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Case Study

Good Essays

Case A-7: Starbucks—Going Global Fast

Description of challenges
The major challenges facing the decision maker, Schultz, include the following: the challenge of the fast saturating U.S. market (Going Global Fast, n.d, p. 2). According to analysts, in two year time, Starbucks will have saturated the U.S. market. This will lead to stagnation or slow growth in sales and reduce the effect of increased sales per new stores opened. For instance, in Seattle, Starbucks has a café to serve every 9400 people; a number considered to be the upper limit of the coffee shop saturation. The challenge of 30 percent self-cannibalization a year as Schultz admits, where blanketing an area with new stores to dominate market culminates to cutting sales at …show more content…

Even though the use of local operators makes it easy to enter new markets, it lowers profitability from overseas stores. Increasing the number of stores will result to increased profit products from overseas market by virtue of the multiplication effect. That is, 20 to 50 percent multiplied by a large number of outlets gives a larger figure.
Implementation program

Key Activities
Timing
Resources
Evaluation
1
Market research on meals preferences
3-4 weeks
Finances to fund outsourced research services
Identify meals/recipes for specific categories of the market population.

Pilot test of meals sales in 3 different outlets
2-3 weeks
Recipes/meals
Determine level of meals sales per outlet.

Official introduction of the meals in Starbuck outlets
2-4 months
Recipes/meals and compliments such as utensils.
Performance level of the project in terms of sales revenues from meals.
2
Training of employees

1-3 weeks (at intervals regularly)
Training materials and finances to fund external trainers
Level of performance improvement in terms of productivity after training.

Introduce team building sessions
1-7 days
Playgrounds, meals and drinks, games, transportation.
Level of improvement in communication across the company structure.

Increase basic compensation and introduce bonuses
2-6 months
Increased finances allocated to compensation.
Evaluate the level of motivation

Increase number of employees
2-6 months
New employees and more finances for recruitment
Reduced

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