1. Identify the uncontrollable elements that Starbucks has encountered in entering global markets.
As per the case study, there are various controllable and uncontrollable elements in different nations for Starbucks. In this case of Starbucks, when they are entering the international marketing, they have faced various issues and problems.
Controllable elements: It involves price, product, place, and promotion. They can manage and control the rates of their commodities, alter their goods as per the specific culture taste, how many stores will be accessible, and where to position them. The company focuses on promoting various goods and services among customers (Alwaleed, et. al., 2019). Such decisions can be developed how much research they need to do.
Uncontrollable factors: It is that aspect that is impossible to manage in an international environment by Starbucks that includes political, legal, economic, competitive, and cultural forces. These may be directly or indirectly influence on business functions effectively (Shiau, 2016). As per the case study, in Japan, there are main two uncontrollable components which are faced by Starbucks. The initial element is a competition between different rivals and competition is very tough. This is not a factor that can be controlled by Starbucks in the external nations. The second element is economic depression which exists there.
Apart from this, when Starbucks entered in various markets in various nations, then there are some controllable and uncontrollable factors are described as under:
- Economy: In Japan, they cannot manage and control the increasing competition and the economy of the country. Starbucks has faced a depressed economic situation and also observe Japan’s profitability were decline by around 14%.
- Culture: In Vienna, coffee houses are old for such reason in which Starbucks has a certain chance to capture the whole market place through young adults.
- Political and legal bindings: In France, the country offers some regulations which provide benefit to labors.
2. Critique Starbucks ‘ overall marketing strategy in the Japanese market.
According to the case study, Starbucks has been successful in the Japanese market place. But they are facing some losses due to a lack of corporate strategies for increasing goodwill of the company. In this, there is a certain difference between customer expectations and business tactics (Li, 2018). The gap between clients’ demand and business strategy has been observed to cause mistrust between the buyers and businesses where they are involved. The major issue is that Starbucks has concentrated on some states of Japan while there are certain states which have no branch of such a company. For developing overall corporate strategy, Starbucks may focus on advertisement and promotional activities in which they spend lower prices. The company also spend around 1% of their total income on the advertisement. They may need to enhance this spending more or less than 10% as a firm is doing to develop their brand abroad. Along with this, Starbucks requires to make changes in its marketing and promotional strategies so that they can easily attract Japanese customers. They should also be achieving desired customers in the Japanese market place. Besides this, they can reach with younger people who are more likely to consume coffee as compared to other people.
3. Please evaluate Starbucks’ marketing strategy in your home country. If your home country does not have Starbucks, do you think your home country would be a good new foreign market? Why or why not.
Starbucks is one of the leading coffee houses that offer a variety of goods and services to their customers. My home country is the United States where Starbucks is already located and it is a very competitive and lucrative marketplace where the company focuses on improving marketing strategies. For increasing revenue, the company takes the position of their new or existing goods and services that attract various customers. They also lower their commodity rates; design their stores by using appropriate labels and promotional activities, provide free Wi-Fi, and other latest technological services to retain customers (Atzori, et. al., 2018). The company also works to enhance its advertising budget to stay in a huge competition. In the US, some people like coffee and prefer to consume only Starbucks products.
For improving marketing strategies, Starbucks needs to develop new tactics that help in increasing the goodwill of the company in another international market place as well. Starbucks requires introducing the different cultural strategies that assist in attracting potential customers from different countries. In a time of economic recession, the company should concentrate on additional activities and functions that are required to boost its sales or other processes. These functions are important for a firm as it helps in enhancing their reputation. To capture the whole market, Starbucks needs to increase its growth and success level by gaining the attention of different customers.
4. What are the major sources of risk facing the company? Discuss potential solutions.
Starbucks is an American international firm that is based in Seattle, Washington. It is the leading coffee house organization all over the world (Zabeen, et. al., 2016). There is a certain risk that Starbucks facing and also describe some potential solutions which are discussed as under:
Major sources of risk:
- The major risks for the firm are market saturation in the USA.
- The other risk is losing customers as some options are accessible for the clients and the coffee rates of Starbucks are lower as compared to other rivals.
- Enter in a bigger market area or expand to another country is a major risk. In some nations, the cultural gap is another main problem.
- The major risk is salary and lower wages of the staffs and managers of Starbucks company
- An organization is not concentrated on the quality of its core goods of coffee and they do not have other items. Besides this, it is considered as a major risk for the company.
Potential solutions:
It has been recommended that Starbucks need to focus on such risk and develop certain solutions that are described as follows:
- To overcome with market saturation, the company need to concentrate on foreign marketing areas
- To reduces the risk of loss of customers, Starbucks requires to lower their products and coffee prices
- The company can reduce the low salary risk by focusing on employee’s needs and paying the legal wages.
- Coffee is the core product and the company needs to improve the quality of its goods for attracting several clients.
References
Alwaleed, N., Al Huwail, N.H., Singh, S. and AlMejhem, A., 2019. A Case Study on STARBUCKS. Journal of the community development in Asia, 2(2).
Atzori, R., Shapoval, V. and Murphy, K.S., 2018. Measuring Generation Y consumers’ perceptions of green practices at Starbucks: An IPA analysis. Journal of foodservice business research, 21(1), pp.1-21.
Li, C.Y., 2018. Consumer behavior in switching between membership cards and mobile applications: The case of Starbucks. Computers in Human Behavior, 84, pp.171-184.
Shiau, H.C., 2016. Guiltless consumption of space as an individualistic pursuit: mapping out the leisure self at Starbucks in Taiwan. Leisure Studies, 35(2), pp.170-186.
Zabeen, S., Wei, J. and Lu, X., 2016. Development of E-business solutions for fast food restaurants. International Journal of Services and Standards, 11(1), pp.60-80.