How Starbucks Can Reduce Risks Marketing Essay

How Starbucks Can Reduce Risks Marketing shewMulti National Companies go by means of severe look process in the lead enlarging their business activities to other countries. By takeing the appropriate mode of entry to planetaryist food marketplace companies nominate capture the market easily and subdue the encounter associated with it. Starbucks, being one of the largest coffee shop in the world has opted juncture ventures, licensing and wholly owned subsidiaries to expand their business globally. They started expanding their activities in 1996 by entry through Joint ventures in Japan and through wholly owned subsidiary in Canada followed by Southeast Asia, Europe and Middle east. These strategies on with product innovations are the main reason for the victory of Starbucks coffee globally. They set about modified their product line up and offer 30 blends of coffee, bott lead Starbucks Frappuccino, immature Tea Frappuccino, curry puffs, meat buns, sandwiches and salad s to meet the needs and requirements of the consumers in special(a) market.Starbucks confirm opted a better and efficient way to expand their international activities. They expanded their business activities through Joint ventures in huge market of Japan, Greece and other big countries where as they have owned subsidiaries in almost of the low risk countries like Canada and Ireland. They have as well as expanded their activities through licensing in countries like Malaysia and New Zealand. Starbucks studies the market first and then spread few stores at trendy places. After successful merchandising visitation and training of brew masters, it also ensures that similar coffee beverages and No skunk rules are applied all over. They have been growing rapidly from 17 stores in Seattle to 19,972 stores worldwide mainly attracting youngsters. Their expenses on marketing is very little as they mainly rely on word of mouth advertising. They have add up with antithetical kind of ser vices like Starbucks Express, machine-controlled espresso machines, and self service for their customers, which are also the reason for their huge success worldwide.Sources planetary Management, Managing Across Borders and Cultures, Sixth Edition, Helen Deresky, ISBN 0-13-614326Careful depth psychology and management of risks non only mitigate losses but also provide ranking(a) returns. In the light of this statement do you think Starbucks did not disassemble and manage the risks involved in the different markets it entered?Yes, I believe that Starbucks did not analyze and manage the risk involved while operating in different markets. They have mainly focused on increasing the payoff of stores worldwide to achieve market dominance but ignored the item that most of their stores are running in losses. They are lining legion(predicate) challenges in US and overseas market by their competitors like Nestle, Tim Hortons and Dunkin Donuts.Starbucks is facing many internal and exter nal issues like change in frugal conditions, change in render and preferences of customers, huge argument, high business phylogeny costs, etc. They also have been facing several(prenominal) problems due to stinting crisis in several countries and had serious political problems in Middle East, which led in closure of their several stores in Iraq and Israel. Starbucks mainly focused on its expansion and ignored the competitors around them. They are facing stiff competition in Germany and France from local coffee shops. Their prices were high as compared to the local shops oblation the homogeneous taste of coffee.It is right that they have come up with different range of products for different markets but failed to come up with appropriate strategies for same market. They were not able to analyze properly the opportunities and threats available in a particular market and failed to relate them with their strengths and weaknesses. They lacked product differentiation from competitor s thus were not able to capture the target market. Political, Environmental, Social and Technological factors had also its stir on Starbucks internal business activities.Thus I feel, Starbucks could have do better with their expansion strategy If they would have focused on mill analysis and PEST factors influencing their business activities. They have to do immense research on market growth and market share of their future projects and opt for the beast available option.Sources International Management, Managing Across Borders and Cultures, Sixth Edition, Helen Deresky, ISBN 0-13-614326Question 3A company faces diverse set of risks in international markets. What were the risks face up by Starbucks in its international operations? Explain how Starbucks can reduce risks in its international business.Companies operating on international level faces several risks while doing business. Starbucks, being one of the largest chain of coffee shop is also facing several problems in home as well as in abroad. Although Starbucks has expanded enormously during its earlier stage is facing nowa solar days stiff competition from its competitors. They also have employees disappointment and are not able to provide satisfaction to them. Payments made to the employees does not match with the locomote load they have to suffer at work. Due to their aggressive marketing strategies they have grown their rivalry and lost potential customers. Japan, which was the largest overseas market for Starbucks followed by United Kingdom started facing decline in their lettuce rates.The main reason for the declining profit rate for Starbucks is due to mismatch of their policies with customers expectations. Starbucks thinks that they can increase their profit by increasing their stores day by day but they fail to provide customers satisfaction. Their prices are still high than of the competitors and they failed to remunerate the newer generation.According to me Starbucks have to adjust its policies and reposition its product line up according to the market in which they are dealing. They also have to come up with new and better line up for customers as their taste and preferences keeps on changing. Starbucks have to try to increase the level of employees satisfaction by increasing their salaries, providing initiatives, bonus and other allowances. They have to study the controllable and contumacious factors that they face while entering global market. Innovations and Investment are the severalize factors for them in the long run. Through study of PEST and SWOT analysis can be very effective in maintaining their leadership worldwide.Sources International Management, Managing Across Borders and Cultures, Sixth Edition, Helen Deresky, ISBN 0-13-614326