Starbucks: Going Global Fast
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Controllable
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 java say, Italian purists, much better. 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.
Uncontrollable
In Japan: Competition among rival shops in Japan and the economic depression.
In France: Political and legal bindings. (France’s arcane regulations and generous labor benefits).
In Vienna: Culture (young are always enthusiastic about new and they embrace the new. So, Starbucks will get positive advantages in expanding their business in Vienna compared to existing coffee shops there).
2. What are the major sources of risk facing the company and discuss potential solutions.
Basically Starbucks faced three major risks at domestic region. One of which was satured market condition (USA). Fifteen years ago they initially started with 17 coffee shops in Seattle and 5,689 outlets in 28 countries. Now amazing 4,247 stores scattered across the United State and Canada. In Seattle there is outlet for every 9,400 people. And the company considers that the upper limit of coffee shop saturation. Another risk is losing customers, because fewer options are available for the customer. And third risk is less but not the least the young generation (generation) feels comfortable. Global expansion poses huge risks for Starbucks. For one thing it makes less money on each overseas because most of them are operated with local partners.
Potential Solutions
*One of the risks that they faced in USA the risks of market saturation can be overcome in focusing on international or global marketing. They may focus on the fact of reducing employee disruption to increase the quality of service and coffee for which they
Controllable
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 java say, Italian purists, much better. 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.
Uncontrollable
In Japan: Competition among rival shops in Japan and the economic depression.
In France: Political and legal bindings. (France’s arcane regulations and generous labor benefits).
In Vienna: Culture (young are always enthusiastic about new and they embrace the new. So, Starbucks will get positive advantages in expanding their business in Vienna compared to existing coffee shops there).
2. What are the major sources of risk facing the company and discuss potential solutions.
Basically Starbucks faced three major risks at domestic region. One of which was satured market condition (USA). Fifteen years ago they initially started with 17 coffee shops in Seattle and 5,689 outlets in 28 countries. Now amazing 4,247 stores scattered across the United State and Canada. In Seattle there is outlet for every 9,400 people. And the company considers that the upper limit of coffee shop saturation. Another risk is losing customers, because fewer options are available for the customer. And third risk is less but not the least the young generation (generation) feels comfortable. Global expansion poses huge risks for Starbucks. For one thing it makes less money on each overseas because most of them are operated with local partners.
Potential Solutions
*One of the risks that they faced in USA the risks of market saturation can be overcome in focusing on international or global marketing. They may focus on the fact of reducing employee disruption to increase the quality of service and coffee for which they