Starbucks Case

Introduction This is a proposal based on the case study “Starbucks – going global fast” (Cateora and Graham, 2007), further research has been undertaken and analysis and recommendation will be based on these sources of information. Critique and analysis Being a multinational company expanding at a speed that leads thoughts towards badly imaged global corporation like McDonalds are these days not considered a strength. McDonalds might have conquered the world and made profit of people’s bad habits of eating junk, but this has backtracked on them resulting in extremely bad image and word-of-mouth meaning declining sales and profits.

They have now tried to reposition, but without much success. Starbucks should learn from McDonalds and not obtain the same position. Considering the mission statement of Starbucks and the fact that it must be assumed that they still want to be successful in ten years time. The option of following the foot prints of McDonalds is not a possibility to be considered. “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (p. 0, Kotler et al. 2005) Further more the mission statement emphasises work environment, diversity, high standards of excellence to every aspect of the core product as well as “…commitment to a role of environmental leadership in all facets of our business”. (p. 80, Kotler et al. 2005) At the speed Starbucks are expanding their business there is risk that some of these missions will be ignored when entering new markets. There are constantly new risks facing Starbucks both on the domestic and international markets.

These factors should at all times be considered and “…a marketing mix from the controllable elements, the uncontrollable factors are precisely that; the marketer must actively evaluate and, if needed, adapt. That effort, the adoption of the marketing mix to these environmental factors, determines the outcome of the marketing enterprise. ” (p. 11, Cateora and Graham, 2007) When this is mentioned it is important to stress the fact that though the awareness and management of the whole external environment is extremely important, there are bigger risks currently threatening Starbucks: 1.

Image and perception This aspect is the biggest source of risk threatening Starbucks right now. This risk is not to be found in the uncontrollable environment, but in the controllable. Without consumers there is no future for Starbucks, it is therefore essential to understand them and meet there wants by tracking trends and continually improving the image of Starbucks. The way Starbucks is growing right now there is a big risk that they will be perceived to be a big global company wanting nothing but profit.

In relation to the image it is important to understand the product life cycle and the international extension of this as well as the diffusion of innovations and how a product, an idea or a trend is adopted through society. (Rogers, 2003) 1. Lack of innovations In relation to the first point, there is a lack of being truly innovative and thereby doing what Starbucks was perceived at when they first entered the market in the 1980’s. Being true to there previous strategy of being innovative in all aspects; human resources, concept, product, marketing etc.

What is happening currently is that several me too’ers are adapting and benchmarking the concept of Starbucks. This means that Starbucks only competitive advantage is that the fact that they back in the 1980’s where first movers. And since that is not always considered to be an advantage they don’t really have a clear advantage when entering new markets. A defence strategy has been used the last years and as Kotler et al. states: “Simply defending one’s current position or products rarely works”. Both of those aspects should be seen in relation to the “bible” of Starbucks the mission statement.

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