Starbucks Going Global: Controllable and Uncontrollable Elements

Case Study 1 – Starbucks
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Case Study 1 – Starbucks
Defining the Issues
Starbucks is one of the global leaders of coffee consumption that has invested a lot to attain its business ambitions in the retail coffee and snacks store industry. Equally, Starbucks has faced ups and downs in conducting its commercial activities. For example, it negatively affected the perception level of stores after its store in Seattle was attacked. The aromatic expresso smell was replaced with the tasteful and white color smelling of tear gas. It went viral, sparking outrage on various social media platforms. Similarly, some clients expressed delays in client service (Michelli, 2006). Starbucks should deal with such issues because it can face many challenges in Japan and Africa. With close relation to the above analysis and the case study (one), the paper presents the controllable and uncontrollable elements, significant sources of risks affecting Starbucks, and potential solutions. Conversely, the report also presents personal advice and recommendations for Starbucks to thrive in Africa and China.
Controllable and Uncontrollable Elements
Analyzing the Case Data
Price, place, and promotion represent some of the controllable elements encountered by Starbucks in the global markets. The price of Starbucks coffee varies from one country to another. For instance, American coffee is more expensive than Italian coffee (espresso), retailing at $0.67 and $0.55respectively (Michelli, 2006). Concerning promotion strategy, Starbucks has become famous for its picture of a mermaid positioned on its products since the day it was founded. Strategically, the idea empowers Starbucks to translate nicely to potential clients in the new market. However, the Starbucks Organization should execute a comprehensive survey or focus group on analyzing and understanding the clients' preferred coffee brand (Michelli, 2006). The brand should correspond to their tastes and preference. The Organization frequently opens new physical stores. For example, it has about 9000 facilities in Seattle, where 12000 employees run every store. Interestingly, the Organization began with 15 stores in Africa, which has allowed them to increase to 12000 workers managing a single store.
Conversely, Starbucks Company is also influenced by uncontrollable elements such as consumer spending, competition, political and legal bindings. Advisably, the organization should deal with such elements to thrive in the global market. Typically, the economy will always fluctuate the spending rate of consumers. For example, the 2007 to 2008 financial crisis compelled consumers to become choosy when spending money on various products. Notably, the Starbucks Organization recorded a profits margin of 673 million dollars in 2007 (Michelli, 2006). Its profit margin was reduced to 582 million dollars in 2008 (Rao, 2009). It deteriorated to 494 million dollars in 2009. Critically, all business organizations cannot control these situations. Still, Starbucks Company can harmonize (reduce) the prices of their products to attract and maintain potential clients to continue being loyal to the product...