Case 1-1 Starbucks - Going Global Fast

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

The controllable elements in the global market are the product, price, place, and promotion. Starbucks is using their products as promotion as high quality. Starbucks is known to have a sweeter taste than the average beverages served at a coffee shop. Starbucks has done research on places they want to reach out to overseas. Starbucks has done studies overseas in Japan, Italy, Spain, Germany, Mexico, and Puerto Rico. For each location, they had to do studies and factor in what their target market is and what they will be doing in those countries. Some problems Starbucks faced were their product. One thing the local coffee shops had over Starbucks is that they served food with their drinks.

The uncontrollable elements in the global market are the social factors, legal matters, government, and competitors. As we all know, Starbucks is all over the globe in almost every country. By doing this, they had to face local coffee shops, competitors, and people that were loyal to the local shops. Everyone knows what Starbucks is and what they do, and even so, they had a hard time gaining new customers. There are many regulations and laws they had to face because every country is different and has different regulations and laws that are to be enforced.

2. What are the major sources of risk facing the company? Discuss potential solutions.

Global expansion is a huge risk for Starbucks. Starbucks does not generate as much income on each overseas location because most of them are ran with local partners. Even though it may be easier to open a location overseas, it reduces the company’s profits to 20 to 50 percent.

A potential solution is that they have to strategize where to open a location. If a location is not generating profit, then they have to…...

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