Coffee and Company Overview Starbucks free essay sample

Starbucks is an international company which was started in 1971 at Seattle’s Pike Place Market. Today, Starbucks operates in around 60 countries around the world, and they have more than 18,000 stores. Starbucks keep expanding the number of retail stores, and as a result it is the largest and most well-known coffee shop in the world. In 1987, Howard Schulz bought Starbucks, and the company really took off in a dramatic way, and has continued to be successful from that time until today. Howard Schulz was determined to make Starbucks into a â€Å"place for conversation and community,† and this idea influenced the Starbucks mission, which is â€Å"to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. † Starbucks has been working to increase customer satisfaction by improving beverage taste, the speed of service provided, the friendliness of Starbucks employees, and by bringing forth new retail and beverage items constantly. To Starbucks, providing service is more important than the quality of coffee. Starbucks strives to provide quality customer service and create an inviting atmosphere and an exceptional cup of coffee. 1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets. According to the text, the controllable elements are those which are within the organization and are eligible to controlling the operation of an organization, which includes the management, or more detailed business plans or strategies they are carrying. The controllable elements that Starbucks has encountered in entering global markets would be higher price in Italy, and their promotion. Starbucks spends just 1% of revenue on Advertisement of new launches. There are many uncontrollable elements such as competition, culture economic forces and political/legal forces. Organizations cannot control the uncontrollable elements, but they must learn to adapt to them or, in other words, must manage them. One of those elements Starbucks has encountered in entering global markets is that 14% of economy down turn in Japan. Starbucks also have to compete with local rivals where they offer drinks at similar fare in Japan and this could be also one of the uncontrollable elements. 2. What are the major sources of risk facing the company? Starbucks are facing problems of changing generation. After riding the wave of successful baby boomers through the 1990s, they faces an ominously hostile reception from its future consumers, the twenty- or thirty-somethings of Generation X. People in this generation do not feel like spending $3 for a cup of coffee. Some young generation just find the whole Starbucks scene a bit pretentious and they would rather go to Dunkin Donuts for cheaper coffee and food. A possible solution for this problem would be offering new facilities to their customers. Starbucks continues to try fundaental store changes, such as expanding a high-speed wireless Internet service to about 1,200 Starbucks locations in North America and Europe. This offer might make new generation think that it seems reasonable to pay $3 per cup. Starbucks executives hope such innovations will be helping surmount their toughest challange in the home market: attracting the next generation of customers. 3. Critique Starbucks’ overall corporate strategy. Even though Starbucks have many stores around the world, eight cities in the U. S. and Canada remained unaccessed. Since U. S. is the starter of Starbucks, the company should expand their business to all the cities. The more outlets they have the more sales they would have. Starbucks is one of the companies which use very few advertising expenses. They rarly advertise in media and focus more on word of mouth which seems to be working but the company would improve in a better way by advertising more in media and public. If they spend more money on advertising the company would raise more in sales such as bilboard ads, commercial and public posters. Moreover, they pay low for their employees which is considered as a problem within their company. By paying the employees with more high rate, it would motivate the emplooyees to work harder which will lead to high sales. 4. How might Starbucks improve profitability in Japan? Japan is one the countries in the world that have high a Starbucks consumer rates. However, the marketing strategy in Japan is improvable in many ways. First, the price positioning in is higher compared to other countries. A customer in Japan can only buy a small size coffee with the price where a customer in US can buy a grande coffee. This should be improved since the price in Starbucks is too high compared to other coffee shops in Japan. By reducing the prce, the sales would increase with benefits. Another problem is that Starbucks tend to have long waiting lines at many stores (unless it is not located in a very rural area) which can be a huge loss time for business people in Japan. Targeting those business people, they should launch an online ordering and pick-up system so that they can order without considering the time. Consumers would find the service useful to order online by reducing the time the consumers have to spend waiting in the line and for the coffee to be made. As a marketing strategy in Japan, Starbucks should offer services that fit into Japanese cultures and lifestyles.