starbucks going global fast case study

Starbucks – Going Global Fast Evaluation Essay

Introduction, starbucks global expansion: controllables, starbucks global expansion: relevant uncontrollable elements, major sources of risks facing starbucks in its international markets, critique starbucks overall corporate strategy, how starbucks can improve profitability in japan, reference list.

Starbucks, like other companies, has continued to expand its global operations for enhanced business sustainability. As a matter of fact, the company is going global by entering new markets. On the other hand, there are various risks that the company is facing in international markets. Therefore, Starbucks has been forced to deal with various elements in entering global markets to enhance its operations.

Starbucks prides itself as the largest coffeehouse company around the globe. It was started in Seattle as a coffee bean roaster and retailer (Starbucks, 2010, p. 8). From thereon, the company has been expanding as time goes by to reach new markets.

Wholesomely, the company has more than 17,800 stores in 49 different countries (Starbucks, 2010, p. 12). Most of these stores are based in the United States of America. In addition, it has a large range of products to suit different market needs and tastes.

In a broad perspective, most of its products are seasonal. This means that they are specific to a given locality that the company operates a store. Starbucks has always had good growth plans and in 2009 it had projected to open 900 stores outside the United States to enhance its global operations (Starbucks, 2010, p. 6).

It should be known that the company has dealt with relevant controllable elements in entering global markets. The company has had a big challenge of maintaining its own growth (Starbucks, 2010, p. 21). As a matter of fact, it does not have any debt and has been financing its expansion programs without any problem.

The company has also been forced to maintain a tight grip on its own image. To deal with this issue, it has ensured that most of its stores are company owned. This implies that there will be no franchises to slow down its operations in different perspectives.

Price is another controllable element that the company has had to contend with. For instance, Italian bars have prospered by offering customers various quisines. Starbucks has controlled its advertising and therefore saved a bundle on its marketing costs (Pendergrast, 2001, p. 8).

As a matter of fact, it only spends 1% of its revenues on advertising and this is very effective and efficient. Most of this is incurred on new product launches and new flavor drinks. When compared with other companies that spend more than $ 300 million on advertising, the company spends $30 million (Pendergrast, 2001, p. 13).

Management expansion tactics have been kept within the reach of the company’s resources in expanding to new markets (Starbucks, 2010, p. 24).

This has made it possible for the company to design and open a new store in less than 16 weeks. In addition, it has also been able to recoup its investments in less than three years. Innovation is another controllable element that the company has continually used to its advantage (Pendergrast, 2001, p. 32).

In this case, the company has been highly innovative as far as its beverages are concerned. This can be explained from the fact that it has installed automatic espresso machines in more than 800 locations in a bid to improve service delivery in new markets (Bryant, 2009, p. 11). Some years back, the company began offering prepaid cards. This has improved its activities in new international markets.

Technology has been embraced at an internal level in the company’s global expansion strategy (Pendergrast, 2001, p. 12). In this case, Web technology has been included in its systems to increase service delivery. This means that customers can preorder and pre-pay for various pastries and beverages.

The company has had to cope with the unpredictable challenge of being refereed to as a mature company (Starbucks, 2010, p. 6). This has been witnessed in the US but has spread to other foreign markets. In this case, the company will continually face a hostile reception from different future consumers.

The company can not control the number of the youthful population in different markets. This means that it has to continually re-invent itself for enhanced sustainability. It has been extensively involved in market research to know the needs of different market segments (Bryant, 2009, p. 431).

As the company spreads out, it has faced different cultural challenges in distinct markets. It should be known that countries have diverse cultural backgrounds. Culture defines the tastes and preferences of different consumers.

Therefore, the company has been forced to understand different cultural aspects to strengthen its presence (Bryant, 2009, p. 65). It is quite obvious that a given commodity might not do well in new international markets. In this case, Starbucks has continually enhanced its product line to suit new market needs and preferences.

There is no company that can control the pace of technological advancements. Technology has continued to spread very fast as time goes by (Pendergrast, 2001, p. 32). For enhanced operations, the company should keep pace with various advancements for an improvement in its operations.

To remain relevant, Starbucks has always embraced technology and incorporated it in its operations in relation to the demands of a given new market. Such advancements have been seen in the development of a prepaid card for customers (David, 2007, p. 7).

Competition has been increasing in different markets like Japan. This competition has been intensified as customers demand new experiences. Therefore, the company should cope up with competition as it is not in any capacity to control it. For example, it has consistently developed a broad new menu in Japan to remain competitive. This has seen it increase its stores to 700 (David, 2007, p. 13).

To keep off competition, it has also developed seasonal products to suit the needs of the market at that particular time (Bryant, 2009, p. 25). Starbucks has also had to contend with various political and legal bindings. An example is France’s arcane regulations and labor benefits.

One of the major risks that the company has faced is a saturated market. Though this has been witnessed in domestic markets like US and Canada, its effects have been felt in new and international markets. As much as it has more than 17,800 stores in 49 different countries, the company considers this as an upper limit of coffee shop saturation (Starbucks, 2010, p. 15).

For instance, saturation has also been witnessed in Japan where the effect of new shops has slowly worn off. To curb this threat, the company has continually renovated its stores and improved its services to remain strategic in the market (Bryant, 2009, p. 35).

Another source of risk is loosing customers. This is because the company offers very few options to different consumers. As a mater of fact, it has been importing its flagship products to new markets. As much as markets may be related, the company needs to develop products based on different tastes and preferences. This will protect it from losing customers who want new experiences (Bryant, 2009, p. 63).

The Generation X does not feel comfortable with Starbucks stores and this is a very big source of business risk in international markets. In this case, the company might end up facing a very hostile reception from its future customers.

As a matter of fact, they will be turned away by the power and image of the company’s well known brand. To solve this problem, the company should continually redesign its brand to make it more appealing to the youthful market (Michelli, 2006, p. 17).

Global expansion poses a big risk to the company’s international markets. This is because it makes less money from its overseas ventures. Such overseas ventures are operated in partnership with local businesses. In this case, the company should focus on a good strategic alliance that will increase its profitability.

For instance, it can embrace alliances in the acquisition of properties instead of partnerships (Michelli, 2006, p. 19). Great obstacles will also be seen in SRC and Ethnocentrism with local partners.

To solve this, the company can keep away SRC and Ethnocentrism from its decision making. There is another risk of employee disruption. In this case, there is a perception that most of the company’s employees are dissatisfied with their pay. Starbucks should therefore focus on new ways of reducing employee disruption to enhance service delivery in its stores (Michelli, 2006, p. 39).

The company has been making various loses because of an apparent mismatch between its customer expectations and corporate strategy. Although the company dominates the USA market, there are other states that don’t have a single Starbuck store (Starbucks, 2010, p. 25). This means that it has not paid attention to the whole market. The company believes that it can make many sales by increasing its stores every now and then.

By increasing its stores in domestic and international markets day by day, the company has forgotten to focus on its key mission of satisfying customer needs (Warner, 2004, p. 11). It should be known that the company can design and develop a new store in less than 16 weeks.

Starbucks has continually focused on the older generation thereby forgetting the Generation X (Bryant, 2009, p. 75). In this case, it does not have a differential pricing for the youthful market. For instance, some of them find it absurd to pay $3 for a cup of coffee.

The company has relied on franchising to expand its business outside United States and this undermines its strength in key domestic markets (USA and Canada). It is undeniable that the company is going global but its spending has not been matching its market status (Warner, 2004, p. 14).

Starbucks only spends 1% of its revenues on advertising unlike other major companies that spend 10% of their revenues. This poor spending ultimately negates its brand building initiatives outside USA (Bryant, 2009, p. 67).

Starbucks has in one way or the other created barriers to entry for other competitors through its somehow predatory real estate strategy (David, 2007, p. 18). This is not good in a free and competitive market and may attract a lot of dissents from customers and the community.

The company’ does not pay its workers well in relation to their workload. This has created a lot of dissatisfaction among employees. Apart from this, Schultz, the company’s chairman, has been making scathing comments that might affect its business in Muslim dominated regions (Michelli, 2006, p. 41).

The company can still improve its profits in Japan by repositioning its products and services. As a matter of fact, Japanese customers are less conscious about prices. More attention should be focused on the youthful generation as they have good growth prospects. Because there are many competitors in Japan, the company can either increase benefits or reduce prices to keep off intensified competition.

Japanese people are very busy and might not find enough time to visit Starbuck stores. In this case, it can introduce the US online system where customers will give their orders through the internet (Starbucks, 2010, p. 32).

In addition, it can also come up with an effective entertainment or cultural campaign to entice various Japanese youths. This will likely attract youths to the company’s stores. Extra activities can also be added to its existing product line to suit different market tastes. In this case, the company will be able to increase its profitability in Japan (Bryant, 2009, p. 31).

Starbucks has been increasing its global activities to expand its market beyond USA and Canada. This has seen the company establish its presence in more than 49 countries. Therefore, it has had to cope with the unpredictable and predictable elements in entering these markets. As much as it has more than 17,800 stores in 49 different countries, the company considers this as an upper limit of coffee shop saturation.

The company has faced various criticisms because of its overall corporate strategy. This should be effectively taken care of for enhanced sustainability. For instance, the company believes that it can make more sales by increasing its stores every now and then. Despite all these problems, the company can still remain profitable in its key markets like Japan by embracing good growth strategies.

Bryant, S. (2009). Everything but the Coffee: Learning about America from Starbucks . California: University of California Press.

David, R. (2007). Struck By Starbucks . New York: Forbes.

Michelli, J. A. (2006). The Starbucks experience: 5 principles for turning ordinary into extraordinary. New York : McGraw-Hill.

Pendergrast, M. (2001). Uncommon Grounds: The History of Coffee and How It Transformed Our World . London: Texere.

Starbucks. (2010). For business . Web.

Starbucks. (2010). Starbucks coffee Japan . Web.

Warner, M. (2004). Cup of Coffee, Grain of Salt . New York: New York Times.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2019, June 24). Starbucks – Going Global Fast. https://ivypanda.com/essays/starbucks-going-global-fast/

"Starbucks – Going Global Fast." IvyPanda , 24 June 2019, ivypanda.com/essays/starbucks-going-global-fast/.

IvyPanda . (2019) 'Starbucks – Going Global Fast'. 24 June.

IvyPanda . 2019. "Starbucks – Going Global Fast." June 24, 2019. https://ivypanda.com/essays/starbucks-going-global-fast/.

1. IvyPanda . "Starbucks – Going Global Fast." June 24, 2019. https://ivypanda.com/essays/starbucks-going-global-fast/.

Bibliography

IvyPanda . "Starbucks – Going Global Fast." June 24, 2019. https://ivypanda.com/essays/starbucks-going-global-fast/.

• Starbucks vs. Dunkin Coffee in Terms of Taste
• Strategic Planning of Starbucks Report
• Starbucks' Success: Mission and Stakeholders
• Comprehensive Strategic Management: Emirates Identity Authority Strategy
• Managing Business Strategy of Apple, Inc.
• Improvements of Supply Chain Processes in the Fast Food Industry: Subway
• Toyota’s Culture and Leadership Strategy
• Business Plan: Consultancy Services

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Report on: Case study- Starbucks – Going Global Fast

Related Papers

SKIREC Publication- UGC Approved Journals

The purpose of this research is to examine the effects of external environment pertaining to the marketing strategy of Starbucks, a coffee chain in Malaysia. An external environmental analysis has been conducted to examine the environment in which the company operates. These paper overviews several theoretical approaches to explore the strategic marketing planning process of the Starbucks Malaysia.

sujeet singh

Simpósio Brasileiro de …

silvana amaral

Abstract. This paper assesses the use of airborne videography, integrated to CCD/CBERS2 imagery to identify human population presence in a frontier region in the Brazilian Amazon. The study site comprises the road that connected the Xingu and Iriri River, in the state of ...

Manuel Tato

Polar character of shipbuilding sector converts to this industry in the motor -or, at least, in one of the principal motors- of the economy where it is implanted. Spain, because its geographical position, historically it has developed an industry linked with the sea and, then, shipbuilding sector is an industry with an important tradition, that has changed along the time to concentrate in concrete points of their geography. Among them, Galicia is the most interesting place, because the level of sales, employment and number of companies. In this site, this sector has suffered its worst situation since the 80's, forcing readjusts to acquire abilities in order to manage the tern quality-time-price, that they endow of competitive capacity to the shipbuilding factories to confront to their rivals. Then, we will analize the situation of shipbuilding sector in a worldwide and national level, to know the comparative position of the shipbuilding factories in Galicia, to infer their defi...

Jennifer Mays

Glasnik Etnografskog instituta

Marko Stojanović

Andre Barbosa

Frédéric Mauny

Due to human activities and changes in the environment, some ecosystems are acquiring the capacity to shelter major pathogens. Because environmental parameters such as climate, vegetation or land-use impact insect's bionomics, some vector and vector-borne disease distributions have significantly changed during the past years. Our aim was to study the conditions required for the settlement of a new vector in a new ecosystem, taking as example Culicoides imicola (Diptera: Ceratopogonidae), the main vector of bluetongue, in Corsica. The favourable environment for C. imicola was described using high resolution remote sensing and Geographical Information Systems (GIS). Factors likely to be related to vector distribution were extracted from a SPOT image (10 meters pixel) and from a digital elevation model (DEM). The normalized difference vegetation index (NDVI) was calculated and a supervised classification was carried out. Slope, altitude, and orientation of study sites were extracte...

Soil and Tillage Research

Raphaël Wittwer

Proceedings for Annual Meeting of The Japanese Pharmacological Society

gestina aliska

RELATED PAPERS

Audrey Louckx

Gerontechnology

Rogério Ferreira

Hector Colon

Frontiers in Pharmacology

Catherine Belzung

Journal of Information Processing Systems

ankit chaudhary

Christian Gray

Data in Brief

Enzo Pranzini

Hougelle Simplicio

Free Radical Biology and Medicine

Ana Denicola

Critical Care Medicine

Christopher Stowell

Nakita Gheller

I Jornadas sobre Innovación Docente en Arquitectura (JIDA'13), Escuela Técnica Superior de Arquitectura de Barcelona, 13 y 14 de Mayo de 2013

Álvaro Cuéllar

Journal of the American Academy of Orthopaedic Surgeons

Lisa Lattanza

Proceedings of 4th International Electronic Conference on Water Sciences

Iolanda Borzí

Rea Revista Eletronica De Administracao

Antonio Augusto Goncalves

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

More From Forbes

Howard schultz was right: takeaways from the starbucks interview.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

SAN FRANCISCO - A Starbucks cup is seen discarded on a newspaper rack July 31, 2007 in San ... [+] Francisco, California. (Photo by Justin Sullivan/Getty Images)

A CEO’s single greatest skill is communication. It is key to motivating your team, ensuring work is executive correctly, and effectively sharing information about the company with customers, shareholders, and the board. Unfortunately, Starbucks CEO Laxman Narasimhan demonstrated in a recent interview with Jim Cramer that he is sorely lacking in this department.

Speaking shortly after Starbucks reported slumping quarterly results , Narasimhan went on CNBC to try and explain the bad results. Not only did he fail to adequately explain the results—something which Cramer, always a tough customer, was quick to point out—he seemed to actively attempt to mislead viewers about the nature of the problems, the company’s trajectory, and how he intended to respond. It was a textbook example of exactly how the CEO of a major publicly traded company should not communicate about a tough quarter.

The interview was a disaster. The stock was dropping in real time as Narasimhan spoke, and the video tore through X and the internet afterwards.

It’s no wonder, then, that Howard Schultz, who spent his career building Starbucks into what it is today and remains its fifth largest shareholder , held Narasimhan to account in a LinkedIn post . Narasimhan’s failure on TV wasn’t just an insult to Schultz's many years of work and passion for the company, it directly affected his financial wellbeing, too.

Schultz explained the situation as well as anyone could have: “Ask any public-company CEO and they will tell you that ‘a miss’ is virtually inevitable, even at the best-managed, fastest-growing firms. It’s not the miss that matters. It’s what comes next. What’s the diagnosis of the problem? What’s the impact on morale? And what’s the strategy to fix it?”

‘Fallout’ Dethroned In Amazon Prime Video’s Top 10 List By A New Offering

New ‘escape from tarkov’ arg event adds encrypted flash drive loot, televisaunivision 2024-25 slate touts latino culture, vix growth, juanpa zurita, william levy deals.

This point is paramount. A CEO cannot simply stand up and repeat that they’re going to continue business as usual. Instead, they must present a compelling case that they either have a strategy in place—and explain why it will work—or acknowledge that there is a problem and they are building a strategy to take it on. The status quo doesn’t cut it.

Narasimhan’s failure provides us an opportunity to look at how CEOs can do a better job of communicating about tough situations.

Get in Front of the Bad News

Going into the interview, Narasimhan already knew that SBUX was struggling. Everyone else knew it, too, especially including those on Wall Street and Jim Cramer. Starbucks’ quarterly performance was in no way a secret. So, instead of trying to claim that the company was heading in a better direction than it was, he should have gotten out in front and started the interview by acknowledging the problems head-on. Before Cramer could even ask a follow-up question, Narasimhan should have explained what the problems were at Starbucks, why those problems existed, and what he was going to do to fix them.

It’s very simple: What happened and what are we going to do about it?

By being upfront and proactive about communicating the basic facts, a CEO demonstrates good leadership: They are aware of the problems, they’re going to be honest with shareholders and customers, and they are actively engaged in problem solving. Even if you haven’t figured out a solution yet, just say that you need more time to work on it. But don’t act like the problems aren’t real. Ducking the basic facts, especially negative facts, simply makes a leader look disingenuous and causes people to trust them less.

No Matter What, Be Authentic

In advance of earnings calls, especially when the results aren’t stellar, a CEO’s communications staff will be hard at work figuring out how to spin those results and paint them in the best light. This is their job, and it can be helpful as a CEO thinks about how they want to communicate about the results. But this is an exercise. At the end of the day, the CEO has to own the words coming out of their mouth.The CEOsets the standard for communicating with the public.

No matter what, a CEO needs to make sure what they’re saying feels like its coming from them naturally, rather than being fed talking points. Narasimhan, unfortunately, appeared to have learned the lines really well without truly understanding how the way he was talking about Starbucks might not be convincing to the audience.

CEOs must appear to be credible for investors, analysts and journalists to take them seriously. Speaking inauthentically—in a way that doesn’t sound natural and like you—works against that.

Understand the Purpose of the Interview

It’s easy to get wrapped up in the minutia of earnings, and the failures that led to a bad quarter. That truth has to be communicated to the public. However, the numbers, the information, is typically already available in various filings and reports. No one watches a CEO interview to learn about raw facts. Instead, they’re looking for clues about how the CEO plans to handle the problem. They’re looking for clues about that person’s character. Ultimately, they’re trying to decide if they trust this person to right the ship.

This means that a CEO’s job during these interviews is to communicate trust and humbleness and to take responsibility for what happened and for finding a way through it. Six weeks after the interview, no one will remember exactly what was said, but they will remember if they liked or disliked the CEO. They will remember if they trusted them. So, rather than trying to spin the facts or argue that things are better than they seem, the CEOs job is to demonstrate who they really are. If they can do this, the interview will be a success, regardless of whether the quarterly results are incredible or terrible. Trust, credibility, and clarity are the most important takeaways for an audience.

Your Shareholders Aren’t Stupid

Narasimhan failed on all three of these counts. He tried to bury the bad news, came across as inauthentic and disingenuous, and seemed to think that his job was to win an argument with Cramer, rather than demonstrate to the public that he could be trusted with the fate of Starbucks.

Schultz, and all the other Starbucks shareholders, shouldn’t let up until they get some good answers from Narasimhan. Maybe he’s just not good on TV. But right now, all anyone knows is that he didn’t instill confidence in them.

• Editorial Standards
• Reprints & Permissions

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

• False or intentionally out-of-context or misleading information
• Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
• Attacks on the identity of other commenters or the article's author
• Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

• Continuous attempts to re-post comments that have been previously moderated/rejected
• Racist, sexist, homophobic or other discriminatory comments
• Attempts or tactics that put the site security at risk
• Actions that otherwise violate our site's  terms.

So, how can you be a power user?

• Stay on topic and share your insights
• Feel free to be clear and thoughtful to get your point across
• ‘Like’ or ‘Dislike’ to show your point of view.
• Protect your community.
• Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.

Starbucks Going Global Fast Case Study

Case study: starbucks – going global fast.

• Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.

According to the description of the case study there are different controllable and uncontrollable elements in different countries for Starbucks (Cateora, Graham & Gilly, 2013). In Japan, there are two main uncontrollable elements that are faced by Starbucks. First is the competition between it and its rival shops in there. The competition is tough and it is not a factor that can be controlled by Starbuck in an outside country. The second is the economic depression that exists there.

In Italy Starbucks is facing some controllable elements. The price in Italy is an issue. In America the price for a coffee is 1.5 dollars while in Italy the price varies between 55 and 67 cents which is much cheaper than what Starbucks would really want to charge its customers. In addition to the price issue, Italian coffee bars also offer Italian food which is struggling with at the moment. Having said that, Starbucks can still control this situation and introduce some competitive prices. They can also make some arrangements to offer food alongside coffee at their coffee houses.

In Vienna, Starbuck faces some uncontrollable elements. The first is the culture of Vienna that is totally different than USA. But it has also been mentioned that the youth of Vienna is always welcoming to new things so Starbucks may look for their chances in this regards. They might want to reach out to the youth and introduced their coffee and try to win over these youths from the already existing coffee shops. These youths may be attracted to Starbucks due to the fact that they are new in the market.

• What are the major sources of risk facing the company and discuss potential solutions.

There are many risks that are faced by Starbucks. The first is the issue of saturation. They have had a great presence in the US and international market and they might have reached the maximum number of outlets that they should have. They have more than 4000 outlets in the world which is too many. This

Another risk that has been discussed in the case study is the fact that they worry about losing customers. The reason behind this fact is that there are only a few options available to the customers on Starbucks menu. They might need to expand their menu a bit to attract more customers and retain the already loyal customers. This issues can be addressed by focusing more on increasing the quality of the product and not just the number of the outlets that are there. In the global market there is still enough room for them and they can expand for some time before reaching the upper limit in my opinion.

The third risk that has been discussed is case study is that global expansion is not making the expected profits for Starbucks. They have to partner with other businesses and people in the international market to be successful. This would mean a sharing of profit with these individuals or businesses. This could make the whole idea of expanding internationally useless for Starbucks in my opinion. It is a fact that businesses want to expand to generate more profits not to decrease their profit margins and share the profits with others. This issue can be overcome by an efficient adjustment of SRC and keeping it away in business decisions making. Another factor that should also be controlled in the business decision making is the ethnocentrisms while expanding to international markets.

• Critique Starbucks’ overall corporate strategy.

There is no doubt that Starbucks has been really successful in the US market for some time now. But now they are facing losses due to the lack of proper corporate strategies.  There is a gap between the customer expectations and a business strategy. A gap between consumer expectation and the overall business strategy has been reported to cause a mistrust between the customers and the business they are involved with (von, Nitzko, & Spiller, 2015). In my opinion Starbucks may not have their customers as a primary concern when they are making their business strategies.

The other issue that I notices is the fact that Starbucks has an extreme focus on some states in the US while other states have no Starbucks. For example Montana and N.D does not have a Starbucks yet. The customer targeting also needs to be re-evaluated as Starbucks is currently focusing only on the older generations with a non-differential pricing strategy.

Starbucks may also look into their advertisement spending which is extremely low. They are only spending around a 1% of their total revenue on advertisement. They might need to increase this spending to more or less 10% as this is what other companies are doing to build their brand in the overseas. Starbucks marketing and advertisement strategy needs to be more aggressive than what it is now. They need to reach out to more customers inside the US and outside of it. They also need to reach out to the younger generations and not just the older citizens to expand their customer base.

• How might Starbucks improve profitability in Japan?

Japanese people are less conscious with the price they have to pay for a cup of coffee. They are more concerned with spending their time in an efficient manner and are not that much aware about spending time on leisure activities. They also seem to be interested in learning English. What Starbucks can do to increase its profitability in Japan is introduce an online ordering system that would make it possible for the Japanese citizens to order a Starbucks coffee online. This will save them time and let them have a cup of coffee while working.

Japanese can also be attracted by different cultural events at Starbucks. For example they can arrange some events to introduce English language to the Japanese youth. This would definitely attract them to Starbucks. This could prove to be an effective way to reach out to more Japanese customers.

Related Posts

Privacy Overview

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

• Privacy Policy

Starbucks Case Study Solution

Global market is immensely accumulative now a days, with the vigorous effects of globalization which effecting firms of all breeds to expand the business across the borders. This report is generally bases on the answers to the provided case study of Starbucks growth story and its international expansion plans. Starbucks being the producers of one of finest coffee and premium drink beverages manages its major markets within USA and abroad. The report will accumulate Starbucks potential strategic options with substantial vision of the management to expand business internationally while understanding the escalating aspects of ethical and cultural values which Starbucks owns as an influential organization.

Introduction

This report is ultimately based on critical analysis and evaluation of the case study provided for one the leading coffee and Beverages Company. With the expanding international business and continued globalization policy of Starbucks, this report will help to comprehend the various International market strategies and options, ethical and cultural values and anticipated problems with the ongoing international expansions of Starbucks Company

Identify the Controllable and Uncontrollable Elements:

Some controllable elements in any global markets are the product, the price, the place and the promotion. Starbucks used benefits of their quality in their product directing the promotion. Starbucks used benefits of their product as high end. Their product holds a sweeter taste and may not be liked by international has to research the place where they want to globalize. Starbucks chose many overseas companies like japan, Italy, Spain and Germany. They also considering moving into Mexico and Rico. With each of the place that they wanted to expand to, they had to think about Factors such as their target market and there. With having problems with their brand in 2001, they vowed to move on from the mistakes from the past but say it’s difficult with overseas and local partners.

Also Study: Starbucks Marketing Strategy Research Article

Some elements that are uncontrollable environmental factors such as social factors, legal matters, political standpoints and competitors. Having to expand in other countries, Starbucks had to face local competitors and locals who stay loyal to their local brand, even though Starbucks often came across as mystified and cool, they have Struggled to get a new customer base. Other factors such policies and regulation were thoroughly studied by Starbucks to maintain their brand and not portray the unsatisfied service.

The major sources of Risk facing the company and Potential solutions for major risk and problem are:

The major Risks that the company face is saturating the market, competition and regaining the capital used after development. Saturating the market is also a huge risk for any company who is trying to grow and expand their business. Starbucks realized that they were saturating the U.S. market so deciding to globalize was the step of the right direction. Competition is always going to be right next door, Starbucks on many occasions had to compete with look likes internationally which is harder to be do because that look like is already they are set up in market.

Critique Starbucks Overall Corporate Strategy:

Starbucks into an already existing Starbucks. Competitors are it to be difficult to compete with broaden their brand even with the difficult economy. Starbucks has one products that they have to sell in many ways as coffee. Which they proven they can by improving the service, entering in specially drinks and having others thinks to go with coffee. Although Starbucks has Starbucks with the food aspect in various locations, they now have merchandise as well a selection of food. Starbucks has taken advantage of growth rate of business in china, whereas the U.S is saturated and has a smaller growth rate. Starbucks has a corporate Strategy of improving theme self of their quality, service and most of the important consumers. I think that the price of Starbucks cannot be moved because of the it is assumed that Starbucks is higher quality.

Starbucks Improve Profitability in Bangladesh:

To improve in Bangladesh, Starbucks has to be more than brand to boost sales. There are some competitors in Bangladesh. So look likes which to local or international company are here. Starbucks has a need strong, large can coffee market which Starbucks can utilize. Starbucks need to focus on more of their quality and taste to appeal in Bangladesh. Starbucks has a adapt to Bangladesh and might to have to change a few to improve their taste appeal to Bangladesh, they do might do a product invention.

Inventing a new product shows that you are willing to appeal to their need and will be appreciative along with your company among customer. If inventing a new product is too much, adapting the product cloud work work batter by changing the ingredients to smooth the taste to be sweeter for Bangladesh. What Bangladesh country believe culture. Consumers relate to companies who do more the people than profiting the most idea marketing well as to consumers. They would to know what the company is doing help locality. So I think if Starbuck should take this strategy and solve in that way must they improve and success.

CONCLUSION AND RECOMMENDATION

By concluding and answering the case study questions from Starbucks Grow story, it is fathomable fact that Starbucks as a successful organization can be an influential mark to follow for the other firms. Exclusively the standout believe and dedication of the top management to put in their vital trust and support to employees of all levels, culture and race. The flamboyant working environment and social foundations are the benchmark of the company which can be positively imitative by the uprising organizations in order establish the core competence of the company from scratch.

A overview case study _ “ Starbucks – Going Global Fast ”

Also Study:

Starbucks Company Analysis Research Paper

The Effectiveness of The ERP system at Starbucks | Weakness & Benefits

Green Mountain Coffee Roasters Brews up the best Marketing Strategy

Related Posts

A case study on sustainable building, suspicious behaviors of malware in android, how epa links with the superfund in new..., nokia case study analysis, importance of public spaces in a neighbourhood of..., community based tourism in uganda and tanzania, mount st. helens hazardous simulations, the contradiction of homosexuality, walmart cross-cultural issues case study analysis, case study on leadership and management, leave a comment cancel reply.

Please enter an answer in digits:

• No category

CASE 11 Starbucks Going Global Fast

Related documents

Add this document to collection(s)

You can add this document to your study collection(s)

Add this document to saved

You can add this document to your saved list

Suggest us how to improve StudyLib

(For complaints, use another form )

Input it if you want to receive answer

• Election 2024
• Entertainment
• Newsletters
• Photography
• Personal Finance
• AP Investigations
• AP Buyline Personal Finance
• AP Buyline Shopping
• Press Releases
• Israel-Hamas War
• Russia-Ukraine War
• Global elections
• Asia Pacific
• Latin America
• Middle East
• Election Results
• Delegate Tracker
• AP & Elections
• Auto Racing
• 2024 Paris Olympic Games
• Movie reviews
• Book reviews
• Personal finance
• Financial Markets
• Business Highlights
• Financial wellness
• Artificial Intelligence
• Social Media

Starbucks lowers guidance, promises new drinks and deals after customer traffic fell in weak Q2

FILE - Starbucks sign hangs outside a casino along Main Street Wednesday, Sept. 20, 2023, in Deadwood, S.D. Starbucks will reports earnings on Tuesday, April 30, 2024. (AP Photo/David Zalubowski)

• Copy Link copied

Starbucks lowered expectations for its full-year sales and profit Tuesday after a disastrous quarter that saw a slowdown in store visits across the world.

The Seattle coffee giant said revenue for the January-March period dropped 2% to $8.56 billion. That was far short of Wall Street’s forecast of $9.12 billion, according to analysts polled by FactSet. It was the first time since the end of 2020 that the company saw a drop in quarterly revenue.

“Our performance this quarter was disappointing and did not meet our expectations,” Starbucks CEO Laxman Narasimhan said during a conference call with investors. Shares in Starbucks Corp. tumbled 12% Tuesday in after-hours trading.

Starbucks said a mix of issues impacted sales. In the U.S., the company saw a sharper and faster decline in consumer confidence and spending than it had anticipated. The Conference Board, a business research group, said Tuesday that U.S. consumer confidence fell for the third straight month in April as consumers continue to confront elevated prices and high interest rates.

Bad weather also closed some U.S. stores briefly during the quarter, Starbucks said.

In China, Starbucks said the post-COVID recovery has been choppy, and it’s also seeing increasing price pressure from competitors.

Starbucks is also facing ongoing boycott of its stores for its perceived support of Israel in the war in Gaza. Customers in the Middle East and elsewhere began boycotting the brand in the fall after it sued Workers United , the union organizing its workers, over a pro-Palestinian message posted on a union social media account.

Starbucks has said that the lawsuit was aimed at stopping the union from using the company’s name and logo, which it says confuses customers. Starbucks and the union have paused the court case and are now in mediation. But the company has also taken steps to undo the damage. Last month, Starbucks donated $3 million to World Central Kitchen to provide food aid in Gaza.

Starbucks said its same-store sales — or sales at stores open at least a year — dropped 4% in its fiscal second quarter. Wall Street had expected a 1% increase, according to analysts polled by FactSet.

In the U.S., customers spent more per visit, but that wasn’t enough to overcome a 7% decline in transactions. In China, the company’s second-largest market, same-store sales plunged 11%.

Starbucks said it now expects full-year same-store sales to be flat or fall by single-digit percentages, down from growth of 4% to 6%. It also said it expects full-year revenue growth in the low single-digit range, down from 7% to 10%. It’s also forecasting flat to low-single digit earnings growth, down from 15% to 20%.

Narasimhan said Starbucks will try to boost U.S. store traffic this summer with new drinks, including the brand’s first energy beverage. Later this year Starbucks plans to introduce sugar-free customization options for most of its beverages, another effort to draw in customers.

After a successful pilot, the company plans to start offering overnight service in many markets, Narasimhan said. And it’s trying to improve product availability and service speed. Narasimhan said Starbucks lost some customers because of short supplies of its potato, cheddar and chive bakes after introducing them earlier this year.

Narasimhan also said Starbucks plans to open its Starbucks Rewards app to non-Rewards customers in July so they can take advantage of the deals it offers. Narasimhan said that change is aimed at occasional customers whose visits to Starbucks dropped off during the last quarter.

“In this environment, many customers are being more exacting about where and how they spend their money,” Narasimhan said. “We need to be able to reach and communicate with our customers in a way that demonstrates our value.”

Starbucks’ net income dropped 15% to $772.4 million, or 68 cents per share. Wall Street had expected an 80-cent per share profit.

Starbucks’ comments were echoed earlier Tuesday by McDonald’s , which also reported lower traffic in key markets like the U.S. and the United Kingdom as inflation-weary customers eat out less often. Like Starbucks, McDonald’s said it plans to boost deals and messaging about product value.