A case report: Starbucks
International Strategy – 3PE672
Martina L. Jakl, PhD
Strategy choice for Czech market and building a loyal customer base
As mentioned in the case Czech restoration market is attractive and also a gateway to the rest of CEE area. Starbucks sees CEE area, and especially Prague, as a potential future market where the growth for the firm can be obtained, since the western markets are nearly saturated. However, in order for Starbucks to build a loyal customer base in Czech Republic it needs to make certain choices. Historically, pre-empting the market has been their strategy. Now they are facing problems with this strategy, especially because of the crisis.
For Czech market the main problem is the peculiar consumer behavior and tastes. Should Starbucks create a market in Eastern Europe for American way of having coffee as it has done so far or should it be more locally responsive? If they intend to create the market, it will take time. But how much time is allowed? If Starbucks decides to adapt, is it endangering its original business model, but getting a short-term win.
On the other hand how to get Czechs who are used to going out to a Pub for beer to go to Starbucks to have coffee. The change of pub culture can consume a lot of time. In addition, Czech coffee drinkers are used to going to small coffee shops instead of chains. So if Czech customers are used to going to small local coffee shops and not to expensive and chain-driven coffee shops like Starbucks, there remains the question whether there will be a change to this trend or is Starbucks only for tourists?
The pre-emptive strategy which Starbucks has been using is...