International Marketing



International Marketing

Question 1

In order to enter in the international market, Starbucks has encountered several different controllable and uncontrollable elements, and after effectively encountered that Starbucks so that their business could also be successful in the global market. In the starting of 2000s, Starbucks literally faced some serious risks in its business operations at international level. The unpredictable political environment created some really severe problems for Starbucks in the Middle Eastern region. In the July of 2002, a boycott was called by the students of Arab against the goods and services of America, as that time the relationship between Israel and the United States was alleged. That boycott by Arab was targeting several companies of the U.S., such as Starbucks, Estee Lauder, and Coca Cola. Starbucks was on the top of the list of such companies that were being boycotted due to the alleged closeness of Schultz to the community of Jews.

The concern was provoked when it was accounted that, in one lecture of Schultz which he was delivering to his students of the University of Washington, he had spoken that among my various missions one is to sensitize the people and people must not be invulnerable to whatever is taking place in the world. He also said that he travelled a lot of countries in the world but he observed the increase amount of anti-Semitism in the continent of Europe, particularly in England and France (Belson, 2003).

On the expansion of Starbucks, Schultz had to be progressively sensitive to several challenges of cultures of different countries. He did his best efforts and visited Israel to settle out the crisis of the Middle East. There are numerous more elements that had been encountered by Starbucks in order to achieve the spiteful growth record.

Question 2

Starbucks has been going through several risks since its inception but, it always sorts out some of the potential solutions for such risks. One risk lies on its own supremacy as Starbucks in existed in each corner of the United States and due to this the sales is cannibalized from current locations. For this issue, in the year 2008, Starbucks closed down its 600 locations that were underperformed.

The prices of Starbuck's coffee are substantially high because of its premium quality world-wide and due to its higher prices; many normal people don't think to afford it in various countries. So, there must have more influential pricing strategies in different countries. The company highly depends on the optional spending of its consumers for driving the sales. As a result, a drastic change in economic conditions can affect its revenues. For example, with 2008-2008's global economic downturn, many customers were forgoing a coffee of $4 and were favoring to buy a cheaper option other than Starbucks. As the target market of Starbucks is the adolescents and college educated of the higher-income group so it defiantly offers a luxurious consumption and environment to them. However, it can have some serious challenges for maintaining its profit margins at times of ...