Starbucks Case Study
STARBUCKS – GOING GLOBAL FAST
Case Study 1
April VanRivers
Adv. International Marketing
January 15, 2013
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
The controllable elements that Starbucks has encountered in entering the global markets are price, taste, image, employees, target and their position. In the United States, Starbucks has been able to sell ‘Grande’ lattes for nearly $5, which has resulted in huge profits and fundamentally zero debt. However, in markets such as Italy where Starbucks anticipates entering in the near future, the price of $5 will not suit the people of that culture especially being that Italy is the epicenter of European coffee culture. The case stated that Italians are accustomed to spending 55 to 67 cents on a cup of latte in comparison Starbucks charges $1.50.
The next controllable element is taste. Starbucks has done an amazing job at appealing to the palate of cultural preference in taste. They have entered that Asian market with making espressos and lattes that are less sweet than the U.S. However the verdict is out on whether the Italians – the culture that Starbucks has adopted with its language – will favor the ‘American’ Italian flavor over vintage Italian coffee. This element also correlates with the loyalty of consumers in global markets, which is actually an uncontrollable component. Nevertheless, taste is a controllable factor for Starbucks in the sense that it can produce a bolder flavor. Starbucks position in the American market is distinct; it caters to business professionals and as the case pointed out “latte sipping sophisticates that enjoy listening to Kenny G”. However, just as the market for Starbucks is evolving, the position and target that Starbucks attract in foreign markets will also need to consider Generation X. An important controllable element is the rate at which they expand. Starbucks chose to expand aggressively in
Case Study 1
April VanRivers
Adv. International Marketing
January 15, 2013
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
The controllable elements that Starbucks has encountered in entering the global markets are price, taste, image, employees, target and their position. In the United States, Starbucks has been able to sell ‘Grande’ lattes for nearly $5, which has resulted in huge profits and fundamentally zero debt. However, in markets such as Italy where Starbucks anticipates entering in the near future, the price of $5 will not suit the people of that culture especially being that Italy is the epicenter of European coffee culture. The case stated that Italians are accustomed to spending 55 to 67 cents on a cup of latte in comparison Starbucks charges $1.50.
The next controllable element is taste. Starbucks has done an amazing job at appealing to the palate of cultural preference in taste. They have entered that Asian market with making espressos and lattes that are less sweet than the U.S. However the verdict is out on whether the Italians – the culture that Starbucks has adopted with its language – will favor the ‘American’ Italian flavor over vintage Italian coffee. This element also correlates with the loyalty of consumers in global markets, which is actually an uncontrollable component. Nevertheless, taste is a controllable factor for Starbucks in the sense that it can produce a bolder flavor. Starbucks position in the American market is distinct; it caters to business professionals and as the case pointed out “latte sipping sophisticates that enjoy listening to Kenny G”. However, just as the market for Starbucks is evolving, the position and target that Starbucks attract in foreign markets will also need to consider Generation X. An important controllable element is the rate at which they expand. Starbucks chose to expand aggressively in
Cited: Anderson, A. (2013). Principles of Employees Empowerment & Its Advantages. Retrieved January 27, 2013, from Chron Small Business: http://smallbusiness.chron.com/principle-employee-empowerment-its-advantages-1844.html Branded Translations. (2011, August 4). How to position your brand in a foreign market. Retrieved January 25, 2013, from Branding Beyond Borders: http://www.brandedtranslations.com/archives/636 Morrissey, J. (2010, November 15). Younger Generation Favoring Energy Drinks Over Coffee. Retrieved January 27, 2013, from Time: Business & Money: http://www.time.com/time/business/article/0,8599,2031165,00.html The Hofstede Center. (n.d.). Italy - Geert Hofstede. Retrieved January 27, 2013, from Geert-Hofstede.com: http://geert-hofstede.com/italy.html The Hofstede Center. (n.d.). Japan - Geert Hofstede. Retrieved January 27, 2013, from Japan - Geert Hofstede: http://geert-hofstede.com/japan.html