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Starbucks Case Study

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Case #1- Starbuck's Strategy: It's a Small World After All- Case 2.1

A1. Create a SWAT analysis of Starbucks focusing on its plans for international growth.

1. Strengths

a. Starbucks has obtained a strong brand name over the years.

b. They have obtained a system that works.

* Consistency

* Astounding customer service

* A long range of customer loyalty

* Superior quality

* Good training and management system

* They understand their target audiences.

* They have the resources and money for valuable research.

* Their marketing strategy is magnificent. An example is how they name their coffee Tall, Venti, and Grande. This gives the customer a sense that the product is foreign and exotic. With this in mind, customers are willing to pay the extra money. They want those unique products. (paladn)

c. Now with their products sweeping nationwide, Starbucks is able to tie-in products, such as coffee cups and briefcases, to expand their market.

d. Starbucks has an incredible distribution system. They now serve coffee at 6,500 stores nation wide.

e. The product itself is quality guaranteed. Superior to other competing coffee shops, such as Dunkin Donuts and local coffee houses, following in its footsteps.

f. Starbucks has a very atmospheric feeling about it. From the sofas to the classical music, sipping a coffee and reading a book is all part of the Starbucks experience.

g. Starbucks has a very interactive website for its customers. "Good information is good business." (paladn)

2. Weaknesses

a. Price may be difficult concerning overseas expansion. The company must focus on what country they are entering and consider lowering prices to fit their economy.

b. Some countries perceive the United States as uncivilized country and want nothing to do with American products. Starbuck's must take this into consideration and try to overcome the label of trying to "sell the American culture." (Kurtz 60)

c. There is going to be a huge problem when it comes to competing with local mom and pop's cafй's. Starbucks needs to understand that moving internationally may put any local businesses out of jobs and cause a downfall in the economy. This in the long run may hurt the Starbucks business.

d. With these problems listed above, Starbucks needs to consider if they have the financial resources if a similar problem arises.

3. Opportunities

a. Expanding internationally will heighten and expand awareness about the Starbucks Corporation.

b. Obviously the move internationally will bring in more money for the business.

c. The American people are known for traveling. When they travel overseas they are more likely to come to a cooperation that they are comfortable with. Starbucks is known for having American customer satisfaction. They should use it to their advantage.

d. There is a wide range of growth potential overseas. Some things may need to be altered though, to bring in a new crowd and attract more valuable customers.

4. Threats

a. Starbucks needs to take under consideration that wars could break out in other countries. This could potentially damage the economy and the business itself.

b. Some countries may take Starbucks' logo offensively, seeing that it is a naked mermaid.

c. Instability is always possible when going out of home territory. Does Starbucks have the resources to deal with catastrophe?

d. The local potential competitors may be a problem because they have been around for so long.

e. If failure comes internationally, that could potentially hurt Starbucks on the home front.

f. Tastes and sizes off coffees are much different. Take into consideration if the country is ready for a total change or if they are not going to accept the new trend. A documentary filmmaker, Bertrand Abadie, states, "American coffee, it's only water. We call it chausettes." In English this means "sock juice." (Kurtz 60)

A2. Do you think this strategy is good for the company? Why or why not?

Starbuck's strong name and image can success in an international environment. Additions should be made to their menu to bring in their international customers. Starbucks shouldn't immediately come in and take over the market because there could be a potential downfall in the market. Starbucks should experiment in a major city and get a variety of potential customers' views on the products. They should find out what kind of culture they are planning on working with and make small additions to the company but maintain



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