STARBUCK’S CASE STUDY
TheChinese market is a very important market segment for Starbucks toconsider investing in. currently the Chinese market is ranked numberone in terms of consumption of luxury products and other customizedproducts (Halper, 2014). The best strategy that the company canundertake to effectively grow in the Chinese market is to assumeproduct differentiation and customization. It can ensure this byadopting frameworks that will filter consumer preferences and needswhenever they make a purchase. This information will be crucial inenabling the company to know what kind of products a given customerprefers or what kind of movies they watch and songs they listen to(Cole, 2013). By so doing the company will ensure that it sends thema list of new products or suggests particular kind of products inline with their brand, need and preference. Such an approach goes along way in winning customers since they tend to feel attached to thecompany that recognizes their needs or likes in the market (Hansen,2012).
Starbuckscan increase its entertainment business globally by fully embracinginternet applications. The company should consider going into suchforums as social platforms and establishing a website that will allowstreaming per pay and download per pay system. The digital platformwill place the company on a global scene at minimal cost and withinthe shortest duration as compared to the physical stores that incurhuge operating and maintenance costs in addition to licensing fees Ieach country (Halper, 2014). Netflix has been able to growtremendously in the recent past because of its ability to embracetechnology in service delivery. If Starbucks embraces the sameapproach it stands in a good position to win a large customer base.
Anotherapproach that the company can undertake is a full integration ofentertainment business and its coffee business. Management shouldtake an approach that allows customers to view the two products underthe same roof and often test them. Integrating the two products willensure that the company utilizes its numerous stores across theworld. In turn the company will be able to trim down its operatingcosts and licensing fees. Additionally, it can utilize the sameworkforce reducing the need to incur extra costs in recruitment(Hansen, 2012).
Themain products that Starbucks should concentrate on in the marketinclude movies, videos and songs. By establishing a strongrelationship with reliable suppliers in the market, the company cangrow the entertainment business to become a major source of revenue.These products are trendy and require up to date consideration due totheir short lifespan, thus establishing a good market strategy thecompany stands in a good position to sell its products. Starbucksought to concentrate on the following services movie and videosdownload, songs download and cloud services (Shermer, 2010). At timesit becomes very hard to be everywhere at all times. Thus, Starbucksmust come up with a complete database of its products online thatwill enable access to consumers in distant places. These customerswill be required to pay for any live stream of the movies or songs oreach downloads. With the continued transition of data storageStarbucks ought to consider getting into cloud storage business.
Starbucksis a one of the big companies in the market with huge profit marginsand resources. It is imperative for the company to utilize theseresources to stay top in the market by embracing changes intechnology. Cloud storage systems will enable the company toestablish a closer contact with its customers in the market.Additionally, cloud storage mechanism will offer the company a freshway of collecting data in the market that can be used in improvementof its services in the market (Shermer, 2010).
Cultureis one of the major attribute that negatively impacts businessesacross the world. Starbucks faces an immense challenge in theexpansion of its entertainment business across the world. The mainreason is the difference in culture juxtaposition of different peoplein different countries. For instance, most Asian nations exhibit ahigh level of conservatism unlike the western nations. In suchcountries listening to some music or watching particular set ofmovies is a taboo and punishable. Religion is one of the culturalaspects that play a big role in impacting the entertainment industry.According to Sharia laws it is contrary to the religion to see awoman dressed in some tight clothes or naked (Sindhwani & Ahuja,2014). However, most western affiliated movies and songs tend toportray this. It becomes very difficult for Starbucks to market thoseproducts in such countries.
Normsand tradition spell out differently in countries, for instance whatmay be observed as ethical in US may not be ethical in China. Suchcomplexities put the company in a dilemma in trying to analyze thetwo different contexts. The reason being if the company introduceswhat is referred to as ethical to a US society to a Chines society,there is a higher chance that there would be a clash of culturesmaking the company loss its market space. Political dilemmas alsoengross the company (Halper, 2014). China is one of the countriesthat can depict the impact of a shift in political factors. The newregime in china has come up with different legislations andregulations that could affect the future of companies in the country(especially foreign companies). Starbucks is likely to incur animpediment in operating in such environment where political factorsare not fixed. This is because the company has to constantlyre-strategize to incorporate the new system (Snyder, 2013).
Someof the profound legal factors that may affect Starbucks includeemployee legislative acts, tax regulations, consumer protection actsand product control acts. These factors play a significant role inaffecting Starbucks production scale in the market. For instance, inthe US employee welfare societies push for the adoption of theemployee legislative acts that safeguards the needs of the employees.This makes it very hard for management to control its employees andensure efficiency at workplace (Snyder, 2013).
Chinamakes up one of the best market place for Starbucks because itencompasses a large population who are luxury product driven. Studiespoint out that China is the leading luxury product consumer in theworld. Entertainment scales up as one of the major drivers of luxuryproducts in the market. If well considered Starbucks stands in abetter position to market its products in China and reap huge profitmargins (Shermer, 2010). China also has higher internet subscribersthat continuous growing each passing year (almost double). Thefigure below depicts China’s internet subscribers.
Thelarge population as well as internet subscribers will serve as abetter market hotspot for the company in launching its entertainmentbusiness in the China.
Starbucksentertainment was my favorite case in the book this is because itcorrelates to real changes in the entertainment industry andintegration with a production sector. Starbucks Company takes a verybold approach in increasing its market base by launching into atotally different field from its normal coffee distribution outletsin numerous countries. What amazes me in this case study is theapproach taken by management in trying to come up with a frameworkthat centers on customers and not the company itself (Shermer, 2010).
Starbucksanalyzed its market base and thought it wise to come up with anentertainment segment in its business strategy that will boost itsmajor activities in the market. While customers are served withcoffee they can also get access to their latest songs, that they willcustomize themselves to suit their preferences. This is a verycrucial formulation by the company since it tends to attract manycustomers who would prefer the application in coming back to get itsmajor product. The company’s strategy to adopt Hear Music is aimedat ensuring that the company opens up its market scope to manycountries in the world. Hear Music will be able to create Starbucksreputation even in countries that do not have its outlets (Halper,2014). This is an indication of information technology adoption byStarbucks which makes this case study important to analyze.
HOWWILL YOU MEASURE YOUR LIFE?
Thereare two main concepts addressed in the article howwill you measure your lifethey include planning and motivation. Clayton depicts that a personor a business without a plan is like a blind person walking on abridge without a guide. The author goes further to point out thatmost organizations and individuals fall because they are notadequately prepared to tackle challenges that come their way. It isprudent to establish guides in any endeavors to get rid of any wastesand irregularities in our way. Clayton possesses to ask a question onwhat motivates us or businesses in carrying out the daily activitiesthey undertake. Motivation is what keeps people working andstruggling to attain their goals in life (Christensen, 2014).
Iplan to incorporate the two concepts in my post college personal lifeby identifying my strengths and weaknesses, establishing my likes anddislikes and from this I will be able to establish a good plan inline with my abilities. This plan will be geared towards mymotivational framework. This is because I will plan to undertakethose activities that match my abilities and offer a developmentalplatform. Above all the activities must be in line with what I reallywant to achieve. Thus, the two concepts will play a very huge role inmy personal life.
Christensen,C. (2014). ClaytonChristensenâ€™s â€œHow Will You Measure Your Life?â€â€” HBS Working Knowledge.Hbswk.hbs.edu.Retrieved 2 December 2014, from http://hbswk.hbs.edu/item/7007.html
Cole,G. (2013). Grande Expectations: a Year in the Life of Starbucks`Stock20081Karen Blumenthal. Grande Expectations: a Year in the Lifeof Starbucks` Stock . Loughton: Piatkus 2007. ManagementDecision,46(4),673-675. doi:10.1108/00251740810865120
Halper,A. (2014). Starbucks Wars: Chinese Courts Say â€œNo Hitch-HikingAllowedâ€. TheChina Quarterly,188(01),1155. doi:10.1017/s0305741006000725
Hansen,P. (2012). Growth Plate Injury Prevention. Strategies,16(4),23-24. doi:10.1080/08924562.2003.10591027
Shermer,M. (2010). Starbucks in the Forbidden City. SciAm,285(1),34-35. doi:10.1038/scientificamerican0701-34
Sindhwani,P., & Ahuja, V. (2014). A Study of Online Co-Creation Strategiesof Starbucks Using Netnography. InternationalJournal Of Online Marketing,4(1),39-51. doi:10.4018/ijom.2014010104
Snyder,M. (2013). State of the Profession: The Starbucks Effect. Academe,92(1),70. doi:10.2307/40252902