similar to those in their domestic market. These factors include product, price, place and promotion. The Starbuck's name and image connect with millions of consumers around the globe. Internally, Starbuck's is able to make adjustments to fit a county's cultural tastes and expectations regarding their product, it's price, where it is available and how it is marketed. Starbuck's is also able to take part in market research to be sure their product has the right fit for each of its international locations. According to the company's website, they maintain a high level of success internationally by choosing international partners who share their values and commitment to bringing the Starbuck's experience to customers worldwide. The controllable elements can be altered in the long run and, usually, in the short run to adjust to changing market conditions, consumer tastes, and corporate objectives. Some elements that are almost impossible to control by Starbucks management include: • Sovereign risks - governments of foreign countries may change their fiscal and monetary policies affecting the operations of Starbucks. • The Prices of coffee in world commodity markets - prices may be affected for example...
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...Case 1-1 Starbucks – Going Global Fast Sept. 23, 2012 Question#1 - Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. The controllable elements of marketing decisions for Starbucks include product, price, promotions, distribution and research. The uncontrollable elements of marketing decisions facing Starbucks include competition, politics, laws, consumer behaviors and level of technology. (Philip Cateora, 2010) Starbucks is one of the largest chains of coffee shops in the world. The Starbucks name and image connect with millions of consumers around the globe. Up until recently, it was one of the top fastest-growing brands in annual BusinessWeek surveys of the top 100 global brands. Starbucks grew from 17 coffee shops in Seattle 15 years ago to over 16,000 outlets in 50 countries. (Philip Cateora, International Marketing, 2010) Starbucks dominates the segment as it spreads its stores into more and more markets and moves its brand into supermarkets, offices, hotels, airports, and other venues. (Business, 2001) Starbucks has managed to remain nearly debt free by relying on mystique and word of mouth, whether here or overseas, the company saves a bundle on marketing costs. Starbucks spends just $30 million annually on advertising, or roughly 1 percent of revenues, usually just for new flavors of coffee drinks in the summer and product launches, such as its new in-store Web service. Most consumer companies their...
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...1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. The controllable elements in the global market are the product, price, place, and promotion. Starbucks is using their products as promotion as high quality. Starbucks is known to have a sweeter taste than the average beverages served at a coffee shop. Starbucks has done research on places they want to reach out to overseas. Starbucks has done studies overseas in Japan, Italy, Spain, Germany, Mexico, and Puerto Rico. For each location, they had to do studies and factor in what their target market is and what they will be doing in those countries. Some problems Starbucks faced were their product. One thing the local coffee shops had over Starbucks is that they served food with their drinks. The uncontrollable elements in the global market are the social factors, legal matters, government, and competitors. As we all know, Starbucks is all over the globe in almost every country. By doing this, they had to face local coffee shops, competitors, and people that were loyal to the local shops. Everyone knows what Starbucks is and what they do, and even so, they had a hard time gaining new customers. There are many regulations and laws they had to face because every country is different and has different regulations and laws that are to be enforced. 2. What are the major sources of risk facing the company? Discuss potential solutions. Global expansion is a...
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...1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. In Japan Starbucks had to deal with uncontrollable elements such as competition among the rival shops, as well as an economic depression. Controllable element in Italy: Price (Italian coffee bars prosper by serving food as well as coffee, an area where starbucks still struggles. Also Italian coffee is cheaper than US coffee. Americans pay about 1.5 for an espresso, on the other hand northern Italy the price is 67 cents, in the south just 55 cents. [ (Starbucks Going Global Fast Case 1.1, 2013) ] 2. What are the major sources of risk facing the company? Discuss potential solutions. Starbucks grew from 17 coffee shops in Seattle 15 years ago to over 19,000 outlets in 58 countries. In Seattle there is outlet for every 9,400 people. And the company considers that the upper limit of coffee shop saturation. The company faces an ominously hostile reception from its future consumers, the twenty- or thirty-somethings. They don’t feel wanted in a place that sells designer coffee at $3 a cup. Potential Solutions: The Market saturation can be overcome by focusing on international or global marketing. Figure out a new strategy to market to the newer generations. Possibly focusing on the product that they are selling by improving the quality of the coffee so that the price of 3 dollars or more fits what they are serving. 3. Critique Starbucks’ overall corporate...
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...Starbucks – Going global fast case study Prashansa Sunuwar King’s College affiliated with Westcliff University BUS 367 The Necessities of International Marketing and Culture Dr. Thien-Huong T. Ninh March 20, 2016 Abstract This paper addresses the various factors and risks that a company has to face while going global. This report is based on the case study focused on Starbucks. It answers various questions regarding issues that an international company like Starbucks has to face. The answers incorporate the elements that are both controllable and uncontrollable when a business is going global. The sources of risks that Starbucks is facing and what can be done to eliminate the risk are provided. Also, there are few suggestions regarding what Starbucks can do to improve profitability in Japan. Starbucks – Going Global Fast Case Fifteen years ago, Starbucks had 17 coffee shops in Seattle. Now, it has 19,000 outlets in 58 countries. According to the official website of Starbucks, Starbucks serves a wide variety of hot and cold drinks including espressos, cappuccinos, and even pastries and other delectable treats. Starbucks has become a meeting place for people. People go to Starbucks to chat, meet up, and even for meetings and rejuvenation. The success of Starbucks grew after Howard Schultz purchased Starbucks on 1981 and introduced Italian coffeehouse tradition in the United States in 1983. After Starbucks went public, the sales have increased by an average of 20 percent annually...
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...CASE 1 – 1 Starbucks - Going Global Fast ------------------------------------------------- ------------------------------------------------- Didem Akdemir ------------------------------------------------- Mignon Pemberton ------------------------------------------------- Yunella Webb ------------------------------------------------- ------------------------------------------------- 2 IBMS Feb11 Table of Contents 1. Summary 2 2. Questions 4 3. Sources 6 1. Summary Starbucks’ success Starbucks is one of the largest chains of coffee shops in the world. They started their business in the early 80s as a tiny chain of Seattle coffee shops, grew rapidly in the 90s and now own 5,689 coffee shops in 28 countries. This chain of coffee shops is very well managed by a well-seasoned management team popularly known as H2O, because of Howard Schultz (Chairman and Chief Global Strategist), Howard Behar ( Head of North American Operations), and Orion Smith (CEO). This year (2002) it had about 1200 and it was still in the early stages of its plan to colonize the world. Problem Although, the company has expanded enormously, since it went public in 1991, this growth can not last much longer. New profits in the saturated home market are difficult to make. Although, there are still 8 states with no Starbucks stores in the U.S. One outlet for every 9400 people is the norm according to Starbucks and this has not been reached yet. The company admits that while...
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...Global Market and Emerging Markets Instructor: Barıs Erman Depecik Assignment 1: Discussion Write Ups Reha Cetintemel, Ahmet Berkay Bork, Mehmet Selahi Sisikoglu Section 2, Team 5. Assignment 1 Case Study 1: Global Portfolio Planning and Market Interconnectedness On some geographic regions,it is still better to adhering to allocating resources on a country-by-country basis, since some countries did not experience the rapid change and dynamism in terms of competition. So, in order to not waste time and resources, some countries do not require thorough research. Also, it is important to realize that, customers in proximate countries show similar motives, attitudes among a brand, product line etc. Therefore, companies can rely on this similarity, which will ease their process while they decide to enter or improve their status on these markets. Sometimes, a single approach for multiple countries might be enough. However, firms might need to alter their marketing strategy, even they operate on similar markets. They should not take it granted that the same strategy will work for different markets, as we have seen some examples that some of the strategies fail even the difference between markets are so small. One way or another, they might have to make small changes, in order to adapt their strategy for a given market. Case Study 2: Starbucks: Going Global Fast Starbucks is one of the famous worldwide brands. Admirely i read the case about starbucks and its aggressive...
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...Starbucks: Going Global Fast Ronnie Deaver MKG400 International and Multi-Cultural Marketing Colorado State University – Global Campus Dr. Michael E. Ricco June 19, 2016 Starbucks: Going Global Fast Starbucks is a fast growing and well known US based company focused on penetrating international markets. When entering a new market, there are always associated risks, problems, controllable/uncontrollable elements, and process optimizations. Below is a discussion on the factors contributing to Starbucks expansion into international markets such as Japan. Controllable Elements For any company expanding to a new market, there is a plethora of controllable and uncontrollable elements to consider; some new and some similar to those faced in domestic markets. Interestingly, the controllable factors that Starbucks encountered when entering the global market were similar to those faced in their domestic market; product, price, place and promotion. The Starbuck’s brand name and image connect with millions of customers globally. Starbucks can control and adjust its product to meet the cultural needs and expectations of a market; including price, availability, and their marketing strategy. Using appropriate market research, Starbucks can pre-emptively make certain that their product is the right fit for each of its international locations. According to Starbucks (n.d.), they maintain a high level of success internationally by working with international partners who understand...
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...Case 1-1 Starbucks- Going Global Fast 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Answer: The controllable factors that I believe Starbucks has encountered entering the global market are similar to the controllable factors they have encountered in their domestic market. The controllable factors are product, price, place, and promotion. Starbucks has millions of consumers around the globe and is able to adjust to fit the different tastes and expectations of different cultures based on their products, prices, places Starbucks is available and how Starbucks markets themselves. The marketing research group of Starbucks also can evaluate to make sure the products they are providing to different countries and cultures is the right fit for them. When it comes to the uncontrollable elements that Starbucks has encountered entering the global markets, I can think of three factors. The first major factor for Starbucks is the prices of coffee in the world commodity markets. The price of coffee may be affected for example by a drought, just like corn if there is a drought the price of corn goes up. A factor that Starbucks also can’t control is the customers’ income. When the economy is doing bad then people spend less which means people would possibly buy less Starbucks then. The last factor that Starbucks has no control over is the variation in world currency rates. For example, based on (finance.yahoo.com) 1 US dollar...
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...Case Study 1: Starbucks- Going global fast 1.) An example of a controllable element that Starbucks has experienced when entering the global market is the mod and trendy designs of stores. According to the article, Starbucks overseas still seems new and hip; this benefits the company because in places such as Italy, consumers want more modern coffee houses. Another example of a controllable element that hurts the company is their lack of food options vs their Italian competitors, as well as their very expensive pricing. An example of an uncontrollable element which Starbucks faces in other countries, such as Israel, is the preconceived prejudice that the company is greedy. 2.) One major risk the company is facing is cannibalism from their own stores. Although Schultz claims that they self cannibalize their stores at a rate of 30% a year, this is an issue that can worked on. I believe by closing down some stores which may be affected by self cannibalism Starbucks will be able to save money not only from eliminated the issue, but also on normal costs of running a business. Another issue they seem to be having is the newer generations in the US no longer enjoying the environment Starbucks has been famous for. I believe a solution to this problem would be to obtain more customer input on what their preference may be. Starbucks is known to be innovative when dealing with customer service and satisfaction. I feel they should do a quick survey and see who their market is and...
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...Case Study : Starbucks- Going Global Fast. Question 1 Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Answer: Starbucks have encountered various controllable elements while going global. Controllable elements in marketing is the 4Ps – Product, Pricing, Promotion and Place. Starbucks have localised product for different regions where Starbucks have expand its business to. Localised product means products are created to suit the taste and culture of a particular country or region. Example in the case study, Starbucks developed espresso and latte which is less sweet than US counterparts to match with Asian taste. Starbucks in Asian region also serves green tea latte to suit Asian habits of drinking tea, especially green tea. The next controllable element Starbucks encountered is the pricing factor. Since Starbucks is going global, Starbucks have to have a good pricing strategy to suit every market. Pricing strategy can be in various forms like bundle pricing or discounts and rebates. Pricing also determine the target customer of the business. Starbucks in this case does not compromise on the price. Starbucks are adopting high end pricing rather than competitive pricing. Starbucks is confident that the coffee they serve will certainly worth the price customers pay for. Therefore Starbucks never lower the price as doing so will reduce its brand value. Instead Starbucks continue with the same price and serve...
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...page………………………………………………………………1 * Abstract………………………………………………………………..2 * Introduction………………………………………………………… 2 * Identify the controllable and uncontrollable elements…………………………………………………………… …3 * The major sources of Risk facing the company and Potential solutions………………….…………………….…… .. 3 * Critique Starbucks overall corporate Strategy ..…… 4 * Starbucks improve profitability in Bangladesh………4 * Recommendation and conclusion……………………………………….…………………… 5 * Reference…………………………………………..……………….. 5 Abstract Global market is immensely accumulative now a days, with the vigorous effects of globalization which effecting firms of all breeds to expand the business across the borders. This report is generally bases on the answers to the provided case study of Starbucks growth story and its international expansion plans. Starbucks being the producers of one of finest coffee and premium drink beverages manages its major markets within USA and abroad. The report will accumulate Starbucks potential strategic options with substantial vision of the management to expand business internationally while understanding the escalating aspects of ethical and cultural values which Starbucks owns as an influential organization. Introduction This report is ultimately based on critical analysis and evaluation of the case study provided for one the leading coffee and Beverages Company. With the expanding international business and continued globalization policy of Starbucks, this report will...
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...Case 1-1: Starbucks Going Global Fast Andrew Perry MRKT 4343 Global Marketing Professor Douglas Gatton 10 February, 2015 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Nearly every element that Starbucks has encountered can be controlled in some degree or another. One of the somewhat controllable elements that Starbucks has faced is a resistance in breaking into the already occupied markets. In many places across Europe, well respected coffee chains have already been established and have a decently loyal consumer base. Given the incredible quality of Starbucks’ coffee, a simple price-war could generate new customers quickly. From then, a continued positive reputation will be established for the company and Starbucks’ market share will grow. Once a decently sized market share has been established, Starbucks can then begin to gradually increase their prices, while offering incentives along the way. Before too long, Starbucks have the potential to become a dominate force in Europe which still maintaining high margins through premium pricing. Another obstacle facing them is the skepticism that they use materials that are harmful to the environment, such as Styrofoam. This is of course untrue, but all that matters is what the customers believe. They can overcome this through a marketing campaign designed to clear the air. Also, Starbucks faces sensitive political issues in the Middle East that they will...
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...Case- Starbucks : Going global Fast 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. There are controllable and uncontrollable elements that Starbucks has encountered global markets , where controllable elements refers to the ability of strabucks to overcome the problem and solve it , whereas uncontrollable elements refers to current situation in the market and how they can adapt to it. The case discusses multiple international markets that Starbucks had entered. Japan, France, Italy, Austria, and the Middle East were mentioned. Starting with the Japanese market, the elements that faced Starbucks there were uncontrollable. The first element was the fierce competition in the Japanese market that already existed, and the fact that Japan’s economy had suffered a blow which resulted in an economic depression. Moving on to the next market, which is France. The elements were also uncontrollable because the policies and regulations in the French republic were extremely sophisticated and biased towards the Labour Unions. Going south towards Italy, which is one of those countries that coffee-drinking is embedded in its culture. Starbucks’ Italian mission was faced by a controllable element, which is Starbucks’ own pricing strategy. In a country where the average Italian is used to paying 65cents (North), and 55cents (South) for a cup of espresso, Starbucks offered their espresso for a $1.5. Also, the fact...
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...MG Case 1.1 Starbucks – Going Global Fast Starbuck Corporation is an American coffee company and coffeehouse-chain founded in 1971 in Seattle, Washington. In 1987, the three owners sold the Starbucks chain to Howard Schultz, a former employee, and quickly began to expand, going from 17 coffee shops in Seattle to over 20,891 shops in 62 countries: United States, Canada, Japan, China, United Kingdom, South Korea, Mexico… Since 1987, Starbucks has opened on average two now stores every day. However Starbucks is now facing some challenges. The sales have dropped from $10.4 billion in 2008 to $9.8 billion in 2009. The corporation had to close 475 stores in the United States in 2009 to reduce costs. The market is saturated across the United States and Canada, and Starbucks is now facing employee’s dissatisfaction. 1. The controllable elements are about the firm characteristics and research and development. The firm’s characteristics are: the products (Hot and cold beverages, snacks, pastries…), the price (premium prices for their products), promotion (the firm has saved a lot of marketing cost by relying on word of mouth), channel of distribution (20,891 outlets in 62 countries which shows that Starbucks has good controlled over its channel of distribution). Research and development has an important part of the firm. It has controlled over its R&D process, it has installed automatic espresso machines to increase the speed of service and also offered the prepaid card so...
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