Starbucks case study

Tsering Dhondup Lama

MKT 301 Necessities of International Marketing and Culture

Professor ; Prateek Lalwani

Westcliff University

Apr 3, 2023
 Starbucks

Starbuck is one of the top specialty coffee retailers in the world that got off to a smooth

start and succeeded in elevating their reputation in people's thoughts to the top of the list(Dayma,

2019). It aims to become one of the most renowned and successful brands in the world. Since it

makes some of the best coffee and premium drinks, Starbucks controls its international and

primary domestic markets.

Starbucks controllable and uncontrollable elements

There are various controllable and uncontrollable elements that Starbucks has

encountered. The controllable factors include pricing strategy, marketing plans, supply chains,

designing and product offerings while the uncontrollable elements include the economic

conditions, cultural variations, and market competitiveness. Factors like planning, strategy and

designing are essential for the growth and success of the business. It can be controlled and done

through market study, analysis, customers demands and through business environments. The

supply chain can also be controlled with the wanting of the products to the time and quantity of

the products the suppliers and organizations want.

Several aspects in business are out of a company's control. These things are sometimes

referred to as uncontrolled elements, and they may have a big effect on how successful a

company is(Ake, 2019). Such as economic conditions which can highly impact the business.

Market may fluctuate due to different economical factors. Like the occurrence of sudden

recession or economic crisis may lead to downfall of business and less spending of the

customers.
 One major source of risk

Significant global coffee retailer, Starbucks might face a variety of challenges and risks

that might harm its performances, operations and brand. One of the main sources of risk facing

the company is economic risk. Starbucks is susceptible to shifts in the global economy, including

swings in inflation, deflation, and recession(Chuang, 2019). Economic instability can have a high

impact towards the customers spending habits and to their preferences. The downfall of the

economy or economic recession and inflation can have negative effects towards the starbuck as

its goods fall under the category of speciality goods and which results in less people consuming

it. Because of the premium brewing techniques and high quality resources it uses, the Starbucks

products are regarded as the premium products, so the little fluctuation in the prices can have

high impact towards its demands and supply.

To mitigate the economic risk problems the company can apply various strategies like

diversifying its products, changing pricing strategy, sustainable sourcing and cost management.

The starbuck can diversify its products through expanding its menus, adding other low priced

drinks and including more affordable products options. Like adding instant coffee, local drinks,

and some food items. They can also use the pricing strategy, through adjusting the pricing with

the economic conditions and offering the discounts and promotions. This can also help in cost

management of the company. The cost management is really necessary to stabilize the economic

condition of the company. Cost management is a type of management accounting that aids a

company in lowering the possibility of going over budget by providing more precise estimates of

upcoming expenses(Lutkevich, 2023). It can be done through proper training of the employees,

enhancing the productivity and using the automation technologies where needed. Starbuck can
also control its economic risk through sustainable coffee sourcing. It can make investments in

environmentally friendly coffee procurement methods, such as helping farmers and minimizing

environmental effect, which can help assure a dependable supply chain and lessen its

vulnerability to volatile commodity prices.

Starbucks profitability in Japan

Starbucks in Japan initially launched its first location through a joint venture with Sazaby

League, a well-known restaurant and retail chain that was already well-known in the Japanese

market(Wang, 2023). With the growing popularity of coffee culture in Japan, starbuck continued

expanding its business in Japan over the years. Their ability to adapt to the local culture has

made them more successful and the ability to expand their stores. They have also launched new

services and products with preference to the demands of Japanese customers.

Starbuck can further improve its profitability in Japan through many aspects. Like

segmentation of the markets. They can segment their market to better understand the needs and

preferences of different groups of customers. This helps the company to better understand and

distinguish its customers into different market segments and distribute its products and services

to the target customers. They can also localize the menus. Through adding more menus with

local taste and preferences. They can include the local taste through utilizing the local

ingredients, and cuisine. This helps customers become more connected, helps create better

customer relationships and brand loyalty. Which results in better customer engagement and

higher profits. Other factors include expanding the products line, reducing the price and

providing the online services.

 Reference

Ake, B. (2019, February 12). What are controllable and uncontrollable variable in

Business?if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[468,60],'blurtit_com-

box-3','ezslot_8',145,'0','0'])};__ez_fad_position('div-GPT-ad-blurtit_com-box-3-0');

Blurtit. Retrieved April 5, 2023, from

https://business-finance.blurtit.com/2794780/what-are-controllable-and-

uncontrollaable-variable-in-business

Chuang, H.-J. (2019). Starbucks in the world. HOLISTICA – Journal of Business and

Public Administration, 10(3), 99–110. https://doi.org/10.2478/hjbpa-2019-0031

Dayma, K. S. (2019). International Business: Expansion of Starbucks to Pakistan .

International Journal of Scientific & Engineering Research V, 10(09), 307–314.

https://doi.org/10.3121923/osf.io/56gre

Lutkevich, B. (2023, January 4). What is cost management? definition, steps and

benefits: TechTarget. WhatIs.com. Retrieved April 5, 2023, from

https://www.techtarget.com/whatis/definition/cost-management

Wang, Z. (2023). Analysis of Starbucks as a Company and an International Business.

BCP Business & Management, 38, 592–597. https://doi.org/10.54691/bcpbm.v38i.3743