Case 1-1 Starbucks - Going Global Fast Essay

Words: 1097
Pages: 5

1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.

The controllable elements in the global market are the product, price, place, and promotion. Starbucks is using their products as promotion as high quality. Starbucks is known to have a sweeter taste than the average beverages served at a coffee shop. Starbucks has done research on places they want to reach out to overseas. Starbucks has done studies overseas in Japan, Italy, Spain, Germany, Mexico, and Puerto Rico. For each location, they had to do studies and factor in what their target market is and what they will be doing in those countries. Some problems Starbucks faced were their product. One thing the local coffee
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3. Critique Starbucks’ overall corporate strategy.

Starbucks is able to open a new store in 16 weeks or less and able to start making profits after three years. There are so many Starbucks around and their way they are doing this is by “predatory real estate” strategy. They are willing to keep opening more stores even though the rent or the location price may be high. They do this so that their competitors are not able to come into the location. This is why you will see a Starbucks and across the street, you might see another Starbucks. David C. Schomer, said that Starbucks was willing to pay double the rent for the location to open a store. They did not even open the store but corporate was still paying the rent so that others cannot open a coffee shop in that location.

In the end, Starbucks wants to drive out all the local competition wherever they go. They want to show that Starbucks is the only place to go to get a cup of coffee. This is similar to what Wal-Mart did with their stores. They were selling their products cheaper than their local competitors; even if they were losing money, and when the local competitors went out of business, Wal-Mart was able to control the price of their products. This is similar to what Starbucks is doing. In their case, they are paying rent to spaces so that others cannot come in.

Morally, this is wrong. For doing this, this makes a lot of people resent Starbucks,