Starbucks Test Case
Starbucks has shown significant growth in its market and can be considered as a leader because of its overall position globally. The business has grown continuously over the years and there is no indication of the market slowing down. Even though Starbucks had to close some of its stores during the recession in United States of America (USA), it still needed up with a sales growth. So it is evident that the business is thriving and the opportunities are there. The sales figures are though pointing to the global market for growth opportunities.
Starbucks utilizes the premium Arabica beans for most of it coffee products. The coffee beans are primarily sourced from Brazil and Columbia. Both these countries have had issues in increasing its output due to damaged crops and disappointing harvest. This incident has affected the global coffee prices to be increased to record levels in 14 years during 2011. Starbucks will need to manage this price increase carefully especially because of the financial conditions across the globe. Sudden increases in prices could turn loyal customers away. Starbucks need to be looking for alternate sustainable suppliers to meet his increasing demand. They need to recognize the potential opportunities of using Tata which is the Indian counterpart to support their global demand for coffee beans.
Starbucks recent joint venture in India with Tata has led to them losing their brand identity in India. India was a market where it was possible to start the business without going into a joint venture approach. However, Starbucks decided for a joint venture approach with Tata tea. As a result of this Starbucks will be featuring 2 brands on its famous green and white signs.
Starbucks main income is its local market which is USA. The revenue growth here in comparison to the global market has been much lower. The revenue growth doubled for global market, however other than India Starbucks haven’t planned