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AUE

Marketing and International Business


Case study 1
Starbucks
Iman Al Mansouri
122220011

Starbucks Case Study


QI. What are the key reasons for Starbucks success?
Starbucks is one of the most successful companies globally which
created its own famous brand name internationally. There are many reasons
behind this outstanding success.
First of all is the strong organizational culture that Starbucks builds
depending on very strong values including respect, dignity, diversity and
excellence. For example, any new employee will be educated about the
organizations culture. Starbucks employees are working according to clear
principles that the company set for them including the following points:
make it your own, everything matters, surprise and delight, embrace
resistance and leave your mark. By having these principles, employees will
be more responsible, creative and enjoying the work. They are treated not
only as workers but also as business partners. Also, Starbucks has its
standard ways of being for the employees to follow including being
welcoming, being genuine, being knowledgeable, being considerate and
being involved. Starbuckss values do not form the basic relationship only
with its employees but also with its customers, suppliers and retailers.
Second, Starbucks successfully enters any market with a clear strategy
of saturating that market. Therefore, it is the largest coffee shop worldwide
with 20,891 stores in 62 countries (Wikipedia, 2013). Its shops are available
with comfortable and relaxation outlet including the design and the music
which is provided.
Moreover, customer satisfaction is one of the main reasons of
Starbuckss success. It includes providing high quality, healthy, customized
and creative products and excellent services such as wireless network
connection, magazines and newspaper.

In addition, Starbucks holds a social responsibility to protect the


environment and be a green organization. It produces refilled mugs,
absorbable cups and paper holders and bags. Also, it tries to get involved in
charity events. These practices will attract more consumers who respect
such behaviors.
Furthermore, it adopts experimentation and innovation throughout its
growth. Employees are permitted to try to develop new drinks and submit
their innovations and ideas.
Finally, Starbucks not only sells coffee but also sells its beans to
airlines, restaurants and hotels and manufactures coffee-related equipment
and accessories.

Q2. What are the threats and problems Starbucks may face in the
Future?
Sustainability of success is the most important issue for any successful
company such as Starbucks. Throughout the process of sustaining the
success, Starbucks may face many threats and problems. First, entry of
many competitors in the market forms a real challenge for Starbucks to
maintain success in the future. Therefore, it should achieve a strong
competitive advantage for example by expansion and introduction of new
products and services otherwise it is going to lose its customers. Second,
because of the global warming and the changing environmental conditions,
Starbucks may face a shortage in the supply of coffee beans; therefore face
an increase in the price. Increasing of the price will not only affect the
company but also the customers decision of buying the products. Moreover,
customers preferences may be change to other types of drinks in the future
which will cause a major problem for the company.

Q3. What problems might arise from Starbucks efforts to expand


rapidly into nations such as India?
Starbucks has successfully entered many nations. Large nations with
different cultures such as India are very challenging for the Starbucks to
expand into it. There might be some problems that may arise during
Starbucks company entrance to the country.
First of all, adapting with the Indian culture and attracting them to
consume coffee is the main challenge for the company and the most difficult
one. Starbucks is an American company which started its business to meet
the demands of American for the coffee. In India, drinking coffee is not
popular. Indians are very conservative and strongly attached to their
traditions. Their demand is more to drink their popular beverage which is tea
with milk than coffee. Indian may think that Starbucks expansion to their
country is an invasion of a foreign culture that will enforce its own nature
against the local culture. In this case, the number of customers may be
expected to be small. Therefore, Starbucks should develop different
strategies to make the experience more convenient for customers such as
adding an Indian touch to the types of beverages and food provided in the
shops. For example, when Starbucks entered the KSA market, it changed its
logo to be convenience with the Saudis culture.
In addition, Starbucks may face a backlash from the disaffected people
in India especially the owners of the local small business that sell domestic
beverages. These people will be afraid of losing their customers.
Moreover, Starbucks is providing a luxury products and services with
prices that cant be offered by most of the Indians with low income.
Finally, Starbucks has to convince the Indians that its business is not
going to harm their environment because it is a green company and is going
to offer jobs with training programs that will raise the labor standards. It
should communicate its culture effectively.

References

Renshaw, B. & Mike (1997). Travel agency. Sunderland: Business Education


Publishers Ltd. [Online] Available from:
http://en.wikipedia.org/wiki/Travel_agency [Accessed 17th October 2013].
Marketing Teacher, (2000). SWOT Analysis Starbucks. [Online] Available from:
http://www.marketingteacher.com/swot/starbucks-swot.html. [Accessed 12th December
2013].

Dudovskiy, J., (2013). Starbucks Critical Success


Factors. [Online] Available from: http://research-methodology.net/starbuckscritical-success-factors/. [Accessed 12th December 2013].

Botten, N., 2009. Enterprise Strategy, Elsevier

R E L ATE D AR T I C L E S :

Opportunities and Threats


https://sites.google.com/site/starbucksanddunkindonuts/opportunities-and-threats

Starbucks: Reasons for Success

http://www.ivoryresearch.com/samples/business-essay-example-starbucks-reasons-forsuccess/