How did Starbucks reduce the ‘distance’ vis-á-vis host countries? Starbucks has used various tactics to reduce its distance from foreign markets. To reduce cultural distance, Starbucks has conducted extensive research in each country, using focus groups and quantitative analysis, to evaluate local cultural sensitivities and preferences. To reduce economic distance, Starbucks has expanded primarily into developed countries. In developing countries, it has focused on major cities first and only later expanded into smaller cities when confident that the smaller cities had consumers with the necessary disposable income.
• Compare to international market, North American consume coffee out of home averagely higher than most of the countries. The values Starbucks provides to its customers are: • Starbucks gives customers a central point to relax, read books and meet friends • It became a gathering place for neighbors • Starbucks being as a third place away from home and work for friends circles and co-workers teams • An experience of uplifted, pleasant and diverse for customers to spent time 2. Starbucks market entry strategy were generally joint ventures and licensing agreements. • From Austria to Taiwan, Starbucks connected locally with best possible partners as joint ventures and they set forward basic strategies expectation from its possible partners. Such as financial solvency, knowledge of local market conditions, prior retail experience, and creative ability.
The logo and its color were changed. What was their source of equity? Answer: Starbucks deals with brand equity by always taking the future into account. By this I mean that they switched from selling coffee beans and equipment to being a coffeehouse which got everything started. Starbucks deals with customer equity by having highly trained as well as skilled employees.
ACTION PLAN | ASSESSMENT CRITERION | BODY/CONTENTS – COURSE OF ACTIONS | Analyze and discuss the primary and secondary stakeholders of Starbucks | * Introduction of the Starbuck Coffeehouse Brief history – Group founder, presence in different countries , company profile – Including mission and vision(Source: http://en.wikipedia.org/wiki/Starbucks) * Analyze and extract relative primary and secondary stake holders of Starbucks (From case study and also from following sources:http://www.starbucks.com/responsibility/sourcing/store-productsWho are the primary stakeholders and secondary stakeholders for Starbucks?What are their influences on Starbuck? E.g. : Suppliers – secondary stakeholder: - How can suppliers being a secondary stakeholder help in creating and reinforcing a positive image about Starbucks? E.g. : Competitors : Competitors (Alterra Coffee, Caribou Coffee, etc.)
Case 1.1 Starbucks – Going global fast The key aspect of Starbucks case is entering new markets. As said in the case, they’ve met few challenges – some positive and some negative – which included mostly legal requirements, local and global competition presence, coffee prices on potential markets as well as the brand perception and cultural differences. What is important in the case is the aspect of glocalization – think global and act local. Starbucks expansion was in fact the answer for local market oversaturation and growth strategy. Mostly, entering new market Starbucks counted for its reputation and in fact its marketing-mix was only slightly adjusted to specific cultural aspect of new markets.
The other is political issue of supporting wars in Israel and their American armies. Using other theoretical analysis to examine the issues, the report further supports findings and implication based on the issues. In the end, this reports also shows the opinion to improve for Starbucks. 2. Social Issue: Trademark for Ethiopia farmers 3.1 Argument between Oxfam and Starbucks Starbucks blocked Ethiopia to apply trademark for their coffee beans.
STARBUCKS AND JAPAN ‘I think that the largest challenge we face, is the availability and accuracy of data.’ Discuss. Starbuck’s was first established in 1995 as there was a joint venture between Sazaby league and Starbuck’s coffee international, to open a store in Japan. Japan is a big country therefore it is difficult to research on the whole country and the potential they have for the coffee market. GIS technology can help access data to a certain extent, it can help retrieve data such as, changes in population, road and rail locations, so they can plan the locations of the stores, however this does not help when trying to segment the coffee market as it does not tell us what age, and what gender drinks more coffee. Although GIS technology is very accurate in helping to locate more stores.
Starbucks 1- Where did the original idea for the Starbucks format come from? What lesson for international business can be drawn from this? In the spring of 1983, when Howard Schultz (Marketing Director of Starbucks in those days) went to Milan, for an international housewares show, he was inspired by Italian coffee bars and their unique characteristics. He discovered that Starbucks as a locally successful company is missing the key relationship with its customers in contrary of Italian coffee bars, which for them; serving coffee is not just selling a product to an unknown customer. He decided to re-create the Italian coffee bar culture in America, to change Starbucks into a place, which makes a great experience, not only a great retail store.
1. Identifies the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. There are some controllable and uncontrollable elements that Starbucks is facing in entering global market. The controllable factors are known as the internal forces, are things within a business can control or generally are the marketing mix by 4P which consists of Price, Place, Product, and Promotion. Whereas, the uncontrollable factors are known as the external forces, are things that are beyond the control of a business, where are economics forces, competitive forces, cultural forces or political/legal forces.
The Future of the Starbucks Starbucks is a familiar brand to us, especially to the coffee fans. Starbucks tells us “to live like tasting coffee”. Are there any advantages and disadvantages in the business operation? Can it keep advanced in the fierce competition nowadays? In order to compound the problems, we will utilize the VRIO framework to do analysis.