1. Case study: Starbucks-going global fast
1. Identify the controllable and uncontrollable elements that Starbucks has encountered
in entering global markets.
At all times, there are some elements occurred to be an uncontrollable elements to Starbucks
organizationitself inenteringglobal market.The political,economyandcultural issuesinthe foreign
countriescanoccurred at any time(sudden) andtherefore, these are few elements which take into
consideration when Starbucks trying to adapt into the foreign market. At any time, the foreign
countriesgovernmentsmaychange theirfiscal and monetary policies which caused sudden change
in Starbucks operation and with so, this given a big impact on Starbucks. As an example, during
economic depression country like Japan, revised in customers' income and pulled down which
caused Starbucks in losing instead of gaining profit or sales due to the coffee pricing. Besides, the
increasingcompetitionamongrival shops in and natural disasters like SARS, H1N1, and etc disaster
Japan might put Starbucks in risky business development. Fluctuations in world currency rates are
one of the factors when Starbucks transform their profit to their home base market currency. In
country such as France, Starbucks have to adapt into France's regulations and generous labor
benefitswhichislegal andcompulsoryin order to enter into France market. In country like Vienna,
their culture is different from any other country and this is due to the high number of young
population who are always enthusiastic about the new things which appear around them and
embrace the new.Therefore,the expansionsof business of Starbucks in Vienna tend to be positive
advantages.
Controllable elements altered in the long run business in the foreign market. In common, the
controllable elements usually are the marketing mix (4P's) which consist of price, place, products,
and promotion.These elementsface the same problems or almost similar with Starbucks domestic
market. As the name - ‘STARBUCKS' and its logo can be adjusted in order to adapt into one cultural
tastes and expectation. Pricing of their products are reasonable with the foreign current rates and
alsotheiroverall countryincome. The progress of market research is to understand and determine
the right international locations which can fit in Starbucks products. Besides providing foods and
drinks,Starbucksalsoprovide the experience for customers in all around the world. As an example
inChina,customersinthiscountrypreferto have tearather than coffee.Inthiscase, Starbucks have
to adapt into their country's culture and thus originated some other drinks which can fulfill the
needs and demand for customers in China.
2. What are the major sources of risk facing the company and discuss potential solutions.
One of the risks is due to the limitation products choices which restricted the business growth and
customersmayget boredof it andtendto switchto others.Secondly,the marketconcentrationsare
more to United State and Canada. Back to 15 years ago, 17 coffee shops in Seattle grown to over
16,000 outlets in 44 countries and amazingly, over 11,000 stores scattered across the United State
and Canada itself and there are only 8 states with no Starbucks stores.
Therefore, as Starbucks going abroad, they should focus not only to their core products but also
findingwaystoimprove the qualityof theircoffee andalsothe servicesas well as the environment.
Bringing in some other new products helps in fulfill the current demand help in business growth.
Market saturation in United State and Canada can be overcome when Starbucks put more
concentrationintotheirinternationalmarketinsteadof theirdomesticmarket.Besides, by avoiding

2. self-reference criterion (SRC) and ethnocentrism during decision making will not influence an
evaluationof the appropriatenessof adomesticallydesignedmarketing mix for a foreign market. In
otherwords,properfine-tuningare neededsothatlessmistake whichcancostthe chances of lostin
profitability, reputation and also trust by customers can be minimized.
3. Critique Starbucks' overall corporate strategy.
Starbucks saturated their market in United States. However there are still frappuccino-free cities
whichincludedButte,MontanaandFargo, North Dakota. This is because the saturation in big cities
and the more outletsinbigcitieswill help in increasing the sales but without maintaining the good
servicesandmeetthe demandin the current market, the ideas are just wrong to be adapted in the
global corporate strategy.
Like any others brand such as McDonalds who is one of the strong competitor of Starbucks in
Malaysia came out with ‘special' menu with price and quantity differentiation which is mainly for
kids' meal. These are likely to attract and widen their target market where by customers feel that
this will be much more reasonable and the importance of them to McDonalds. Starbucks not only
must put more concentration on their adult target market, but also have to care for the kids who
might be following parents there for a break or accompany parents for coffee sipping.
Some other issue which appear to be mismatch where Starbucks only advertise with one percent
spending of its profits. Low expenditure on advertisements are likely to slow down the brand
building of Starbucks in foreign market.
4. How might Starbucks improve profitability in Japan?
If were to compare, customers in country like Japan and China, Japanese who are customers of
Starbucks are less likely to be aware about the pricing due to their rich country. Once the products
satisfiedthe needsof them,theyare likely to stick and thus it eventually created product loyalty in
customers.Forthat reason,Starbuckswere have to conscious in things like the strategic location of
the stores,whetheritconveniencescustomersandeasilytobe findor not.The locationisone of the
importantfactors.Secondly,Starbuckswere have tocreate the environments where customers can
spend most of their time at the same place in comfort, supply WIFI system where everyone can
online fortheirownentertainment,studiesorevenspaces for business discussion. These are likely
to generate friendly environment where the target market will be widen.
Due to the rival shops competition in Japan, Starbucks would have to study the pricing of their
coffees products so that the price of a cup of coffee and the environment will be reasonable and
customerswill feel the worthinessratherthanfeelingexpansive andswitchtoanyothercompetitors
of Starbucks in Japan market.