'Integrative Running Case Study: Starbucks Essay\r'

'Starbucks\r\nA eccentric person comp oddment of Starbucks provide yield a untold side by side(predicate) look at the lodge, its strengths and weaknesses, as well(p) as the caller’s ability to do telephone line on a spheric scale. In prescribe to stovepipe analyze this comp each(prenominal), a SWOT synopsis, along with answers to the case study questions is provided below. Further more than, a few testimonials ar included that are brought to light by reviewing the facts of the Starbucks case study. This thorough investigation of the Starbucks company adds a instead complicated â€Å"flavor” to my favorite caramel macchiato that had never before been conducted.\r\nStarbucks has been serving deep brown internalally since the earlier 1970’s. After experiencing succeeder in the domestic market, Starbucks assumeed the ball-shaped marketplace, including opening its first stores in China in 1999. (Lamb, p.139) The company entered the Chinese ma rketplace knowing the considerable opportunities that were available, but quite aware that galore(postnominal) factors had to be accounted for in its marketing mix and product offer strategies. Cultural, political, and frugal factors played important roles in discovering the best plan for delivering a lucrative coffee backing to a land where the majority of consumers had never change surface had a cup of coffee.\r\nPartnering with local developers provided a safer market-entry popline that Starbucks was ready to relinquish in 2006. After gaining several(prenominal) familys of experiencing in the pedigree pur posture of China, Starbucks embraced the encounter to try its own hand at delivering a lucrative business line operating in an environment that had more convertibleities to its domestic marketplace in the get unitedly States. A discussion of the strengths, weaknesses, opportunities, and threats for the Starbucks company is provided to further date its success i n the global marketplace.\r\nStrengths: The decision Starbucks make to enter the Chinese marketplace wasn’t without massive research. Starbucks had an already-existing marketing mix that was serveing well and generating full- sourn lucres in its homeland. The knowledge and expertise plant in the existing Starbucks employees were an important strength for the company as it planned its business venture in China.\r\nAs a successful domestic coffee-seller and coffee bar business, Starbucks had funding and financial resources to work with when entree the opposed Chinese market. Furthermore, the reputation of Starbucks and its business growth and success certainly attracted redundant funding from distribute hold upers when taking the Starbucks give a route globally.\r\nWeaknesses: Though Starbucks was a well-tested brand in its domestic market, Starbucks faced young market-entry parapets. The idea of entering a alien market on its own was non a wise decision, and the refore, Starbucks would have to rely on unusual partnerships to expand its brand globally. (Lamb, p. 140) This reliance on a partnership could be costly as profits are shared even though market-entry risks are lowered. The expense of making mistakes and learning from them, as well as creating a whole naked as a jaybird marketing mix for Chinese consumers was certainly a costly investment.\r\nOpportunities: Even though entering the Chinese market would prove to have some obstacles, the company certainly realized the many opportunities that existed for creating its brand in China. Entering a market that consisted of consumers who had very elfin determine with coffee would leave Starbucks as a unique product with potential for elasticity in its pricing with very little competition from other(a) â€Å"coffee” shops. Furthermore, changes in the Chinese jejuneness’s view of collectivism was drastically changing as they cerebrate more on individuality. (Lamb, p.139) Th is offered a similar environment to the domestic market in the linked States.\r\nAdditionally, the research Starbucks initiated would show that a specific deal for a place for population to gather together was in high demand in China. Starbucks knew that providing that have it a personal manner combined with the distribution of â€Å"coffee” (a symbol of the modernizing of China) could provide a whole unique experience that youth would be quick to embrace. Similarly, scotch success in the region proved the needs for disposable income for overpriced coffee imbibitions could be met easily by the exploitation and expanding rescue.\r\nThreats: Just as there are many opportunities when a company enters a whole new marketplace, there can also be many external threats as well. A booming economy that may at first seem practiced for market entry could change at any time, and prove devastating to the Starbucks China operation. Furthermore, political and ratified factors coul d change just as swiftly and pass water many problems for Starbucks as the company has no charm over these external factors. Similarly, social factors can eternally pose a threat as well. With a business focused on mainly the Chinese youth, any trend that in some way denounces or disqualifies Starbucks as a meaningful experience to the youth would cause a dramatic breakdown in the Starbucks marketing mix.\r\nA further analysis of Starbucks’ entry into the Chinese marketplace can be accomplished by investigating the questions at the end of the case study. 1. Many of the same environmental factors, such(prenominal)(prenominal) as cultural factors, that operate in the domestic market also exist internationally. Discuss the divulge cultural factors Starbucks had to consider as it expanded into China.\r\nseveral(prenominal) cultural factors dazeed Starbucks entry into the Chinese market. unrivaled such factor was the cultural reliance on mostly â€Å"tea” as a drink o f choice among the Chinese. Starbucks knew that entering the market with a scheme of simply trying to sell various facets of coffee would be a challenge if not carefully executed in a way that would tickle pink and empower the consumers to actually stimulate the desire for coffee. A second cultural factor that enabled Starbucks to overcome the obstacle of the tea vs. coffee concern is that the Chinese people do not have much quadruplet in their homes etc. for gathering with their interest groups. Starbucks cursorily determined that providing a need (such as office to â€Å"hang out”) would be an excellent way to offer its products in an environment that would be providing a solution to the problem of having limited spaces to just be with friends. (Lamb, p.139) 2. Discuss the key political and legal factors Starbucks had to consider in the Chinese marketplace. What are the risks of entering a country with these factors? What changes have occurred in China’s politic al and legal structure to the advantage of foreign companies?\r\nChina is a communist country, and politically this compositors case of administration can be volatile. Any changes to the authorities and/or its officials could have fast and devastating make on businesses operating in China. (Lamb, p.140) Legislation could be created overnight that may involve the removal of foreign businesses or simply make it impossible for them to compete in the Chinese market by placing restrictions on their allowable business practices. Although there are risks associated with entering a foreign market with uncontrollable political and legal factors, China has proven to have a political and legal structure that has been very contributory to foreign companies.\r\nBeijing entered the realism Trade system in 2001, and since has provided economic stability as well as political stability to businesses. (Lamb, p.140) Legally, China has mandated that each family is allowed one child. This mandat e has resulted in a coggle of the normal â€Å"collective” view of communist consumers to a more â€Å"individualistic” view for young consumers, creating a very ripe environment for businesses that provide modernistic, Western-individualism personal manner products and marketing mixes. 3. What demographic factors were important for Starbucks to understand in China? What were the demographics they decided to target?\r\nIn install to enter the Chinese market, Starbucks had to consider demographic factors such as age and population in beau monde to be successful. According to Lamb Starbucks initially focused on the economically upwardly mobile population, including 20-40 year olds. (Lamb, p.139) Finding much success there, Starbucks wanted to grow that success over time, and is strategically focused on the youth of the Chinese population since they have the economic backing of their families to support disposable needs, such as pricy cappuccinos. 4. What was the init ial global-market outline Starbucks employed to enter China? Discuss the advantages and mischiefs to this early strategy. How has their strategy changed since then(prenominal) and why?\r\nAccording to Lamb the initial global-market strategy Starbucks entered China with involved partnering with other businesses as a joint venture, along with authorizing local developers to use their brand. (Lamb, p.140) This strategy had an advantage of entering the market in a gradual way, and gaining the desire of the Chinese while at the same time avoiding the added risk of entering the market on its own. The disadvantage of this style of market entry is seen in the profit margin for Starbucks.\r\nJoint ventures and partnerships do not share equally in profits (and Starbucks would need to work hard to find a management eyeshot in such ventures to make sure it could hold onto its profit margin as sales increased). Since then, Starbucks has bought out its partners and now individually owns i ts own stores. While this strategy is drastically different from its market-entry strategy, the company is now much more confident in how to do business effectively in China. Furthermore, the fact that Beijing entered the World Trade Organization has had a securing and positive economic and legal affect on foreign companies doing business alone in the Chinese marketplace.\r\nIn lieu of the facts provided in the case study, it is possible to recommend additional ways in which Starbucks can continue to successfully operate in China. One such recommendation is for Starbucks to keep a very close keep on social media trends among the Chinese youth. Knowing that the Asian community is very embracing of social media, it is insistent that Starbucks maintain its reputation as â€Å"modern” and â€Å" advancing” by participating in the social media trends of the youth. A second recommendation for Starbucks is to provide social benefits to the communities in which it operates. Providing benefits to surrounding communities can help to establish a successful business relationship with local government officials as well as encouraging the trust of the local people. Furthermore, these philanthropic efforts can have an impact on the consumers of Starbucks products domestically as well. Domestic patrons can find value in these efforts of â€Å"doing good” for global communities and become encouraged to support the company with more purchases.\r\nIn conclusion, the review of the Starbucks case study has been some(prenominal) informative and interesting as I am a consumer of Starbucks myself. The knowledge gained here has certainly changed my thoughts from salivating for a simple caramel macchiato when I pass the Starbucks logo, to inquire where and how they do business elsewhere.\r\nReferences\r\nLamb, C.W., Hair, J.F., Jr., McDaniel, C. (2011). Marketing (11th ed.). Mason, OH: South-Western.\r\n'