Another strength that Starbucks possesses would be its ability to cope up with the culture of its target customers. Like in the case of Starbucks stores in Asian region, they started to offer curry puffs and meat buns since Asian generally prefer to eat something while having coffee. Moreover, Starbucks also allotted separate space for its female customers in the Middle East as a form of respect on the existing culture on the said region. Japanese women also attracted to Starbucks stores due to its No Smoking policy.
Another agent to Starbucks success would be its ability to spot market opportunities whenever there is a chance. Like for instance, when the company found out that Asian tries to imitate the Western style of living Starbucks management instantly grab the opportunity and started putting up store to those Asian countries like Philippines, Japan etc. Employees, especially baristas, are highly trained in preparing Starbucks beverages which adds up to the attainment of high quality coffee beverages bring offered by the company to its customers.
Moreover, Starbucks offers employee friendly policies which provides harmonious working environment in the company. Weaknesses of Starbucks One possible weakness of Starbucks would be the careless statements of Schultz regarding the political instabilities that has been happening in the Middle East. The top management must be cautious in making such statements since the United States already have a negative connotation or image among other countries especially those coming from the Middle East.
One of the reasons raised on the possible factors that contributed on the failure of international operations of Starbucks would be the its complex joint ventures and licensing agreements which caused trouble in the execution of important company strategies and greatly affected the entire operation of the company in the international market. The last but not the least weakness of Starbucks would be the weak management of its international operation.
Some market analysts say that the international operations of Starbucks is not that well planned as compared to its domestic operations in U. S. Analysis of Current Environmental Threats One possible threat to the company would be the increasing number of competitors in the market especially in Europe wherein their competitors are starting to offer cheaper coffee beverages relative to them. Moreover, the high volatile nature of the international market causes more uncertainty on the success of Starbucks operation.
The economic instability of the rest of the world also causes hardships for Starbucks to have harmonious operations to the rest of the world. There is a big possibility of acquiring high losses if the company continued to invest into those countries that currently experiencing economic turn downs. Another reason raised would be the political instability that exists in the market especially in the Middle East during the early 2000s which cost the company millions of dollars as Arabs started to boycott products of American companies in which Starbucks was the top priority.
There is existing high demand of coffee beverages in the international market; the only thing Starbucks must do is to intensify its international operation management to integrate all of its resources as well as their political relationship to their host countries. The number of Starbucks is still not on its optimal level internationally, therefore, there is still a room for the company to increase their sales and market share after the intensification process of their international operation has been successfully implemented.
Despite of the economic instability of the United States, Starbucks was still able to maintain its profitability thereby attracting more investors to come on its side. Meaning, the company will have enough funding for its plan of international expansion after they solved their problem regarding their weak international management. Alternatives There is really nothing wrong on Starbucks operation on the US market, the company must concentrate on reviewing their management strategies as well as organizational structures to see where exactly on their international operation is the root of their instability.
The company could either hire a consultancy firm that would evaluate and determine the exact root of the problem. The only problem with this strategy is that it would take months, or maybe a year before Starbucks to finish implementing this strategy. But at the end of the day, this will give Starbucks sustainable growth for the next coming years. Starbucks could also review their business ventures and licensing agreements if those were still in line with the company goals existing strategies. Remember that Starbucks has been entering into complex business ventures which cause disruptions on the harmonious operation of the company.
One possible advantage of this strategy would be that fact that this will give Starbucks enough room to identify the reason behind why there are some stores that acquires loses for the past years. The last but not the least alternative for the problem of Starbucks would be to find ways on how to further lower down the prices of Starbucks’ products in order to compete at par with their competitors. Remember that Starbucks has starting to lose its grip on its market share on Europe due to the existence of cheaper coffee beverages from local coffeehouses.
This alternative would also provide Starbucks with enough competitiveness to compete with other coffeehouses in the market as well as to attract more customers thereby increasing their sales and revenue. Recommendations Based from the given alternatives and their corresponding benefits and drawbacks, it is clear that the first alternative is the most likely solution to the problem of Starbucks. The review of Starbucks international operations management might already include the evaluation of their current price level as well as to review the business ventures agreement that the company have been dealing for the past few years.
Although this solution would require much longer time as compared to other alternatives, but the fact that this will give long run growth to the company this will justify the long wait as compared to having short run solutions wherein the company would have to solve the problem every now and then without targeting its root. References Anstett, J. et al. (2007). Starbucks: The Non-Coffee Treat. Retrieved March 2, 2008, from www.carmean.net/papers/Starbucks%20Marketing.doc