International Marketing - Starbucks Case Analysis
Starbucks Case Analysis
Question 1: Identify controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Controllable elements are the elements that can be changed in the long run, and usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives. Therefore, the controllable elements that Starbucks has encountered in entering global markets were:
price of the products- cheaper products in Italy
products- variety of products
promotion and brand image- spending just 1% of revenues, relying on word of mouth advertising method, considered to be “hip” which attracts young customers in Vienna
technological innovations and customer service- installation of automatic espresso machines to speed up the service, an offer of prepaid Starbucks cards in order to cut transaction time in half, availability of WiFi at the stores
On the other hand the uncontrollable elements were:
economic factors- economic depression
competition- McDonald’s, local coffee shops
different culture of drinking coffee in different countries
demographic factor- decline consumption of younger generations
rising cost of ingredients
political and legal bindings
Question2: What are the major sources of risk facing the company? Discuss potential solutions.
|RISK |SOLUTIONS |
|Loss of future customers (Generation X) |- decreasing price of products to be more affordable |
| |- create a more customer friendly space for young customers to let them feel more |
| |comfortable in the stores |
Question 1: Identify controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Controllable elements are the elements that can be changed in the long run, and usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives. Therefore, the controllable elements that Starbucks has encountered in entering global markets were:
price of the products- cheaper products in Italy
products- variety of products
promotion and brand image- spending just 1% of revenues, relying on word of mouth advertising method, considered to be “hip” which attracts young customers in Vienna
technological innovations and customer service- installation of automatic espresso machines to speed up the service, an offer of prepaid Starbucks cards in order to cut transaction time in half, availability of WiFi at the stores
On the other hand the uncontrollable elements were:
economic factors- economic depression
competition- McDonald’s, local coffee shops
different culture of drinking coffee in different countries
demographic factor- decline consumption of younger generations
rising cost of ingredients
political and legal bindings
Question2: What are the major sources of risk facing the company? Discuss potential solutions.
|RISK |SOLUTIONS |
|Loss of future customers (Generation X) |- decreasing price of products to be more affordable |
| |- create a more customer friendly space for young customers to let them feel more |
| |comfortable in the stores |