Case Study Starbucks
Q1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Controllable Elements:
Strong competition
The international coffee market is a very competitive market. There are increasing numbers of competitors, such as full service restaurants and other coffee shops, entering the growing specialist coffee market in recent years. Starbucks must be aware of this strong competition all over the world and try to maintain its operational advantages in order to keep its leading position in the future.
Internally, Starbuck's is able to make adjustments to fit a county's cultural tastes and expectations regarding their product, its price, where it is available and how it is marketed.
Example about price as controllable elements where the Italian coffee bars prosper by serving food as well as coffee, an area where Starbucks still struggles. Also, Italian coffee is cheaper than U.S. java and, says Italian purists, much better. Americans pay about $1.50 for an espresso. In northern Italy, the price is 67 cents; in the south, just 55 cents.
Starbucks faces another strong competition from large U.S. competitors such as McDonald’s Where McDonald’s also is attacking the Japanese market with the introduction of its McCafé coffee shops.
Labor Issues
Starbucks’ has been facing with a lot of discontent among its employees at both domestic and international levels mainly due to low wages. This is a controllable element as Starbucks’ can undertake improvements and this would also result in improvement in its productivity.
Uncontrollable Elements:
Economic Conditions:
Starbucks is heavily reliant on the supply and on the prices of coffee. Although Starbucks has supply agreements with suppliers in advance, the company could still face problems due to fluctuating coffee prices. Other factors, such as weather and economic conditions in coffee producing countries, also affect Starbucks’ operations.
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Controllable Elements:
Strong competition
The international coffee market is a very competitive market. There are increasing numbers of competitors, such as full service restaurants and other coffee shops, entering the growing specialist coffee market in recent years. Starbucks must be aware of this strong competition all over the world and try to maintain its operational advantages in order to keep its leading position in the future.
Internally, Starbuck's is able to make adjustments to fit a county's cultural tastes and expectations regarding their product, its price, where it is available and how it is marketed.
Example about price as controllable elements where the Italian coffee bars prosper by serving food as well as coffee, an area where Starbucks still struggles. Also, Italian coffee is cheaper than U.S. java and, says Italian purists, much better. Americans pay about $1.50 for an espresso. In northern Italy, the price is 67 cents; in the south, just 55 cents.
Starbucks faces another strong competition from large U.S. competitors such as McDonald’s Where McDonald’s also is attacking the Japanese market with the introduction of its McCafé coffee shops.
Labor Issues
Starbucks’ has been facing with a lot of discontent among its employees at both domestic and international levels mainly due to low wages. This is a controllable element as Starbucks’ can undertake improvements and this would also result in improvement in its productivity.
Uncontrollable Elements:
Economic Conditions:
Starbucks is heavily reliant on the supply and on the prices of coffee. Although Starbucks has supply agreements with suppliers in advance, the company could still face problems due to fluctuating coffee prices. Other factors, such as weather and economic conditions in coffee producing countries, also affect Starbucks’ operations.
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