Starbucks against Vietnamese coffee culture

Starbucks against Vietnamese coffee cultureStarbucks betray name is one of virtually admired famous orbicular tune in the domain (Moore, 2006, p.7). Moreover, in terms of marketing, Starbucks al representations is the example study for plowing slightly it no-hit marketing and vaneing strategies. Because of the fall of the economy, it was forced to close 700 stores that were unable to crystalize enough profit and cut thousands of jobs in America, UK, and Australia afterwards a drop in sales in 2008. The brand was as well as facing the issue of their clients choosing a cheaper option over their higher coffee prices. Starbucks thusly was applauded for their handling of crisis situations. This piece allow apply relevant theory and practice of strategic marketing focal point to explore the situation, contri exactlying factors and solicitude of marketing strategies in the financial crisis sector, reflecting the feelings and identifying recommendations relevant to Starbuc ks International Coffee.OVERVIEW OF STARBUCKS COFFEEThe Seattle-based Starbucks Corporation, which founded in 1971, is nowadays a multinational coffee and coffee house chain with over 15,000 stores in in all 50 states and 43 countries outside of the United States (Pham, 2008, p.8). Serving consumers e genuinelywhere (Moore, 2006, p.12.), the aim of Starbucks is to establish and leverage its powerhouse bountifulness specialty coffee through rapid expansion of retail subprograms, new dispersal channels and successful make it coffee a worldwide product for one million millions nodes. Appendix 1At Starbucks Coffee, the mission is to inspire and nurture the human spirit one person, one cup, and one locality at a time. (Clampitt, 2009). Starbucks has been and always be proud of their commitment to maintaining shade, integrity, and gravid taste of coffee through the logical argument of its harvest and the high value placed on the employees/partners worldwide (LeFort, 2008) . Appendix 2,3Store Expansion outline of Starbucks Throughout the 1990s, Starbucks had started developed a three-year geographic expansion scheme (Clampitt, 2009) then Starbucks store launches grew to a greater extent successful in revenue (Creamer, 2007). Not just selling the coffee, Starbucks model with opening new stores next to doors and intimate grazeping malls caused them to increase in value than all other competitors (Cebrzynski, 2007) In 2004, Starbucks announced to analysts that it had a very aggressive target to double its rate of expansion. Their stated goal was to grow to 15,000 stores in the US. According to the report in an article, Starbucks has more than 13,000 locations around the world, and has overstretched itself with the long-term goal of 40,000 stores worldwide (Woodward, 2007, Clark, 2008). Appendix 4, 5, 6 There is a raised question that whether it is a bad seam decision for coffee chain Starbucks to expand its brand too quick. (Cebrzynski, 2007) is also suspicious that has Starbucks lost its Starbucks experience by growing that big? (Business Trouble brewing, 2007) pecuniary CRISIS AND COMMODITIZATION OF THE BRANDA crisis, according to (Br hold, 2003) is a decisive moment, a turning point, a time of great difficulty, then marketing cannot possibly be in crisis. Mr Schultz, Starbuckss chief executive officer, saw the crisis coming. He had discovered the problem of their own exploitation strategies Stores no longer keep back the experienced soul with the warm feeling of a neighbourhood store. At the beginning of 2007, he did warned about the commoditisation of the brand that the expansion from 1,000 to more than 13,000 shops over the ago cardinal years, in evidence to achieve the appendage, development, has led to a series of decisions that make a watering gobble up of the Starbucks experience. (Businessweek. 2007). The decline of Starbucks is the result of over expanding previous years, has been criticized by those who opp ose globalization such as ( Klein, 2009) sooner of opening giant stores on the outskirts of town, Starbucks chooses locations right in the appreciation of the inner bea already salutary with all kinds of coffee house. This strategy relies heavily on the cost reduction by purchasing bigeminal quantities at wholesale prices resembling(p) Wal-Mar, however, affected more by the competitorsThe rapid growth has obviously caused Starbucks rough problems. For the number 1 time in its 37-year- history Starbucks lost customers and profits collapsed 97% (Jagger, 2008) during the fourth quarter of 2007 after the ubiquitous coffee chain was forced to absorb the effect of frailening demand. The footfall had declined in the UK, where it has two other big coffee retailer Whitbreads Costa and Caff Nero as well, -$6.7 million after tax, comp ard with a $158 million profit for the same quarter last year. (Lee, 2008). Although club officials still do not believe growth is an issue (Cebrzy nski, 2007), first time in five years, Starbucks was knocked out of first place in the coffee-and-doughnuts house by Dunkin Donuts (Creamer, 2007). And it was the biggest faller in the index by 7 points to 42 out of a realistic nose candy. (Leroux, 2008)Issue ReasonsAs (Schindehutte et al., 2008) argues that some(prenominal) subject is clearly affecting the ability of firms and business units to swear performance ), suffering from a rough economy and its own strategic missteps, Starbucks had to admit their own mistakes, much of which is self-inflicted (Ignatius, 2010) In current economy, as a genuine dilemma of any big business, while trying to expand, Starbucks not only boast to deal with other factors like competitors and the mortgage crisis, they also competing with themselves. Size may have brought success to Starbucks, but it has also led to issues of brand depersonalisation. In the rush to open more stores, Starbucks is experiencing what all successful brands do when t hey chance upon from being a small, niche firm to a global entity (Golding,2009). Moreover, there atomic number 18 some extra affections from the environment, such as The brands toilet line has been hit by the rising costs of raw materials. now Starbucks isnt for some people said Howard Schultz, CEO of Starbucks (Not enough froth Starbucks, 2008). Fancy Starbucks coffee has also struggled to compete with cut-price rivals such as McDonalds and Dunkin Donuts, as these traditionally food- heightened outlets have begun to sell their own premium and reasonable coffee offer (Clark, 2008). As the financial crisis has spread to the real economy, a perfect attack of negative factors affecting the consumer (Cebrzynski, 2007). The flagging economy and soaring gas prices are responsible too (Leroux, 2008). Consumers are worried of rising gas prices, energy bills, declining home values, the weak dollar, tighter credit, therefore giving hard esteem to how they spend their money. They even already scale back on restaurant dining that made restaurants are slowly creeping out of their thoughts.STRATEGIC MARKETING MANAGEMENT TO SOLVE PROBLEMSCrisis counseling is much more than coping with a crisis, it is identifying, studying, forecasting, stopping and avoiding crisis as well. (Clampitt, 2009) Continuous cleansement and monitoring in business operation can detect and prevent an upcoming crisis (Rhee Valdez, 2009). Effective marketing can contribute to a firms growth through mend anticipation of market opportunities, calibration of risks, a tighter linkage of technological possibilities with market concepts, and hurrying adjustment to shifting market need and competitive moves. (Day, 2003) For their part, market-driving firms such as Starbucks is demonstrating how business model figure results in sustainable advantage and superior long-term performance in a wide range of industries. (Schindehutte et al., 2008). When a crisis or disaster strikes, companies must ana lyze and choose from many strategic plans. One way they do this is by using a deck up analysis a strategic planning appliance used to evaluate Strengths, Weaknesses, Opportunities, and Threats. The goal of a SWOT analysis is to identify key internal and remote factors that affect the desired outcome. Strengths and weaknesses are internal to the high society and include things like wage/benefits, corporate culture, leadership, marketing, and operations. Opportunities and threats are external to the ships company and include things like government regulations, competition, and economic and social forces. (Clampitt, 2009) The focus for the strategic management to understand the market and industry processes of Starbucks and must be able to integrate valid and reliable SWOT analysis so as to determine future strategies for business development and growth in the global market.SWOT AnalysisThe SWOT analysis will provide enough awareness for the Starbucks and its business management and operations with regards to their strategic management implying relevant points for their resources as well as market approaches and processes in station to go along in shape and in control of their business environment. Applying a SWOT analysis to Starbucks global expansion strategy shows why they have been successful overcome the crisis. Appendix 7The business strategy of Starbucks is identical to the corporate level strategy, focusing on coffee-related products as the premier purveyor of the finest coffee in the world and maintenance of great environment for every staff member in its retail stores. Continual quality improvement is crucial to competitive success and the perfect symbol for the dilemma that faces world trade (Schindehutte et al., 2008). Therefore, it is typical to give the promises to improve serve, reduce growth and expand marketing efforts for responding to a decline in customer traffic (Business Trouble Brewing, 2007). Equally as important, company should not lose sight of their brand inheritance (Cebrzynski, 2007). A long term business strategy built upon the hundreds of little things on a effortless basis which is the key to customer relationships in the future (Cannon, 2002).Re-energizing Starbucks ProcessWhen a decline in customer traffic happens to any chains like Starbucks, its a signal that the company should re-examine their positions (Cebrzynski, 2007). It is the market that provides signals both to the entrepreneur and marketer regarding what value is needed, when it is needed, and how it should be delivered (Schindehutte et al., 2008). Starbucks needs to go back to its roots (Cebrzynski, 2007) and make its brand special again. Company brought back the original CEO, Howard Schultz to restore the companys shine. Starbucks knows it needs to do something new (Skenazy, 2008).Re-structure Back to fundamental principleChairman Howard Schultz take back the reins from ousted CEO James Donald, not only closed 100 unspecified, unde rperforming locations with weak sales but also closed some stores across the US simultaneously in order to retrain to improve customer experience at American stores and to get back to the core (Creamer, 2007). Besides, Geoff Vuleta, CEO of New York innovation consultancy Fahrenheit 212, had a radical solution that open a chain of microstores employ solely to making coffee. No travel cups, no music, no machines, just amazing beans and a trap range of the best-in-the-world coffee drinks,, just moving brand back to the basics.Resource-led Strategy Focus on service quality experienceEveryone should know that nothing is better for a business than a satisfied customer who can talk to others about their experience with our service (Cannon, 2002). First of all, Starbucks really needs to refocus on the luxury coffee experience the smells, the sounds. They also gained customers positive experience in stores by well-trained staffs who were knowledgeable about the companys products, who eage rly communicated the companys passion for coffee, and who had the skills and personality to deliver consistently pleasing customer service (Whats Brewing at Starbucks, 2011). Starbucks wanted to turn all Starbucks employees into partners, give them a chance to share in the success of the company and make clear the connection between their contributions and the companys market value (Thompson Strickland, 2009).From its founding, Starbucks set out to be a third place to spend time, in addition to home and work.(Business Trouble Brewing, 2007) To remedy that, the company plans to improve its service. Field managers will spend more time in the stores to make sure service really does get better, and new baristas will receive additional training. (Cebrzynski, 2007). New breakfast line, featuring a proprietary cook and chilled food program was unveiled in September. Howard Schultz said the smell of the sandwiches overpowered the aroma of coffee, one of the chains soupcon features (Jennin gs, 2008). Following the lead of other coffee chains, Starbucks will also be offering a customer loyalty card for the first time. (Ahmed Walsh, 2008) In an attempt to rvetain loyalty in the UK, Starbucks has introduced free coffee refills for anyone get a hot drink and has ramped up its hitherto negligible marketing activity (Lee, 2008). Market-led Strategy temper management can take a while for a bad reputation to hit your bottom line, or a good one to increase profit (Cannon, 2002). As word-of-mouth is a prime marketing tool, Brian Collins, chief creative officer of New Yorks Collins design research firm, suggested company should better use its digital resources to learn the tastes of regular customers and fleet target audience by creating social networking tools like Facebook or Twitter and blog page. They also used it both as a way to stay interacted, involved with their current customers and look for new ones. According to TNS Media Intelligence, Starbucks spent $40 milli on in the first nine months of 2007 (York, 2008), launched its first national TV campaign to defend its ownership of the coffee segment from onslaught by McDonalds, Dunkin Donuts and other chains (Cebrzynski, 2007).They also created the site My Starbucks Idea (http//mystarbucksidea.force.com/), which gives consumers the opportunity to post ideas, suggestions, to vote and discuss about what they want to see from Starbucks. If they gain support, these ideas may be chosen to carry out to castrate the company in its business process, product development, experience development, and store design.(Jarvis 2008) Change will not happen overnight, Mr. Schultz said. It will evolve over time, but I ensure you a positive change will occur. I, along with our dedicated partners, will strive to exceed the expectations of our customers every day. (York 2008)RECOMMENDATIONS FOR FUTURE STRATEGYAs the company expands, the culture and corporate strategy must be maintained for success (Jennings, 2008). For the recommendation, Starbucks should be able to sustain the companys growth and make the business become strong global brand. What could Starbucks do to make its stores an even more elegant milieu that welcomes rewards and give surprises to customers? What new products and new experiences could the company provide that would belong to and be associated with Starbucks? And how could Starbucks reach people who were not coffee drinkers? Starbucks must continue the fixed-price purchase commitments in order to secure an able supply of quality green coffee beans and to limit its exposure to fluctuating coffee prices in upcoming periods. (ThompsonStickland, 2009)Some experts therefore believe its unbranded stores initiative is not only logical, but necessary. It needs to focus on the inherent values of being local it needs to employ local staff it needs to be suitably different from Starbucks corporate image.It is a phenomenally successful company that started off as a local brand bu t grew incredibly quickly, he says. The brand was originally loved and respected by everyone, but the corporate world decided it had become too big.However, David Anderson, director of Cada Design Group, argues that most consumers dont have issues with the brand. Consumers are looking for a home away from home, and want it in an environment that isnt so heavily corporate branded. They think customers are brand loyal or product loyal, but they are not. It comes down to convenience and providing a space people want to be in. It wants to regain a conjunction personality and the image of the neighbourhood coffee shop.(Golding, 2009)CONCLUSIONStarbucks Coffees heyday was back when the corporation announced the business results in the first quarter this year reached U.S. $ 2.7 billion, with net profit of 242 million dollars (nearly 300% increase compared to same period in 2009). This is also the result of efforts to revive the brand had been likened to a giant.From the case of Starbucks , what is the lesson for business? Because development needs, the business diversified products and services is perhaps natural. A long time, Starbucks has gone with their own race shop system extension. This group has become the pride of American business people. The market strategy of Starbucks is a classic lesson in the textbook business. More services they desire to acquire a lot of customers. In fact, they have plummeted, but in time to edit.So go in-depth development (product quality, service key) to get a good foundation for expanding business. But do not be too ambitious expansion width, expansion, missing the core. merchandise once again demonstrated its magic to bring Starbucks back to the track. The results of consumer research shows that of Starbucks, the main indicators in the business achieved a high level of satisfaction over a year ago.Although Starbucks enjoyed success in the past few years, there are a few obstacles looming. Since the popularity of the coffee hous e idea has grown, some cities neediness to issue regulations on the coffeehouses due to complaints of late night patrons becoming uncontrollable. In conclusion therefore, Starbucks was the only company with anything close to national market coverage. The companys efforts to greatly increase its sphere of strategic interest via its joint ventures and the move to sell coffee in supermarkets that represents such ongoing drive in order to continually reinvent the way Starbucks operate its business. (Thompson Stickland, 2009)Amidst the environmental, social, and economic challenges and changes for Starbucks, its chairman, president, and chief executive officer, Howard Schultz, pledges Even during this time of change for our company, one thing that will never change is our long-standing commitment to conducting business in a responsible and ethical manner. expiration forward, we will only deepen our approach by continuing to integrate social and environmental tariff in every aspect of our business. With its various and numerous awards in Best Business, Most Admired Company, 100 Best Corporate Citizens, to name a few, Starbucks is becoming one of the most respected brands in the world. (Clampitt, 2009)