Starbucks Risk Assesment

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Contents 1. Launch of a new product/service 2 1.1 Flowchart for launch of a new product/service 2 2. Reasons for a Failed Product Line 2 2.1 Adverse Environment Conditions 2 2.1.1 Industry Competition 2 2.1.2 Political Implications 2 2.1.3 Economic Events 2 2.1.4 Evolving Social Factors 2 2.2 Error in forecast of consumers’ response 2 2.2.1 Incomprehensive Market Analysis 2 2.3 Ineffective Product Launch 2 2.3.1 Wrong Timing 2 2.3.2 Unprofitable Product 2 2.3.3 Inadequate Support 2 3. SWOT Analysis 2 3.1 Strengths 2 3.1.1 Wide range of products sold through numerous locations 2 3.1.2 Strong Brand Equity 2 3.1.3 Excellent Research and Development capabilities 2 3.1.4 Relationships with established…show more content…
These partners include not only food scientists from the R&D team but also the environmental impact manager. This ensures that ideas which seems feasible to the R&D team will also incorporate sustainability into all aspects of its operations. By doing so, Starbucks would ensure that new products will sell well and at the same time fit in with the company’s image, vision and strategic objectives.
The third step would be concept development and testing which will require formal evaluations of the product concept by consumers, usually through some form of marketing research. At Starbucks, in testing new products, extensive in-house taste-testing and research done via focus groups are carried out. At each focus group, participants “taste it, grade it and then tasted it again” to ensure effective and accurate results.
From here, ideas which are selected will then be analyzed for its marketability and costs. This is referred to as the business analysis stage whereby both market and product analyses would be carried out. The market demand would be determined and the feasibility of production would be assessed. However, should sales price set be unable to cover the production cost, the idea would be discarded as it would not be economically viable.

For ideas approved thus far, Starbucks will first gradually launch these new products to a selected market. This test in an actual market is a step
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