Starbuck market entry strategy
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- Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.
Most marketing controllable elements are those that the company has full control of. They are usually referred to as market mix. They are promotion, price, product, and place, in general, referred to as the 4ps. Starbuck has the market entry strategy of using all these. It seems that it has managed well in the product aspect, where it has taken the initiative to flood the market with its product. It started with Europe and then to Asia and now in Africa (Bhagat, 2020). The strategy of building stores at will in different market areas has given them an advantage on their competitors. It also thrives on the quality of their product. To have gained a market share for the shortest time possible to reach the pick, it was, in the shortest time, shows how well the product is accepted (Varshney & Sharma, 2018). The pricing of their product also is strategic as their product is accepted by most people in the market, and that is why it has grown that fast. Starbuck has good research in the place where they are started their business as they tend to look for areas with a large population like China and Africa. Its promotion strategy is not that well developed as the annual expenditure in advertising is low as compared to storage and others.
The uncontrollable factors are economy, competition, regulations, social composition, and technology, also known as CERTS. The CERTS are factors that the business entity cannot control. It is very difficult for a business to control the population of a place or to control the legislation governing businesses in a country. The economy of a nation can also not be controlled by a business(Bhagat, 2020). The competitors who get into the business environment cannot be determined by any other business. Technological changes is another factor that a business has no control over as you cannot determine which technology the country is going to use.
- What are the major sources of risk facing the company? Discuss potential solutions.
The major source of risk facing the company is the great competition it is facing from other companies offering the same products as the company. The McDonalds and other companies are on the rise as they also try to establish their own market share (Varshney, & Sharma, 2018). This increase in competition has resulted into the struggle of the Starbucks Company in the Europe where they enjoyed a larger market share. It is like the market share is becoming smaller with the consumers looking for the alternative products that offer the same utility. The solution to this problem is for the company is to improve on the controllable factors particularly on the quality of their products and pricing. They need to know why the market share that they largely controlled has been evaded by other companies.
- Critique Starbucks’ overall corporate strategy.
Starbucks is majorly concentrating in increasing the supply of their products hence saturating the market (Varshney, & Sharma, 2018). The company neglecting promotion strategies like advertising is one that is worrying. The company needs to inform people of their products before fully introducing it into the market. There is a need to study the behaviour of the competitors. Every market you get into has a competitor, know the weakness of the competitors through research. The Starbuck Company is very weak in market research and that’s why it is getting into a market that has very stiff competition like in China (Cateora, Meyer, Gilly, & Graham, 2020). .
- What advice would you have for Starbucks in Africa? In China?
Starbuck should use specific market entry strategies that will make them get a share of the market even before introducing their own products. One such method is partnering, Starbuck can partner with a company in china or Africa (Bhagat, 2020). The other way is by buying a company, Starbucks can look for a company in the same line of business ad buy it out of market and then introduce itself through that company.
References
Cateora, P. R., Meyer, R. B. M. F., Gilly, M. C., & Graham, J. L. (2020). International marketing. McGraw-Hill Education.
Bhagat, A. (2020). Marketing Environment.
Varshney, D. K., & Sharma, H. (2018). The Need of Marketing Strategy to Win Competition in New Market. Multidisciplinary Higher Education, Research, Dynamics & Concepts: Opportunities & Challenges For Sustainable Development (ISBN 978-93-87662-12-4), 1(1), 340-343.