This case is mainly discussing about the history of the company Starbucks and how it went from being a small coffee shop in Seattle to expanding not only domestically but globally. It is now one of the largest chains of coffee and one of the fastest growing brands. It has expanded globally very quickly to many different countries including Japan which in this article it discusses about the competition that they face because they have others copying their products. As a guide, use Exhibit 1.3 and its description in Chapter 1, and do the following:
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Starbucks has encounter many controllable and uncontrollable elements entering global markets. The controllable elements have been price, place, product, promotion and channels of distribution. Starbucks’s international market has to adjust prices of their products with the current foreign currency rates due to the fluctuations in world currency rates. The uncontrollable elements have been geography and infrastructure, competitive structure in Japan, competitive forces, and cultural forces. The fiscal and monetary policies may change in any foreign country.
2. What are the major sources of risk facing the company? Discuss potential solutions. Major sources of risk facing Starbucks are as they continue to expand employees are feeling less valued and could cause higher employee turnover rates. This could also affect the overall customer service and value of the product to decrease. A possible solution to this would be to improve the management team by training more and improving the
3. Critique Starbucks’ overall corporate strategy. Starbucks’ overall corporate strategy could be criticize in the aspect of advertising their products. According to the article they do not invest a lot of money to advertise their company. They only use advertising when they want to introduce a new product to the market. If they did take more time in advertising they could keep the product up to date and not make the target market switch to any competitors quicker.
4. How might Starbucks improve proﬁtability in Japan? Starbucks might improve profitability in Japan mainly because it’s entering its largest international market. Getting in the popular business of bottled drinks rather than the made to order from cafes. Attracting its major target market Starbucks can compete with its competitors by keeping an innovative product hard for competitors to copy. Even though there are many already copy Starbucks products Starbucks needs to maintain a valuable product and make the Japanese market loyal to them.