Starbucks: Going Global Fast

925 Words4 Pages
1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. Controllable In Italy: Price (Italian coffee bars prosper by serving food as well as coffee, an area where starbucks still struggles. Also Italian coffee is cheaper than US java say, Italian purists, much better. Americans pay about &1.5 for an espresso, on the other hand northern Italy the price is 67 cents, in the south just 55 cents. Uncontrollable In Japan: Competition among rival shops in Japan and the economic depression. In France: Political and legal bindings. (France’s arcane regulations and generous labor benefits). In Vienna: Culture (young are always enthusiastic about new and they embrace the new. So,…show more content…
But its spending does not match with its status. Starbucks only spends 1% of its revenue as advertisement; Whereas most companies its size spend at least 10% revenue. Low spending on advertisement hampers Starbucks brand building outside the USA. *By aggressive marketing strategy they have created entry barrier for the competitors through predatory real estate strategy. *They have focused on the product concept which myopic attitude in making corporate strategy. *Starbucks pay does not come close to match the work load of their employees that created dissatisfaction among them affecting sterling service and even the coffee itself. *Schultz should be more cautious to various cultural and ethnic affairs. As a Chair of Starbucks and having market in Muslim dominated regions, he can not make any scathing comment against Palestinian. 4. How might Starbucks improve profitability in Japan. They should reposition their product and service. The Japanese are less conscious about the price. According to the present cultural trend in Japan, younger generation is inclined towards spending their time in a constructive manner. The source from internet says that the Japanese youth have very less time for their leisure. Besides sipping a cup of coffee in a coffee shop they love to learn English Language, even they do not hesitate to spend ¥1,500 in an internet café just for sleeping. *Starbucks and its competitors in Japan are providing the same fare. As a result,
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