Identify The Controllable and Uncontrollable Elements That Starbucks Has

 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
organization itself in entering global market. The political, economy and cultural issues in the
foreign countries can occurred at any time(sudden) and therefore, these are few elements
which take into consideration when Starbucks trying to adapt into the foreign market. At any
time, the foreign countries governments may change their fiscal 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 increasing competition among rival
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 benefits which
is legal and compulsory in 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 expansions of 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 elements face 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 also their overall country income. 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, Starbucks also provide the
experience for customers in all around the world. As an example in China, customers in this
country prefer to have tea rather than coffee. In this case, 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.
 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 customers may get bored of it and tend to switch to others. Secondly, the market
concentrations are 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 finding ways to improve the quality of their coffee and also the services as 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 concentration into their international market instead of their domestic
market. Besides, by avoiding self-reference criterion (SRC) and ethnocentrism during
decision making will not influence an evaluation of the appropriateness of a domestically
designed marketing mix for a foreign market. In other words, proper fine-tuning are needed
so that less mistake which can cost the chances of lost in profitability, reputation and also
trust by customers can be minimized.
 Critique Starbucks’ overall corporate strategy.
Starbucks saturated their market in United States. However there are still frappuccino-free
cities which included Butte, Montana and Fargo, North Dakota. This is because the saturation
in big cities and the more outlets in big cities will help in increasing the sales but without
maintaining the good services and meet the demand in 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.
 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 satisfied the needs of them, they are likely to stick and thus it eventually created
product loyalty in customers. For that reason, Starbucks were have to conscious in things like
the strategic location of the stores, whether it conveniences customers and easily to be find or
not. The location is one of the important factors. Secondly, Starbucks were have to create the
environments where customers can spend most of their time at the same place in comfort,
supply WIFI system where everyone can online for their own entertainment, studies or even
spaces 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 customers will feel the worthiness rather than feeling expansive and switch to
any other competitors of Starbucks in Japan market.
The Japanese people are very much less conscious when it comes to the price. Now a days,
the younger generation in Japan are inclined towards spending their time in a more
constructive manner. According to some source from the internet, it says that they have very
less time for their leisure. Aside from sipping a cup of coffee in a coffee shop that they go to,
they also love or they are interested in learning the language of English. And, they don’t
hesitate to spend thousands of yen in an internet café just to sleep. In other words, to improve
the profitability in Japan, they should reposition their products and services.
Here are the following strategies that they should do:
 The Starbucks and its competitors in Japan are providing the same fare. As a
result, competitors can easily eat up at Starbucks’ share. In short, they should
either reduce the price or increase the benefits in Japan.
 They can also introduce the style in the US online system in Japan. This
would let the Japanese to order their products through the internet.
 Lastly, they can introduce various cultural entertainment or campaign in
Japan. This would make the youths will be attracted to enter the coffee shop.
This kind of extra activities are very helpful especially during the economic
recession that can boost up their sales.

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 Identify the controllable and uncontrollable elements that Starbucks has

encountered in entering global markets.

 Critique Starbucks’ overall corporate strategy.

 How might Starbucks improve profitability in Japan?

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