Starbucks – Going global fast: Case study
Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Volatility of market Starbucks is heavily reliant on the supply and on the prices of coffee. Although Starbucks has supply agreements with suppliers in advance, the company could still face problems due to fluctuating coffee prices. Other factors, such as weather and economic conditions in coffee producing countries, also affect Starbucks’ operations.
Decline consumption of young adults. The 20-30 year-old age group of coffee consumption is decreasing now, and this group prefers other drinks, such as soft drinks. These young adults will be the key potential group for Starbucks’ future market. The declining consumption of this group will bring further problems to the company’s future development (The market for hot drinks, 2004).
A very important factor in the success of a company is the marketing strategies and the marketing personnel that is being used on a daily basis. As the marketplace evolves ever more rapidly, marketers struggle to keep pace. In our marketing department we have started to concentrate more on the issues that have been failing in the past years for us by adjusting our traditional ...
Rising dairy costs. According to Starbucks’ record, dairy costs rose about 40% year on year and this might affect the company’s cost of goods. Milk and other dairy products account for around 3% and 5% of company’s sale. Now Starbucks might carry out its first systematic price rise on beverages in the next four years. Since the prices of Starbucks’ products are more expensive than other similar products, further price rising might affect the company’s operations so the company might lose some customers.
The controllable elements that Starbucks has encountered in its entry to global markets are: strong competition and labor issues.