Starbucks Going Global Fast

Starbucks Going Global Fast

1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.

To enter a global market, it is likely to face controllable and uncontrollable elements. The Starbucks organization is no exception to these items at the time of entering the global market. Among the controllable elements we have characteristics of companies, product type, pricing of products, the amount of research, promotions and distribution channels. Uncontrollable elements that affect Starbucks are competitive, national and international structures, levels of technology and different cultural differences. First we has controllable elements they offer hot and cold beverages, pastries, snacks, etc. they adjust they price or charge a premium price for their products taking in account the country, with the promotion of his name they have the advantages that the company has a good brand name in national market that help be well- known in international market. They control also the innovation of automatic espresso machines to increase the speed of service and it has also offered the prepaid card which clerk swipe through a reader to deduct a sale, thus the company cuts transaction time in half this was develop in 800 locations.

The issues of political, economic and cultural in foreign countries can be sudden and therefore uncontrollable elements that must be taken into consideration and carefully monitored upon entering a foreign market. In addition, the increased competition is another uncontrollable element also present in foreign markets like Mc´Cafe. This competition from rival shops out of potential benefits and increases the risk of development of business of Starbucks in the external market, as Japan. Starbucks also met political and economic regulations in some countries. The most obvious risk is its limitation of products. As a specialty product, Starbucks has a very limited selection of products, and this also limits the growth of the business. With this come the differences in cultures and how they introduce their product according to the local cultural customs of a country maintaining certain standardization.  Another thing is the issue with overworked but underpaid employees as it continues its growth globally and dealing with local rules and regulations.

1. What are the major sources of risk facing the company and discuss the potential solutions?

One huge risks for Starbucks is the global expansion because it make less money on each overseas store because most of them are operated with local partners. While that makes it easier to start up on foreign turf, it reduces the company share of the profits to only 20 percent to 50 percent.

Another big risk is that once past the generation of the baby boomers and come the future consumer’s the 20 and 30 of the generation X the need for innovation is crucial. I think that market research should be used in order to study the habits of younger consumers.  When Starbucks for first time face competition such McDonald´s and their new McCafe they start to innovate their shops, they installed automatic espresso machine to speed up service. And several years ago, it began offering prepaid Starbucks card.

 Also innovate in some store in which customer can pre-order and prepay for beverage and pastries via phone or on the Starbucks Express Web Site but it doesn’t result and they have to eliminated the service using technology can be useful but at the same thing dangerous because technology can have a lot risk if you don’t manage it well or have someone expert, I think that they implement a better strategy use high speed wireless to attract more people. And free internet it something that everyone nowadays prefer in a coffee shop. It also help to attract young people.