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Starbuck International Operations

In: Business and Management

Submitted By robin
Words 510
Pages 3
Overview The case explains why Starbucks had to expand outside the US and the entry strategies it adopted in international markets, and discusses the various risks faced by Starbucks and the effect of these risks in its revenues in international markets. Problem Major Problem The major problem of the case was the not so well planned international operations of Starbucks compared to its US operations and the entry strategies it adopted in international markets. Minor Problem The minor problems were: The pricing of the products offered. The high level of prices of the products of Starbucks is generally caused by too expensive cost of production that causes suffering to its customers. The operation problems encountered by the business due to lack of a trained workforce. The inappropriate and unsuitable real state/location for its store. Objectives To solve the problems of this case study. To recommend advices and solutions regarding the problems encountered of this business. Facts *Alternative Course of A*ction To study and think carefully about the decision of entering international markets. To go for a supplier of cheaper items needed in the operation that would enable the business to lower the prices of its products and make it affordable and attract those middle as well as low profile consumers. To hire trained applicants to ensure the smooth flow of daily business activities. To plan and find the appropriate and customer accessible location of the business. Recommendation “To study and think carefully about the decision of entering international markets.” According to the details given in this case, Starbucks success was due to its profitable domestic operations. The business is doing fine and continuously rising to its success until it enters the international markets. It was reported that most of Starbucks international operations were running into losses. It even reported a loss of $3.9 million in Japan which constituted the largest market for the company outside US and it also performed badly in Europe and the Middle East. Conclusions arises that Starbucks’ international operations were not as well planned as its US operations. Based on this problem, we can say that the entrance in the international markets of the Starbucks was not carefully and wholly planned. It is scrutinize that the volatile international business environment made it difficult for the company to effectively manage its international operations. This is so because of the weak plan of entering international markets. At first, Starbucks branches abroad captured the taste of new customers. This is the reason why Schultz has been more fascinated in this business and several branches followed to be opened across the continents. But suddenly some of it was unpredictably closing down due to losses encountered. If it was only studied and carefully planned, these problems can be prevented. Schultz should have studied the strategy considerations, examined different modes of international entry, understand the problems faced by companies while entering international markets, analyzed the impact of country an political risks on company’s’ international operations and explored the strategies that can be adopted to improve performances abroad.

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