Global Marketing Management Global Cultural Environment - PowerPoint 2 by s981nv

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									                            MKTG 3215-090
                                 Fall 2011
                            Mrs. Tamara L. Cohen




           Global Marketing
             Management


              Case Study:
Class #4      Starbucks
Starbucks
Readings for this class:
• Course Pack reading # 11:
  “Starbucks’ quest for healthy growth: An
  interview with Howard Schultz”
  Allen Webb; McKinsey Quarterly, March 2011


• Other resources of your own choice
                 BACKGROUND
• Excellent core idea
• Young dynamic company
• Very rapid growth nationally & internationally due to
  changes in consumer behavior & booming economy
• Wall Street pressure to maintain rapid growth rate of 20%
• Non-coffee products 16%
• 1st international market: Japan
• 1987 Howard Schultz bought out bosses
• 1994 17 coffee shops Seattle
• 2009 >16,000 outlets in 44 countries
• 1999 281 stores overseas       2009 5,000 stores overseas
• 2006 stock price >$40
• 2009 stock price >$20
• 2011 stock price $36.69 (9/14/2011)
                                                                    controllables
                   PROBLEMS                                         uncontrollables

1.    “Growth became a carcinogen” – chasing growth, Wall St. pressure
2.    Growth without discipline (cannibalizing, predatory real estate practices, etc)
3.    Underperforming stores; closed stores open < 18 months
4.    Comparisons of same-store sales statistics is supposed to illustrate
      growth/health, but actually skewed decision-making (p.4: teddy bears).
5.    No cohesive strategy for growth nationally or internationally (“vision”)
6.    International strategy seems to be just go with the mainstream big-name
      emerging markets (China, India, Brazil)
7.    Constraint of “human capital” (want to attract world-class people”)
8.    No evidence of globalizing top mgt/board for more global perspective
9.    No succession planning evident
10.   No evidence of supply chain carbon literacy
11.   Approaching mature phase of life cycle in US / market saturation
12.   Innovations (non-coffee products & services) have had mixed success
13.   Changing lifestyles (health issues vis-à-vis coffee consumption)
14.   Economic downturn
15.   Operating with local partners overseas compromises profits
16.   Threats to intellectual property rights (legal risks - overseas rivals/copycats/pirates)
17.   Barriers to entry / operation overseas (legal, political, cultural, economic)
18.   Rising prices of coffee beans
  PROBLEMS     COURSES of ACTION                                    ACTIONS

1.    Growth “carcinogen”               1. Stop responding to Wall St.
2.    Growth without discipline         2. Devise & apply strategy
3.    Underperforming stores            3. Articulate vision & conform to it
4.    Same store sales comparisons      4. Halt same store comp’s
5.    No growth strategy (“vision”)     5. Articulate vision & conform to it
6.    International strategy weak       6. Devise & apply int’l vision & strategy
7.    Constraint of “human capital”     7. Commit to globalizing top personnel
8.    No globalizing of top mgmt        8. Commit to globalizing top personnel
9.    No succession planning            9. Start succession planning a.s.a.p.
10.   No supply chain carbon literacy   10. Get educated re CO2 & environment
11.   Market saturation in US           11. More energy in growth overseas
12.   Innovations had mixed success     12. Subject innovations to ‘vision’ test
13.   Changing lifestyles               13. Recognize changes & ‘adapt or die’
14.   Economic downturn                 14. Address economy in advertising
15.   Overseas partners share profits   15. Transfer pricing. Franchising?
16.   Overseas rivals / copycats        16. Address legally or via advertising
17.   Barriers to entry overseas        17. Study alternative strategies
18.   Rising prices of coffee beans     18. Get more involved with suppliers
     RECOMMENDATIONS
• Develop cohesive growth strategy nationally
  & internationally.
• Consider emerging market targets carefully,
  to avoid same old national problems of
  impressive growth masking undisciplined
  international expansion.
• Cultivate the best ‘human capital’ & commit
  to globalizing management personnel.
            CONCLUSION
Starbucks has a very strong brand and a
  record of impressive aggressive growth.
Strong cash flow can enable risk-taking.
The company faces challenges in the future
  to sustain acceptable corporate growth
  and profitability by consolidating its market
  presence nationally, addressing
  international political, legal, cultural and
  economic challenges, and careful planning
  of emerging market growth.
   EXECUTIVE SUMMARY
Starbucks’ major strength is its dominant global
  brand. The company has strong cash flow, and
  focused, talented management.
Starbucks is challenged to reclaim its previously
  impressive growth by following the national
  strategy to excel as “both a retailer and a
  purveyor”, and by expanding and developing
  international markets, especially emerging
  markets. Howard Schultz wisely recognizes the
  “cultural differences in every market”.
Next class: Exam # 1 Monday Sept.26

Preparation:
Review PPTs & your notes from classes 1 - 3
Review your notes from elevator speeches in class
Review homework assignments and assigned readings
Review your notes from speaker presentation
Sample exam question

								
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