Assessment I - Marketing Strategies 1

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Details of Assessment
Term and Year Term 1, 2019 Time allowed 4 weeks
Assessment No 1 Assessment Weighting 60%
Assessment Type Individual Strategy Report
Due Date Week 7 Room
Details of Subject
Qualification BSB61315 Advanced Diploma of Marketing and Communication
Subject Name Marketing Strategies
Details of Unit(s) of competency
BSBMKG605 Evaluate international marketing opportunities
BSBMKG606 Manage international marketing programs
Unit Code (s) and
BSBMKG608 Develop organisational marketing objectives
Names
BSBMKG611 Manage measurement of marketing effectiveness
Details of Student
Student Name Daniela Lutten Leitão
College AAI Student ID 201837789
Student Declaration: I declare that the work submitted is my

own and has not been copied or plagiarised from any person Student’s
or source. I acknowledge that I understand the requirements Signature: ____________________
to complete the assessment tasks. I am also aware of my
right to appeal. The feedback session schedule and Date: _16_/_08_/_2019_
reassessment procedure were explained to me.
Details of Assessor
Assessor’s Name
Assessment Outcome
Assessment
Competent Not Yet Competent Marks / 60
Result
Feedback to Student
Progressive feedback to students, identifying gaps in competency and comments on positive
improvements:
Assessor Declaration: I declare that I have conducted

a fair, valid, reliable and flexible assessment with this
student. Assessor’s
Signature: ___________________
Student attended the feedback session.
Student did not attend the feedback session. Date: _____/_____/________
Marketing Strategies, Assessment No.1 v1.0 Last updated on 11/06/2019 Page 1

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Purpose of the Assessment
The purpose of this assessment is to assess the student in the following Competent Not Yet
learning outcomes: (C) Competent
(NYC)
BSBMKG605 Evaluate international marketing opportunities
1.1 Assess international trade patterns and identify their likely importance for the
business
1.2 Research international business and electronic commerce market factors, and
assess opportunities to enter, shape or influence the market for their likely
contribution to the business
1.3 Identify international markets operating under free trade or protectionist
arrangements and estimate likely ease of entering and trading successfully
1.4 Identify international trade policies and agreements and estimate their likely
impact on international marketing opportunities
2.1 Identify and analyse impact of economic, political, social and cultural factors
affecting international marketing opportunities
2.2 Investigate international market trends and developments to identify market
needs relevant to the business
2.3 Identify new and emerging business and electronic commerce markets, and
assess opportunities to enter, shape or influence markets based on their fit with
business goals and direction, and their likely contribution to the business
3.1 Analyse and rate acceptability of political, financial stability and corruption risk
factors of potential market
3.2 Analyse and rate acceptability of legal and regulatory requirements, and trade
barriers to potential market
3.3 Relate risk factors to international business cycles in terms of economic
conditions and estimate their impact on potential market
4.1 Identify and analyse international marketing opportunities according to their
likely fit with the organisation’s goals and capabilities
4.2 Evaluate each opportunity to determine its impact on current business and
customer base
4.3 Use an assessment of costs, benefits, risks and opportunities to determine
financial viability of each marketing opportunity
4.4 Determine probable return on investment and potential competitors
4.5 Describe and rank marketing opportunities in terms of viability and likely
contribution to the business
BSBMKG606 Manage international marketing programs
1.1 Select viable international marketing opportunities and develop objectives
consistent with the organisation’s capabilities and resources
1.2 Identify measurable international marketing objectives consistent with
organisation’s strategic direction, and identify nature and extent of goals for
international market
1.3 Formulate strategic objectives and related key performance indicators by
product, service, country or international grouping, and overall
1.4 Develop a risk management strategy to manage contingencies, and ensure
marketing objectives are met in accordance with overall organisational
requirements
2.1 Research international marketing opportunities and determine global or
customised approaches for promotion of products or services
2.2 Evaluate options for choice of marketing approaches
2.3 Select a marketing approach to meet marketing objectives, international
market conditions and consumer preferences
3.1 Evaluate business culture and consumer preferences, and identify compatible
marketing structures
3.2 Identify options for operational marketing structure and rank them for strengths

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and weaknesses in servicing international markets
3.3 Choose operational structure that best fits international market and product or
service
4.1 Communicate international marketing objectives across the organisation to
suit culture, customs, levels of knowledge, experience and needs of personnel
4.2 Identify and agree roles, responsibilities and accountabilities of staff and
contractors involved in all elements of marketing effort
4.3 Develop communication strategy to ensure personnel responsible for each
element of marketing mix work together to meet organisation’s marketing
objectives
4.4 Manage marketing effort to ensure it is directed towards areas of greatest
potential for the organisation
4.5 Manage integration of marketing, promotional and any sales activities in
accordance with international marketing objectives
5.1 Monitor product, pricing and distribution policies in relation to market changes,
objectives of marketing plan and organisational requirements
5.2 Monitor overall marketing progress against performance targets to ensure
activity, quality, cost, and time requirements are met
5.3 Analyse, review and revise marketing outcomes and objectives
5.4 Analyse successes and performance gaps as to cause and effect, and use to
improve international marketing performance
5.5 Analyse changes in market phenomena, and identify and document their
potential impact on international marketing objectives
5.6 Document review of marketing performance against key performance
indicators in accordance with organisational requirements
BSBMKG608 Develop organisational marketing objectives
1.1 Confirm organisation’s mission, vision, purpose and values from current
organisational materials or from owners, directors or senior management
1.2 Analyse strategic organisational documents to identify organisational
directions and targets
1.3 Complete a situational analysis identifying factors impacting the direction and
performance of the business
1.4 Identify legal and ethical requirements for the organisation
1.5 Document and confirm strategic direction of the organisation with owners,
directors or senior management, and identify its impact on marketing activities
2.1 Evaluate effectiveness of previous marketing and positioning strategies to
identify lessons learned
2.2 Analyse current key products or services and major markets for strengths,
weaknesses, opportunities and threats
2.3 Evaluate previous marketing opportunities captured by the organisation, and
examine and document their profitability
2.4 Evaluate marketing performance against previous objectives, targets to
identify critical success factors, and areas for improvement
3.1 Identify and analyse marketing opportunities for viability and likely contribution
to the business
3.2 Use an assessment of external factors, costs, benefits, risks and opportunities
to determine scope of each marketing opportunity
3.3 Analyse opportunities for likely fit with organisational goals and capabilities
3.4 Evaluate each opportunity to determine its likely impact on current business
and customer base
4.1 Develop objectives in consultation with key internal stakeholders that are
attainable and measurable, and that identify nature and extent of what is to be
achieved
4.2 Ensure objectives are consistent with forecast needs of the business and
market
4.3 Ensure objectives are compatible with the organisation’s projected capabilities,
resources and financial position

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4.4 Ensure objectives are compatible with the organisation’s direction and
purpose, and meet legal and ethical requirements
BSBMKG611 Manage measurement of marketing effectiveness
1.1 Review current marketing strategies and marketing plans, and research range
of metrics available to measure effectiveness of relevant marketing processes and
functions
1.2 Analyse effectiveness of current marketing metrics used by the organisation in
each key marketing operation
1.3 Critically analyse how existing marketing metrics link to strategy, and
opportunities to improve links
1.4 Plan to address any issues with use of marketing metrics within the
organisation
1.5 Design criteria for retaining existing marketing metrics, and for selecting new
manageable and cost-effective metrics
1.6 Gain approval for design or redesign of strategy from senior management
2.1 Set objectives for measurement and evaluation of marketing effectiveness
2.2 Select methods to measure marketing performance for each marketing
process or function, tailored to the organisation s brand or unique positioning
2.3 Calculate costs of gathering and analysing data with assistance of relevant
financial experts
2.4 Design and record implementation strategy for measuring and analysing
marketing performance, or make recommendations for improving current strategy
3.1 Design and implement appropriate communication and training strategy, so
marketing and other relevant personnel fully understand their role in measuring
marketing effectiveness
3.2 Supervise design and implementation of specific metrics
3.3 Plan and monitor work activity to ensure adherence to strategy for
measurement of marketing effectiveness
3.4 Design process to review and evaluate marketing metrics on a regular basis,
and if organisational strategy changes
Assessment/evidence gathering conditions
Each assessment component is recorded as either Competent (C) or Not Yet Competent (NYC). A student
can only achieve competence when all assessment components listed under “Purpose of the assessment”
section are recorded as competent. Your trainer will give you feedback after the completion of each
assessment. A student who is assessed as NYC (Not Yet Competent) is eligible for re-assessment.
Resources required for this Assessment
 Computer with relevant software applications and access to internet

 Weekly eLearning notes relevant to the tasks/questions
Instructions for Students
Please read the following instructions carefully
 This assessment has to be completed In class At home
 The assessment is to be completed according to the instructions given by your assessor.
 Feedback on each task will be provided to enable you to determine how your work could be improved.
You will be provided with feedback on your work within two weeks of the assessment due date. All other
feedback will be provided by the end of the term.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps
in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be
deemed competent for this unit of competency.
 If you are not sure about any aspects of this assessment, please ask for clarification from your
assessor.
 Please refer to the College re-assessment for more information (Student Handbook).

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ORGANISATION DETAILS
Note: The organisational details used in this assessment have been sourced (and to some extent
paraphrased) from the organisation’s website and other relevant documents of the organisation. The
information used here is solely for educational purpose.
CASE ORGANISATION: STARBUCKS COFFEE (INTERNATIONAL/GLOBAL

CONTEXT)
Starbucks website - https://www.starbucks.com/
Brief History:
The first Starbucks location opened in 1971. The name is inspired by Moby Dick’s first mate. This
name and the mermaid logo were inspired by the love of the sea, from Starbucks original location in
Seattle Washington in the heart of Pike Place Market. Starting as a single shop specializing in high
quality coffee and brewing products the company grew to be the largest roaster in Washington with
multiple locations until the early 80’s. In 1981, current CEO Howard Schultz, recognized a great
opportunity and began working with the founder Jerry Baldwin. After a trip to Italy to find new
products, Schultz realized an opportunity to bring the café community environment he found in Italy to
the United states and the Starbuck’s brand we know today began to take form. Selling espresso by
the cup was the first test. Schultz left Baldwin to open his own Italian coffee house Il Giornale which
found outrageous success and in 1987 when Starbucks decided to sell the original 6 locations,
Schultz raised the money with investors and purchased the company and fused them with his Italian
bistro locations. The company experienced rapid growth going public in 1992, and growing tenfold by
1997, with locations around the United States, Japan and Singapore.
Starbucks also began expanding its brand. According to George Garza in his article the history of
Starbucks the following product lines were added:
• Offering Starbucks coffee on United Airlines flights.
• Selling premium teas through Starbucks’ own Tazo Tea Company.
• Using the Internet to offer people the option to purchase Starbucks coffee online.
• Distributing whole bean and ground coffee to supermarkets.
• Producing premium coffee ice cream with Dreyer’s.
• Selling CDs in Starbucks retail stores. Starbucks uses minimal advertising and has grown on word of
mouth and brand recognition.
Their mission statement from the company profile is as follows:
“Our mission is to inspire and nurture the human spirit – one person, one cup, and one
neighbourhood at a time.”

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Their core competencies can be defined as high quality coffee and products at accessible locations
and affordable prices, provided a community to share in the coffee drinking experience, and variety of
choices. The also value ethics and good business practices and are a leader being voted one of
2010’s most ethical businesses by Ethisphere magazine for the 4th year running. (“Starbucks”)
Starbucks is facing its own struggles however as it saw sales start slipping before other companies
did in the recent recession. According to Melissa Allison in her article Starbucks has a new growth
strategy — more revenue with lower costs, Starbucks has closed 900 stores and eliminated 34,000
jobs. Starbucks new strategy is to refocus on some of the areas that decrease risk and up front
investment. This includes expanding foreign stores, with aid of partnerships that share risk and costs,
selling VIA instant coffee and other products in retail and convenience stores, and reinvigorating the
Seattle’s Best Brand coffee.
A statement from CFO Troy Alstead this March paints this picture:
“We clearly hit a wall and didn’t do very well in the 2007/2008-time frame. From here forward, when
we grow Via, Seattle’s Best Coffee and consumer products, there’s less investment for each dollar of
revenue.”
This new strategy has inspired some optimistic feedback. Morningstar investment research firm has
increased estimate of Starbucks shares from $4 a share to $24 after the statement of revamping the
brand. Product innovations and international expansion not only make the business potentially more
profitable but defend them against competition. International partnerships increase challenges but
also create new ideas in new markets that can then be translated back to markets.
Starbucks is in a mature stage of its life cycle. It was founded over 20 years ago and it has
experienced rapid growth in the last 2 decades. However, within the last few years its growth has
slowed and has even had to close locations. They are now focusing efforts on previous endeavours
and international expansion.
Old Value Chain:
Bean and
Product Product Take-home
ingredient Storefront
Development Distribution products
selection
The above is the value chain for Starbucks. The upstream portion of the value chain shows the
product development from adding teas and international influences, to the research that took place to
develop the VIA instant coffee line. They also search the globe for Fair Trade suppliers of high-quality
beans. These products are then distributed to corporate storefronts, franchise locations, airport
terminals, grocery stores and more, and finally offer ground coffee and gift cards to take home.

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Links to organisational website and relevant information on the organisation:

Starbucks Australia website – https://www.starbucks.com.au/Home.php
Why Starbucks just can't crack the Australian market -
https://www.sbs.com.au/news/thefeed/story/why-starbucks-just-cant-crack-australian-market
Starbucks brief on Wiki - https://en.wikipedia.org/wiki/Starbucks
Starbucks Statistics - https://www.statista.com/topics/1246/starbucks/
Starbucks race together campaign - https://www.fastcompany.com/3046890/the-inside-story-of-
starbuckss-race-together-campaign-no-foam
Marketing Strategy of Starbucks - https://www.cheshnotes.com/2017/01/marketing-strategy-of-
starbucks/
How to Create a Remarkable Brand - https://coschedule.com/blog/starbucks-marketing-strategy/
Marketing Strategy of Starbucks - https://www.marketing91.com/marketing-strategy-starbucks/
Relevant resources on Starbucks - https://www.marketingweek.com/brands/starbucks/
Plans on marketing - https://ninjaoutreach.com/starbucks-marketing-plan/
Communicating the message of quality via multiple channels - https://research-
methodology.net/starbucks-marketing-strategy-3/
Starbucks Positioning - https://www.thebalancesmb.com/starbucks-use-of-market-research-propels-
the-brand-2297155
Starbucks: best and worst marketing campaigns - https://awario.com/blog/starbucks-best-and-worst-
marketing-campaigns/
CONTEXT, PROBLEM SCENARIO & REQUIREMENTS:

For addressing the assessment criteria and to answer the questions provided below, you may refer to
the above given case and organisation (Starbucks Coffee) or you can select your preferred
organisation. You are required to demonstrate in-depth knowledge on how to develop marketing
objectives for an organisation, identifying international marketing opportunities, plan on managing
international marketing programs and measure marketing effectiveness. To complete the assessment
tasks successfully, you will need to acquire some organisational information to conduct some analysis
for both understanding environment and organisational. You are also expected to do your own
external secondary research to provide adequate information and to understand the market. You will
be required to use the template/structure as provided below. Marking criteria and weights for each
section are also provided within the structure.

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Assessment Type: Individual Report
TABLE OF CONTENTS and Mark Allocations PAGES MARK MARK

ALLOCATED RECEIVED
1. Conduct detailed industry analysis 5
2. Conduct an internal and an external diagnosis 5

of the company.
3. Discuss your key marketing strategies and 10

core competence
4. Analyse the key issues the organisation is 10

facing and suggest alternative action
5. Discuss product innovation and international 10

market opportunities
6. Discuss a new value chain for organisation 5

which might be required for the changing
coffee market
7. Identify your international marketing 5

objectives and operational plan
8. Evaluating, measuring and monitoring 5

marketing effectiveness
9. Identify Australian and International policies 5

and legal factors affecting marketing
operations
10. Reference
11. Appendix
TOTAL 60

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Conduct detailed industry analysis (5 marks)

In this section you are required to discuss the following:
 Industry Overview and analysis
 Industry Demand Determinants and Profitability Drivers
 Porter’s Five Forces Analysis of the Retail Coffee and Snacks Industry
INDUSTRY OVERVIEW AND ANALYSIS
Starbucks is an American coffee company and coffeehouse founded in Seattle in 1971. In 2018, the
company was operating in 28,218 locations worldwide. The company’s mission is “To inspire and
nurture the human spirit, one person, one cup, and one neighbourhood ar a time”, what requires not
just serving excellent coffee, but also engaging customers at an emotional response.
Starbucks is part of the Retail Coffee and Snacks Industry. This industry experienced a big slowdown
in 2009 resulting from the economic crisis what changed consumer tastes, spending less on luxuries
like eating out, choosing to purchase low-price items instead of high-priced coffee and drinks. Before
that, the industry had a decade of growth consistent. Now, the industry is expected to grow annually
at a rate of 3.9% for the next five years, with a potential to reach $35.1 billion revenues in the US.
This growth would be mainly driven by an improving economy, increase in consumer confidence and
expanding menu offerings within the industry. Starbucks dominates the industry with a market share
of 36.7%.
In 2017, Starbucks results for fiscal continued to demonstrate the strength of its global business
model, and its ability to successfully make disciplined investments in its business and partners.
Consolidated total net revenues increased 5% to $22.4 billion, primarily driven by incremental
revenues from 2,320 net new store openings over the past 12 months and a 3% growth in global
comparable store sales. View Appendix 1.
INDUSTRY DEMAND DETERMINANTS AND PROFITABILITY DRIVERS
The industry’s demand for premium coffee and food/snack products can be affected by a number of
factors, which include the amount of coffee being consumed, the population income and economic
stability, healthy habits, coffee pricing. It’s a very sensitive industry, and all these factors can
substantially affect its growth.
The amount of coffee consumption it a very important factor: with more people consuming coffee
around the world, the revenue of coffee & snack shops is increased. A main cause for that would be
the increase of income, as the economy improves the consumers starts to relax their budget. This
factor has a very positive effect on the market revenue. On the last few years, the amount of people
buying, looking for and consuming coffee has increased exponentially. Since 2012/13, the
consumption of coffee has grown 1,3% a year, view Appendix 2. In result, the amount and variety of
coffee shops has grown as well.
Now, the primary input in the value of chain of the industry are the coffee beans, the variable prices of
coffee beans determines market costs and profitability margins. The world price of coffee had
increased highly a few years ago due to growing demand in other countries and the resulting supply
shortages. Now, how it became more affordable, the market is showing more profitability and lower
costs. View Appendix 3.
Concerning about heath also play an important role in determining the demand in the industry. Lately,
the customers are more worried about what they eat and how they eat; view the growth of vegetarians
and vegans worldwide. This can be a threat to the industry as they become more aware of issues
related to obesity and weight. Because of that, has been a proactive response from the industry

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regarding organic and healthy products, as organic lattes and drinks, and organic snacks, as protein
balls, for example.
PORTER’S FIVER FORCES ANALYSIS
- Competitive Rivalry or Competition (Strong Force)
Competitive rivalry is a strong force faced by Starbucks in the food service and coffee industries. The
specialty coffee market is intensely competitive with respect to product quality, innovation, service,
convenience and price. Starbucks has many competitors of different sizes internationally. Even
having the largest market shares, the company still feels the pressure seeing that its closest
competitors also has a significant market share. The variety of firms is not as large as its number,
what make this force even more threating to Starbucks. The company has to fight a large variety of
companies, within pretty much the same variety of products and services. In addition, Starbucks also
has to fight the fact that, for the customers, most of the times, it has a low switching cost change from
Starbucks to another company. Based on that, competition is one of the top priorities o be faced by
Starbucks.
- Bargaining Power of Buyers or Customers (Strong Force)
This force really affects Starbucks. Again, the low switching costs cause the customers to easily
change from Starbucks to another brands. In addition, the high substitute availability means that the
customers can stay away from the company as much as they want, since they can find many
replacements products. These factors are so strong, that it is hard to pay attention to the fact that
individual purchases are small compared to the company’s total revenues. Even with this weakness,
the bargaining power still remains an priority strategic issue.
- Bargaining Power Of Suppliers (Weak Force)
Despite the individuals suppliers having a moderate size, what can be considerate a moderate
strength, the high variety of suppliers weakens theirs bargaining power. Using as example, the coffee
beans. There are many suppliers of coffee beans around the world, and all of them aim to supply their
beans to the companies as Starbucks. With that, Starbucks can choose which company fits bests
their necessity. In addition, their bargaining power is weakened not only by the variety of suppliers but
also for the large overall supply. As a result, supplier’s bargaining power is a minor issue for
Starbucks.
- Threat of Substitution or Substitute (Strong Force)
This component indicates that it is a strong possibility for Starbucks to be negatively impacted by this
force. The high availability of substitutes makes it easy for the customers to just choose another brand
or product instead of Starbucks. And, as said before, the low switching costs it is also further
strengthen the threat. Many of the substitutes are cheaper than the company’s products. So, this
component is a high strategic concern to the company.
- Threat of New Entrants or New Entry (Moderate Force)
The cost of doing business is variable. It depends of many factors as the size of the shop, the range
of products. The operating cost of a small coffee shop is lower compared to a Starbucks. However,
small shops have lower supply needs, equals to lower supply costs. This is what enables small
business to compete directly with Starbucks. However, brand development has a high cost. This is
the condition that reduces the threat of this force. A small business does not have enough resources
to develop their brand as Starbucks has. The company is internationally known, all this “fame” took
years of hard work and investments, something that s small business cannot make. So, this force
shows to be a significant threat, but not an urgent matter.

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Conduct an internal and an external diagnosis of the company. Use the SWOT and PESTLE
tool to synthesize this information (5 marks)

 Strength, Weakness, Opportunities and Threat for the company
 Political, Environmental, Social, Technological, Legal and Economic analysis for the company
PESTLE ANALYSIS
- Political
One of the main political factors that have affected Starbucks is related to the outsource of materials.
Starbucks it is sourcing its raw material from another countries. This has gathered a lot of the
attention from politicians in the West and, of course, from the source countries, what have significantly
affected the policies of the global company.
Another major factor is the policies like fair trade policy. It is necessary to follow the laws and
regulations in the countries from where the organisation buys the materials.
Also, each country has its on tax policies and employment laws. Starbucks has to consider that every
time the company plans to open a new store in a new country. These can drastically affect the
company and its business, if not be followed correctly.
- Economical
Any global economic change or recession would be a main external problem for
Starbucks. Nowadays, regarding the economical changes in the World, most people have been
changing their consume habit, shifting to cheaper alternatives. This factor dented the profitability of
Starbucks. This can be seen as an opportunity to attract these costumers back, or the company will
continue to lose space in the market. Starbucks needs to understand the fact that the consumers are
now prone to buy low price coffee offered by many local and other competitors around. These
changing trends should be considered in order to maintain the business.
Another factor that may affect the organization is the local currency exchange rates. As mentioned
before, with Starbucks buying raw materials from another countries, it may face higher costs of
imports. An appreciation makes exports more expensive and reduces the competitiveness of
exporting firms, what can result in the raw materials being cheaper, following an appreciation.
As also mentioned above, the taxes can influence any business. Different levels of taxes from
different places can affect how the company operates.
- Social
As stated, Starbucks can even offer more affordable products but it might have to affect the quality.
This will expand the consumer base, including the buyers from the lower and the middle-income. The
eco-friendly, vegetarians and vegan consumers are also increasing. This, what many people call a
“trend”; it is also affecting many businesses, and can push Starbucks to make some significant
changes in their products ad services.
Social factors evolve behaviour patterns and their culture influence. Every place has its on beliefs,
norms, trends. Nowadays, these consumers are expecting something of quality in lower price. The
days where Starbucks was the only or even best option for a cup of coffee are gone. Now the coffee
lovers have many other brands to pick from, which oblige Starbucks to succumb to the changes in
their policies and standards to follow the new culture.
- Technological
Since the initiation of the mobile trend, Starbucks has been enjoying its benefits. The partnership with
Apple for the development of a discount app, it has been extremely helpful.

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Nowadays, the Internet is what keeps the world moving. Every Starbucks store has free Wi-Fi. That is
why is a recurrent event to see people having a meeting, studying, and working, face timing, at a
Starbucks store. They connected two important things to the customers. Now, everyone knows that if
someone wants to work while relaxing with a cup of coffee, the best place for that is Starbucks. This
added a huge value to the brand, enhancing the overall consumer experience.
Despite all that, the rising availability of home-use specialty coffee machines is a threat to Starbucks
because it increases the availability of substitutes to Starbucks products.
- Legal
Starbucks must guarantee that it doesn't abuse any laws and guidelines in the home market and
nations from where they purchase crude materials. It ought to likewise remain alert about presentation
of caffeine generation and utilization related arrangements and guidelines by wellbeing experts.
Every region has its on trade regulations, employment laws, taxation laws, and even licensing
regulations to open and operate a business. Starbucks is as of now performing admirably in these
perspectives. Nonetheless, expanding business guideline, particularly in creating nations,
compromises Starbucks Coffee's entrance to the work advertises. This outside factor likewise impacts
Starbucks through expanded spending for HR.
- Environmental
For the last few years, the company has been working to reduce the environmental impact. It has
initiated a Green store program where all the stores would follow building pro environmental
standards, and also ensure that the designing, building and maintain of the stores evolve those
standards.
To reduce the plastics in the environment, the company is increasing its recycling programmes,
promotion reusable cups, “straw less”, and planning to achieve a greener cup by 2022. The company
has also invested in a solar farm, which delivers enough clean energy to power more than 600 stores.
SWOT ANALYSIS
- Strengths
Starbucks has a large geographical presence across the world, maintaining a 39.8% market share in
the United States and operating in over 62 countries. Starbucks is also the most recognized brand in
the coffeehouse segment and is ranked 60st in the best global brands of 2018, what categorized it as
one of the world’s strongest brands. Almost 70% of world’s population know about this company and
their products. In addition, the company gives a very high importance to the quality of their products.
The company stores are located in some of the most prime and strategic location across the globe.
This has earned them a significant advantage, being able to penetrate major markets and aim into the
customers convince factor. In addition, their stores are visually appealing and have a ‘cool’ factor
attached to it. They provide free Wi-Fi, great music, great service, warm atmosphere and an
environment of community meeting spot, which forms a wider part of the ‘Starbucks Experience’. The
main aim for the company is to make their stores a ‘third place’ besides home and work.
Starbucks has a well-established group of loyal customers cult following status among consumers
and they have also implemented loyalty-based programs to drive loyalty with the Starbucks Rewards
programs and Starbucks Card. In the United States, the company’s membership increased 14% year
over year under the My Starbucks Rewards (MSR) program in the fiscal 2018.
- Weakness
Starbucks pricing police is considered a major weakness to the company. While Starbucks is focused
on their differentiate range of products, with high quality and full of the whole ‘Starbucks Experience’,
people find the prices of the company really high as compared to its competitors and usually consider

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Starbucks as a luxury item. In addition, the company suffers with a reduced affordability of its
products, what causes limitations in their market shares, especially in areas with relatively lower
disposable incomes.
Another weakness for the company is: many Starbucks products are imitable. A small and local coffee
shop could easily develop drinks pretty similar to the ones that Starbucks sells. Even the design and
ambiance of their stores are imitable.
By having a huge and aggressive expansion, and overcrowding market, the company takes their
customers from one store to another, consequently reducing the possibility of long-term growth
targets of Starbucks. This is happening especially in the US, where Starbucks has 13,930 stores.
The culture of coffee is very different in each country. Mostly, Starbucks follows the American coffee
culture that may not be widely accepted in some parts. Australia, for example, has a very different
culture for coffee. They love their coffee with more flavour, more varieties, more specialized. This can
affect the strategies for international expansion for Starbucks.
- Opportunities
The US has becoming more and more saturated every year, and so, it is important to have a good
international expansion strategy. The main market to aim for the next few years is China. Starbucks
has already started with the plan to open 600 new stores until 2022, expanding their physical footprint
to 6,000 locations across 230 cities. As a developing market, China has been demonstrating a
middle-class growth, as well as the adoption of the western culture of coffee drinking. This would
continue to increase the revenues by high double-digit percentages in the next few years.
In the end of 2018, the organization announced a partnership with Alibaba to create a new coffee
experience in China. The main aspect of their partnership is the adoption of Ele.me, Alibaba's food
delivery platform that has three million delivery riders and was valued at $9.5 billion, to pilot delivery
services beginning from September in Beijing and Shanghai. With the expansion of the program to
over 2,000 Starbucks stores across 30 cities.
But Starbucks has not only forged and alliance with Alibaba, but also with Nestle. The associations
declared a worldwide advertising bargain that gives the last "never-ending rights" to showcase
Starbucks' items all around outside its coffeehouses. This coalition will extend the worldwide reach of
Starbucks marks in the shopper bundled merchandise and foodservice classes from the current
amount of 28 to almost 190 nations around the globe.
Starbucks is evolving its product rang with significant innovation around beverages, refreshment,
health, tea and core food offerings. Drinks innovations have been a main contributor to the company’s
growth over the years. Special and seasonal products such as the pumpkin spice latte have been in
the market for 10 years and are very popular. Food has turned into a key development driver. The
organization intends to extend its lunch menu and offer locally important snacks the world over.
Starbucks' greatly discussed night program – sustenance, wine and brew contributions – accessible
at 100 stores is required to be taken off in 20–25% of Starbucks outlets in the US, being relied upon
to include $1 billion in incomes before the finish of financial 2019.
- Threats
With the market being at a developed stage, there is expanded weight on Starbucks from its
competitor’s specialty coffee stores. Another trend, which is ending up progressively well known, is
claim to fame coffee roasters. These organizations are immediate to customer with a developing
growing social media presence and advertising on unconventional avenues such as podcasts. They
can make quality espresso and go direct to the buyer while building up an entire brand around their
espresso including clothing, tumblers, and cups and home preparing alternative, for example, French
and Aeropress. The times of requiring retail to have a fruitful business are finished and this is
converting into the espresso business now.
Many countries have worked around the interest for coffee, as long as the U.S., some even more.
This makes a portion of the more exceedingly created and beneficial areas designated to change in

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the coffee culture. Countries such as these enjoy a very specific coffee consumption culture
pertaining to the coffee itself, the service, and the environmental culture. As Starbucks has not had
sufficient energy to completely adapt themselves to these new beliefs and qualities they can
conceivably build up a negative discernment according to international buyers. This cynicism can
bring losses of international profits that can also limit their opportunities of further expansion into
these foreign markets. Another risk relating particularly to China is the continuous exchange war
among it and US. China could fight back against the exchange taxes, making limitations on outside
speculations and disregarding lawful privileges of remote possessed organizations.
Another possible threat is the volatility of the prices in the global coffee market. In the past few years,
there have been considerate fluctuations in the prices of high quality coffee beans. The organisation
can’t control it, the only possibility it is to try to adapt to it, or changing its own prices or suppliers.
In an undeniably financially coordinated world, a monetary emergency like the one of every 2008
could have a stream down impact from the created markets to the creating markets. This danger
would hurt incomes for Starbucks as purchasers move away from premium item blend to remain in
constrained spending plans during monetary hardships.
Discuss your key marketing strategies and core competence (10 marks):
In this section you are required to illustrate and present
 Your marketing mix which would be the 4Ps (Product, Price, Promotion, Place)
 Core competence involves discussion around company’s innovation, quality of
product/service (such as reliability and performance), customer service, flexibility offered to
employees, any other competencies (such as organisations competitive advantages, superior
internet presence, etc).
MARKETING MIX
- Product
For the first marketing mix content, the organisation continues to innovate its product mix to capture
more of the food and beverage market. The main products categories of Starbucks products are:
coffee, tea, baked goods, Smoothies, Frappuccinos, and merchandise as mugs, bags of coffee, etc.
However, the products are not the only things that Starbucks offers to its customers: it’s the superior
coffee experience. In addition to that, the company offers a high quality and standard products. The
customers are paying for the whole package.
Over the world, Starbucks has all the more then 1000 distinct variations being offered to their clients.
Despite the fact that they were somewhat late to present tea, they chose the procedure of brand
restriction to make it famous. Alongside this, they likewise offer clients various items from season to
season, for example, Frappuccino, strawberry cream in summers and various lattes, for example,
gingerbread latte in Christmas. In the Starbucks store you can likewise discover Starbucks
cappuccino and espresso creators.
- Price
Starbucks pricing strategy is premium. Its products are more expensive than most competing
products. Despite using a high price strategy, the company offers a high quality standard image. And
its top of the line innovation and the assortments it offers alongside the best client experience.
Starbucks began with started with a low cost range at few outlets and providing food the clients who
couldn't be pulled in by its high costs. The bundled items are likewise accessible at supermarkets,
which are similarly less expensive than the ordinary outlet items and effectively accessible to
everybody. This demonstrates Starbucks not just pursues focused valuing in its showcasing blend yet
additionally relative estimating methodologies. The beverages at Starbucks are additionally
accessible in different sizes according to the need and necessity of each client with moment varieties
like demi, short, smaller than normal, tall, grande, venti and trenta. The quality is consistently the most
noteworthy, which aids in keeping up a reliable client base and brand name.

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Starbucks follows a simple line of thought – if the consumers get premium products they wouldn’t
mind paying a little more. So for them quality is the key. The never bargain on the nature of the items
and actualizes severe and stringent quality control measures alongside extraordinary client
administration to legitimize its cost.
- Place
At the beginning, Starbucks used to sell its products through coffeehouses. Eventually, the company
started to offer some of its products through its online store. However, Starbucks ended its online
store operations in 2017. The strategic change reflects the company’s shift to focus on in-store
experience. On the other hand, mobile apps allow customers to easily place their orders online so
they could conveniently get their food and drinks at the stores.
Starbucks utilizes more than one channel of dissemination. They sell their items through organization-
possessed stores or an immediate retail framework. They import espresso beans from the best
greenhouse the procedures it and sells it under their image name. Likewise, they have concurrences
with lodgings, carriers and office espresso providers. This causes them take into account the more
extensive market.
Worldwide, Starbucks is present in more than 70 countries in Africa, North America, Oceania, South
America, Asia and Europe. Starbucks presents a well designed website which contains information on
each and every aspect of coffee making, coffee varieties available, sourcing options, ingredients and
best equipment and makers.
- Promotion
When it started, Starbucks became popular especially by providing the best customer experience and
trusting the word-of-mouth marketing. The organisation also advertises its products through traditional
media such as television and print media; and, of course, the Internet. Sales promotions are used in
Starbucks Rewards. Using the same idea of the loyalty coffee cards, this program involves free
products that customers can avail after purchasing a certain amount of the company’s products.
Starbucks rarely uses public relations, which has not always been successful for the company. A
good example is what happened with the Race Together campaign, which was widely criticized. Still,
the Starbucks Foundation continues its efforts to solve various challenges in society, helping
communities while promoting its brands.
Through its community programs for local communities, The Swastha – consists in a healthy program
and Chai project, developed with ethical sourcing options providing benefits to farmers, coffee, tea
and cocoa sourcing areas; and environment friendly techniques – using recyclable cups, green
building, etc. it clearly displays the responsibilities and actions taken by the company. Apart from this
Starbucks has made the best use of technology for promotions, for example when they did the “tweet-
a-coffee” campaign in 2013; the feedback system through “My Starbucks Idea”, and also the, already
mentioned loyalty program and gift cards with free Wi-Fi, zero charges for selected coffee and milk
options, etc. Another options that attract and increase the interests of the customers are the prepaid
cards, mobile apps, table top power mats for charging, bar codes for cashless payments.
In the last few years, despite all these programs and initiatives, compared with the competition,
Starbucks did not invest a lot of money on advertisement. While McDonald’s normally spent around
727.7 million dollars on advertisement in 2010, Starbucks only invested 16.6 million dollars. Starbucks
used their extra cash on finding and acquiring the best places for their outlets. They organized huge
events in the places where they could open new stores. They likewise had numerous other special
exercises, which included printing data on tee shirts and mugs. Aside from this they additionally
thought of the idea of brilliant associations. This implied naming nearby delegates as their envoys to
embrace their image.
CORE COMPETENCE
For each organization the structure of their upper hand technique assumes a fundamental job. It
causes the organization to continue in this focused market condition. It is consider as a fundamental
instrument to find and arrive at the potential clients. Starbucks is an organization that is acclaimed in
the market and has produced an immense benefit. It is considered as a settled organization in the
market. Be that as it may, its supportability can be influenced if its rivals offer comparative

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administrations and items as offered by the Starbucks Company in the market. In this manner to get
by in the market each organization should have its upper hand system.
Starbucks has a different relationship with its customers and suppliers. They focus in providing the
best experience they can for their customers, with a good good customer service, more value quality
products and access to the Internet and the best coffee. In addition, the company ensure to
encourage and motivates their team, so it can keep both sides satisfied, what also contributes to
improve the customer’s experience. Starbucks is able to sustain in the competitive market because of
it unique competencies which their customers most valued.
Keeping a long lasting growth ii has been possible for Starbucks thanks to their various strategies
related to pricing and product. The company is always developing new products for their new
markets, always maintaining its value and quality. The organisation has figured out how to expand its
benefit and piece of the overall industry with its development procedures and by different joint
endeavours with other related organizations. Especially in the United States, Starbucks has
coordinated effort with organizations like Dreyer's dessert and Sazaby, which further builds their offer
in the market. Starbucks has always concentrated more on its expansion policies. The company has
experienced huge benefits because of it large integration methods and international, domestic and
national expansion.
The core competence of Starbucks has been its capacity to effectively use their strategies to show
their differentiation by offering a top-notch item blend of excellent drinks and snacks. Starbuck's
image value is based on selling the best quality coffee and related items, and by giving every client a
one of a kind "Starbucks Experience", which is gotten from preeminent client administration, spotless
and well-kept up stores that mirror the way of life of the networks wherein they work, accordingly
fabricating a high level of client dependability with a faction following. Its other core competence is its
human asset the executives' qualities based methodology based approach for building very strong
internal and external relationships with suppliers, which drives the successful deployment of its
business strategy of organic expansion into international markets, horizontal integration through smart
acquisitions and alliances that maintains their long-term strategic objective being the most recognized
and respected brands in the world.
Analyse the key issues the organisation is facing and suggest alternative action (10 marks):
In this section you are required to

 Highlight the key issues of organisation (example: challenges of massive global expansion,
barriers to innovation, difficulty in creating new value chain, etc)
 Suggest alternative action which can minimise the issues or strategies to prevent the issues.
Starbucks has a few issues as organisation. In the US, it fast expansion has been a problem. It was
discovered that within same location there were many stores, which further resulted in saturation of
customers. That resulted in a considered number of stores being closed down.
Results of Starbucks are considered as extravagance things. It might be conceivable that in view of
the worldwide monetary downturn the client may think that it’s hard to spend on Starbucks item, which
are minimal expensive when contrasted with their competitors item.
Another big and recurrent problem is the increase in competition. Globalisation has resulted in the
increase in the competition for the Starbucks Company. The Starbucks has to compete in the market
ranging from the various international companies as also with all the local coffee shops.
The speculations made by the Starbucks are to plan their stores is high. This is done so as to pull in
numerous clients and give them charming and reviving background. This can be come about
exorbitant to the organization.
In the last few years there has been a change in the customers behaviour. Shoppers are investing
more energy at home, and a greater amount of them are preparing their very own high quality art

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espresso, various examinations have appeared. Simultaneously, they are additionally expending
progressively prepared to-drink coffee and different drinks.
They are having more access to blend and coffees that before where only available in special places,
like a coffeehouse.
Things have been changing regarding the competition as well, both at home and abroad. At home,
Starbucks is facing growing competition from McDonald’s McCafes and all-day breakfast, as
evidenced by the recent turnaround in McDonald’s sales. Overseas, Starbucks is facing strong
competition from homegrown start-ups that have managed to match and even exceed Starbucks
“third place” model. A good example of that is the Greece-based Mikel Coffee Company, which
features a portfolio of 130 beverages — and an elegantly designed “third place” look, staffed by
carefully recruited and well-trained and dedicated associates.
Additionally Starbucks insufficient promoting technique on publicizing is prevention in the business

development openings. They like to fabricate the brand by advancing the beverages cup-by-cup with
clients. The notice closes until they drink the espresso, lessening the odds to draw in significant
clients. Likewise the thorough extension technique pursued by Starbucks can negatively affect the
organizations brand picture. As partnerships develop there can be an inclination to concentrate too
intensely on expanding yield and areas, and less spotlight on quality and brand picture. Starbucks
needs to remain with its qualities and goals that have made it effective.
Likewise Starbucks strategy of not diversifying can be a reason for worry for the firm. Diversifying
would enable the organization to open numerous new stores with fewer hazards, and make extensive
benefits in doing as such. Due to this the association's innovative work expenses would fall utilizing
the franchisee learning of the nearby market as far as geographic,, psychographics, socioeconomics,
and the neighbourhood nation guidelines.
Increasing is investments in marketing activities and marketing researches are very strong factor that
would help the company to overcome these issues. It is essential to fight directly with the two primary
issues: the growing competition and the insufficient promotion techniques. These could be the
differential to the company to finally conquer the markets where they have lower performances as the
Australian market.
Discuss product innovation and international market opportunities (10 marks)

 Discussion on new range of product or suggest improvement on existing ones
 Differentiation strategy
 Opportunities based on international location, labour market, cost competitiveness, ect
 Opportunities related to global and country specific economic, social and industry directions,
trends, practices and techniques.
 Risk assessment for the opportunities
 Analysis of financial feasibility to implement your strategies
Nestlé today reported the dispatch of another scope of espresso items under the Starbucks brand to
be accessible all-inclusive. The new range comprises of 24 items, including entire bean and dish and
ground, just as the first-ever Starbucks cases created utilizing Nespresso and Nescafé Dolce Gusto
restrictive coffee and framework advances.
Following this idea, Starbucks could consider to launch a whole collection of coffee machines and
tools, to add to its products already been launched. This could help Starbucks to become a reference
in the coffee industry regarding beans and production of coffee.
This initiative would definitely make a difference in the Australian market. Customers really value a
coffee shop it serves a really well known coffee and uses well-known equipment to make it. It could
be another arm that Starbucks could grow from itself.

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Starbucks also does not emphasize on distributing their products to supermarket because of being
concerned with the quality of the coffee; if the coffees were packaged into plastic bags. Investing in
putting all their products and differentials in a place of easy access to the public would be essential. A
coffee house how sells and distributes globally its own coffee, produced, grounded and made it by its
own equipment.
A good opportunity for the company would be to invest in creation of healthier drinks. Most people
today are living a healthier life, cutting sugar, milk, or even becoming vegans. Investing in more
options that can satisfy this crescent wave of customers could make the difference.
The loyalty and reward programs are something to keep and improve. There are 15 million dynamic
Starbucks Rewards individuals, an expansion of 13% from a year ago. Those clients, who utilize the
portable application to request and pay, will in general be progressively steadfast and have helped
support deals.
In the course of recent months, Starbucks likewise included another 5 million computerized clients.
Those incorporate clients, who have utilized the Starbucks application without joining the prizes
program, pursued Happy Hour bargains and got to Wi-Fi in the store by entering in their email
address. The thought is to open a line of advanced correspondence with more clients, even the
individuals who would prefer not to progress toward becoming individuals.
Starbucks utilizes an expansive separation procedure. This system is focused on a more extensive
fragment of the all out market. Starbucks serves a market that is characterized by espresso
consumers. Starbucks has made the association surely understood for fitting to wide clients' needs by
planning requests to meet clients' desires, regardless of how nitty gritty they are. Starbucks is likewise
outstanding for quality items, with stringent rules delineating how their espressos to be readied, as
itemized as coffee must be served inside twenty-three seconds of preparing.
India is also an international opportunity for Starbucks. As the Indian economy seeing high single digit
development, Starbucks sees an immense open door in the developing white-collar class with higher
discretionary cash flow in the nation. While the organization faces extraordinary challenge in India
from espresso chains, for example, Café Coffee Day, which had almost 1,500 stores in December
2014, the general bistro showcase in India is esteemed at $1.1. Billion of which the chain bistro
market is worth almost $300 million. In spite of the fact that it works just 75 stores in India Starbucks
accepts that India is its quickest developing business sector. The organization intends to bring its
customer bundled products, alongside its strength tea brand, "Teavana," to India. Given that India is
overwhelmingly a tea-drinking country, dispatch of Teavana in the nation could help Starbucks gain
clients in the district. It will likewise profit by carrying its versatile and computerized innovation to India
as portable request and pay can lessen long lines in the thickly populated urban territories of the
nation, in this way furnishing Starbucks with an aggressive edge.
Every new plan or action presents its risks. With all these opportunities, Starbucks also is open to bad
results, as previously experienced in Australia.
Sociocultural barriers are one of the big risks that the company face it. Every country and continent
has a different culture and experience regarding coffee. The small coffee shops are easily adapt to
them, but for a company as big as Starbucks, to be able to adapt all its operations to give what the
customers are expecting is risky. Asia, India and Australia are very different markets regarding coffee.
It is important that Starbucks study and research deeply into to the markets to understand how they
work and what the competition is doing right and wrong. A high investment will be necessary, but it is
a risk that the company is willing to take to conclude its objectives.
Launching new products or services is also very risk. It is a high investment that if it goes wrong, it is
a lot of money that is going to be wasted and the company’s profits can be highly affected. The
company can, again, have a good marketing team, well trained and really into making it all happen,
invest and researches, tests; and also working with the right marketing activities. Even doing all that, it
is possible that it may not work. However, all those actions make it easier to reach success than
failure.

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Now, all that is financially possible? Considering all the costs with the creation and development of
new products and equipment, plus the budget for the marketing activities and operational costs, it is
Starbucks able to do all that, financially?
The cost cannot be too high, otherwise even if it works it may take several years to recover the money
invested or even profit on top. How long the company will take to be paid back for all the investment?
It is important to have all that studied and planned, but, as said before, it is possible that even with all
worked out, great planning and great team, some things just don’t go as planned. It is essential that
Starbucks evaluate all the possibilities and if it is worthy it to make these investments in different
markets. It is truth that, if all the efforts and opportunities work, Starbucks will have amazing results,
with a high ROI and a favourable financial impact to the brand.
Discuss a new value chain for organisation which might be required for the changing
coffee market (5 marks)

 Refer to the value chain given in the case and suggest addition to the value chain.
 The development of value chain should consider factors such economical, technological,
cultural, recent trend in coffee consumption, etc
VALUE CHAIN
The value of chain give in the case show that since its start, Starbucks has always been worried
about develop a good product, with international influences, seeing that they have many stores across
the globe. But, it is important to consider all the aspects of all the steps until the product can reach the
customer.
- Inbound Logistics
Since 2010, the company has been restructuring their supply chain. The restructuring initiative of
Starbucks Inbound Logistics involved simplification of supply-chain management and the creation of a
single, global logistics system. Sourcing coffee from diverse coffee beans producers with whom they
have great relationships and built up efficient supply chain management system.
Bringing unroasted Arabica coffee from places as Asia, Africa and Latin America to Europe and US
using big containers. These are delivered to regional distribution centres, where the coffee is roasted
and packaged to be distributed. Along with coffees from regional distribution centres, central
distribution centres also receive deliveries from vendors for a wide range of products starting from
coffee machines to napkins.
As a suggestion that the company has started exploring, is to have the opportunity to grow their own
coffee. Such a shift in the sourcing of products can increase the effectiveness of new product
development initiatives for the business, as the company will have a chance of experimenting with
developing new sorts of coffee.
- Operations
Starbucks has operation in 60 countries with their stores being modelled on company operated stores
and licensed stores. Organization operation-stores are significant for the business since they
empower the administration to watch moves in customer tastes and inclinations and gather data
about market propensities all in all in an immediate way. By the end of fiscal year 2016 Starbucks had
12,711 company-operated stores, which accounts for about 51% of total numbers of stores.
Company-operated stores generated 79% of Starbucks revenues during fiscal 2016. Regarding the
licensed-stores, they represent around 49% of total numbers of stores. Revenues from licensed
stores accounted for 10% of total net revenues in fiscal 2016.
The company has always aimed to have stores operating in the best locations, with high-traffic and
visibility. Varying the size and format of its stores, the company locates them in or near a variety of
settings, including downtown and suburban retail centres, office buildings, university campuses and in

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select rural and off-highway locations. Adding value to its operations, the stores provide an
experience where customers can spend quality time and have access to a cool and relaxing
environment with access to Internet.
However, it would be a suggestion for the company to consider the option of Franchising would allow
the company to open many new stores with less risk, and make considerable profits in doing so.
Because of this the firm’s research and development costs would fall making use of the franchisee
knowledge of the local market in terms of geographic, psychographics, demographics, and the local
country regulations.
- Outbound Logistics
Starbucks products can be purchase by the customer in any of its many stores. Online sales channel
is also utilized by Starbucks for certain range of products such as packaged coffee, tea, drink ware
and drink-related equipment. Also, the company uses some supermarket leading chains, as Walmart
and Tesco; to sell a limited range of its products, such as coffee sachets.
Despite the online options and affiliation with the supermarkets, most of its products are sold in-store
and some through large box retailers. All the payments can be make through point of sale, prepaid
Starbucks Cards and mobile payments.
Aside from supermarket chains that sell constrained scope of organization's items, the
nonappearance of middle people, for example, affiliates or wholesalers is the fundamental wellspring
of significant worth for Starbucks outbound logistics. The organization cooks its items in-house and
sells without anyone else organization worked and authorized stores, accordingly keeping the edge
that generally would have gone to wholesalers and affiliates.
- Marketing and Sales
As mentioned previously, until a few years ago, Starbucks was not open to invest in marketing. The
trust in the strength of the word-of mouth is has always been stronger and a cost-effective form of
marketing based on high quality of products and high level of customer services was the main
channel promoting the brand for years. However, with the continuously growing and intense level
competition, the company and its senior management was motivated to reassess the marketing
strategy Starbucks marketing budget has been consistently increasing during the last five years to
reach USD 351.5 million for the fiscal year 2016.
The total budget is divided and invested into different elements of print and media advertising, sales
promotions, events and experiences, public relations and direct marketing.
The focus and high level of integration of social media and technology into sales processes it is one of
the most solid sources of the company’s value. The organisation has successfully implemented
mobile order and pay system for its products and at the present moment, about 8% of all orders are
placed via mobile devices. In addition, Starbucks has “enabled orders via Amazon’s Alexa last year,
announced that the feature would also be integrated into Ford vehicles later this year.
It would be interesting for the company to continue this investment and even plan to start being even
more involved in new trends, as it is happening with the Amazon. Participating of big events or even
sponsoring an idea, it would keep the brand in the media and in the customer’s mind. Nowadays,
especially in countries as Australia, where the coffee culture is quite different from the American,
earning loyal customers is a tiebreaker in the industry. It is not just enough to provide a good quality
coffee and food, but also provide a more personal and welcoming experience to the customers.
If the company can be more activate with the local communities and show the target that even being a
huge company it also known how to keep the customer service close and personal, probably the
company will bring their word-of-mouth strategy to a next level.
- Service
Having a superior customer services is the core source of Starbuck competitive advantage and this
particular primary activity adds an enormous value to the brand image. Starbucks baristas are in
every case amiably neighbourly and welcome regular customer by their names. Once in a while,

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standard client may get their regular coffee for nothing out of pocket at the circumspection of baristas
as great motion and such acts increment the view of the administration quality to a significant degree.
Moreover, in the midst of regularly escalating boisterous nature of way of life and expanding pace of
the arrangement of client administrations, administration at Starbucks is never surged. It has been
appropriately noticed that "Starbucks invests a great deal of energy estimating and improving how
well they coordinate their clients' speed desires—conveying a custom refreshment in only minutes
they don't let the requirement for speed drain the life out of the Starbucks experience.
Identify your international marketing objectives and operational plan (5 marks):

 Marketing Objectives should have a (SMART) approach
 International Marketing Activities and how that can be executed effectively
 Forecasting any future risk and risk preparing management plan
 Market promotion programs keeping in mind the cross-cultural communication and
negotiation styles
In the Asian market, especially China and Japan, the fast growing competition has been a problem.
But the real big failure for Starbucks has been in Australia. The company’s first appearance was in
Australia 2000, where it was able to grow until 90 stores around the continent by the end of 2008. But
Starbucks moved too quickly, and grew faster than its popularity.
Australia’s already-thriving coffee culture also proved to be a challenge for the American brand. The
Australian cafe industry got more than $6 billion in revenue in 2018. Starbucks didn’t fit Australians’
tastes. The company served sweeter coffee options than Australians preferred, all while charging
more than the local cafes. In its first seven years in Australia, Starbucks accumulated $105 million in
losses, forcing the company to close 61 locations.
And that is why Australia is in the centre of the marketing objectives to be accomplished. So, as main
objectives, Starbucks is planning to:
- Increase its sales in 20% in the Australian and Asian markets within 2 years;
- Increase market share in the coffee scope globally, especially Australia;
- Increase the amount of stores globally to 40,000 until the end of 2022;
- Grow average customer spend by 10%.
To reach these objectives, it is important to plan well its marketing activities and some market
promotion programs. Starbucks predominantly uses its website, social media channels and in-store
displays to promote the brand and the products. It also uses sales promotions, events, direct
marketing, print media, and PR in an integrated manner to multiply the impact of its promotions.
Starbucks is known by is premium price. Year after year, the company only increases its prices, what
have been causing of it losing space in the market for its competition. Price changings are necessary.
The product prices are quite higher as compared to that of its competitors. Initiatives relating to cost
reduction like rationalizing global retail network are implemented for improving profit margin.
Exploring different strategies is also important to try to grow in a tough market as the Australian.
Using fear as a trigger can be a powerful action. Using the fear of people of missing out it is a great
opportunity. According to research, 60% of Millennials make impulsive purchases driven by fear of
missing an opportunity. Employing time limited or bared promotions and a seasonal/occasional menu
to create a sense of urgency in people’s minds is an option. “Take the offer today (or right now) or it
will be gone”.
The company is also well known for its heavily content marketing strategies to attract customers and
keep them engaged. Continue to engage in this strategy is also a very important part of its marketing
strategies plan. Their content has a certain quality, a certain look and feel to it that portrays a high

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image of the brand. Great options are creating challenges for the customers with rewards involved;
linking promotions, special activities or even products to big events as Christmas or Halloween.
For all these ideas to work, it is also important to turn the marketing team into brand ambassadors,
People who really believe in the brand and will work to bring the best to its work.
Joining all that with a good PR job, that is normally a defect area in Starbucks is can really bring great
results to the company’s performance in the market.
Every strategy though, has its risks. Increasing the investments in these markets and not obtaining
the expected results can be a big blow to the organisation. That is why it is essential that the company
to keep in mind that it is possible to happen.
One possibility is overcoming the budget or the investments: is a big risk within any marketing plan.
Mistakes can happen anytime, but having a strong planning, good researches, and good people work
behind the scenes, can avoid that the company has to spend more money that expected.
Another possible risk is the competition. In these markets the competition is getting stronger every
year. After experiencing a big failure in the market, Starbucks has to keep going with the whole
planning and always tracking the competition responses to its marketing strategies.
Lastly, the cultural chock of not giving what those customers from these specific market are looking
for. This can be another downfall for the brand. A good market research and a full understanding of
these market and its customers is very important to avoid it to happening again.
Evaluating, measuring and monitoring marketing effectiveness (5 marks):

 Discuss customers value satisfaction
 Marketing contribution to revenue and ROI
 Changes in brand awareness
 Marketing channels and platforms used and their conversion rate
Starbucks praise their customers in a high level service, providing the workers an extensive customer
service training in order to make their experience the best experience possible. Also, the service is
fast and the customers have the option to have loyalty plans, which give them good advantages when
they are regulars. To measure and monitor that, it is important to always keep track in the online
evaluation tools as the Social Media, Google and foods apps as Zoomato, to keep track and respond
all the evaluation made it by the customers. For Starbucks, it is really important to keep a high level of
customer’s value satisfaction, seeing it is one of the organisation differentials.
With one shop opening every 15 hours in China, Starbucks marketing spreads worldwide and still
keeps foreign countries to invest in the brand in their own soil. Their main revenue is the in store
selling, which represents 91% of total revenue whereas the marketing revenue totalizes around 11%,
which includes new customers, upselling advertised products and like mentioned before, new
franchises around the world.
The new results created by the marketing campaign and new strategies will result in return of the
investment. Increasing the sales and the market share of the company, especially in countries like
China and Australia in essential.
Starbucks is a reference when it comes to coffee and it’s brand awareness can be a mind changing
when it comes to customers deciding from which brand they should buy their coffee, naturally
because of the success of the company they are bound to go to Starbucks whenever they think about
the name. But nowadays Starbucks, in order to keep growing, especially in countries like Australia,
they need to adapt even more to the customers which are getting more demanding regarding the type
of milks and dairy free products, they need to incorporate these healthy values into their brand to be
even more prestigious in this scenario. Keeping track of the new trends and changes within the brand
awareness is very important to continue its work.

T-1.8.1_v3
The brand started to invest heavily in marketing through social media recently, they appear on
Facebook, Twitter, Instagram, Pinterest, Youtube and even on Google Plus. Not forgetting as well the
email marketing. The focus on the Social Media will be Instagram and Facebook. The target uses
these two medias to lookup for the best options for coffee and breakfast. So the investment to have a
nice looking and appealing feed is very important. By doing so, they created an important customer
engagement through their online marketing promotions.
It is important to measure the conversion rate of these medias. How many people access their
Facebook or Instagram page? How many people watch their stories? There is a lot of interaction
between the customers and the brand in Social Media?
Also, as the company is already familiar with the traditional media, TV and print, the idea is continue
to use it as a support to the other, not as a primary option. Seeing that most of the target it is
concentrated in the Social Medias and Internet, the traditional medias will just reinforce the idea
spread throughout the others.
After the new strategies take place, it is also important to analyse the competition response to that.
They have changed their strategies? They react to the company’s changes? Were they affected by it?
This is also part of the plan success and important to learn what it worked and what to improve next.
A good way to accomplish all these is to have an Marketing Audit realised. It is simple a thorough
evaluation of all aspects of the organization that can bring valuable results.
Identify Australian and International policies and legal factors affecting marketing
operations (5 marks):

 environmental matters, human rights, labour relations in marketing
 identify and explain key provisions of relevant legislation and codes of practice affecting
aspects of marketing operations
The government, through its contracting rules guidelines and techniques, directs the manner in which
organizations work with it. It not just effectively urges private companies to partake in communicating
premium when it buys items and administrations, yet it additionally makes a huge effort and spends
heaps of cash in effort projects to discover great, qualified independent ventures to be its providers so
as to maintain a strategic distance from legitimate variables that would influence their business.
Ordinarily, it gives data that encourages independent companies to offer with negligible hazard, along
these lines dealing with the lawful factors in the business.
Any business that is organized as a legal element is liable to the state law that oversees its activity
and direct. There are various sorts of business elements. For instance, organizations, restricted
associations, organizations, constrained obligation organizations, restricted risk constrained
organizations and constrained risk organizations all of which have distinctive lawful status and issues.
On the off chance that a business is looking to get financing through various sorts of speculators, it
might be liable to lawful issues, for example, security law. For example, a choice to offer promissory
notes, a kind of credit to your financial specialists, will subject the legitimate factor influencing
business to state and government guidelines and security laws.
In addition, are also the contract laws. In the event that the company is to enter a contract with
someone else or element, at that point contract law is authoritative. This additionally has a unique
zone that is included straightforwardly with components influencing business, for instance,
government contracts, which is otherwise called government acquisition laws.
Regarding to employees and labour laws, it is important to consider a few things. Different
governments have passed laws to protect the interest of employees. These laws ensure them against
out of line separation at work and when applying for employments. It guarantees that nobody is
oppressed based on such things as race, religion, sex, age, or colour.

T-1.8.1_v3
It is also primordial that the company considers the working conditions. According to the law,
employees must receive protection when working with dangerous machines; at the workplace,
employees should be given clothing and equipment that meet the highest safety standards;
employees should have a reasonable temperature at their workplace; the highest hygienic standards
at the workplace and washing facilities should be met for the sake of employees; employees to have
enough breaking periods while working; business should uphold the freedom of association end
effective recognition of the right to collective bargaining; the elimination of all forms of forced and
compulsory labour; the effective abolition of child labour.
When talking about labour laws, it is also important to consider the immigrants. There are special laws
for them, especially in countries where they are allow to work by the law. Low payment rates and long
hours are very common to happen seeing that most of the times the immigrants have to work to
survive in a different country that may not give them fair opportunities. In this case, the immigrants
provide a ready source of relatively affordable labour that keeps the cost of business low and
elevating profits. The companies have to consider that are laws to protect them and they are people
who also have rights, even not being citizens.
In case of trading and consuming, the organisation has to keep in mind that they are specific laws for
that:
- Weight and Measures Act: These laws ensure that the goods sold are weighed on Standard
weighting equipment;
- Trade Description Act: This law ensures that it is illegal to deliberately give misleading impression
about products;
- Consumer Credit Act: According to this Act, consumers should be given information of the credit
agreement and should be made aware of the interest rates, length of loan while taking a loan;
- Sale of Goods Act: This Act declares that it is illegal to sell products with flaws or problems and that
any goods sold conforms to standards.
All nations have their own environmental laws. But it is known that, nowadays, all of them take it very
seriously. Environmental protection is important to keep the world spinning, and to have a business
an organisation has to take them into consideration. Some industry sectors are specially regulated.
These regulations control the manufacturers and importers of hazardous substances, which normally
need a registration, always following the rules of each country or region. Not every country allows the
sale and commercialization of every substance. This is a health matter as well as environmental.
When opening a business, a company has to consider how its products or services may affect the
environment and if all its aspects are according the law.
In the matter of marketing and advertisment, the company has to consider the follow:
- When promoting your products or services, you need to ensure that any branding, statement, quote
or any other representation is not false or misleading;
- Component pricing is when the price of a product or service is advertised or displayed in separate
parts. For example, when the single price of a car is displayed and additional on road costs are listed
separately. If the company advertise using component pricing you must also provide the full price
inclusive of additional costs in a more prominent way;
- Must not do bait advertising, that consist in where a product is advertised at a certain price without a
reasonable supply. Bait advertising is illegal if a business sells the product knowing that they cannot
meet expected demand.

T-1.8.1_v3
SOURCES AND REFERENCES USED
1. https://www.investopedia.com/articles/forex/080613/effects-currency-fluctuations-
economy.asp
2. https://www.focus-economics.com/commodities/agricultural/coffee
3. https://www.businessinsider.com.au/starbucks-needs-to-fix-traffic-problem-2018-
1?r=US&IR=T
4. https://2012books.lardbucket.org/books/challenges-and-opportunities-in-international-
business/s06-02-political-and-legal-factors-th.html
5. http://www.supplychain247.com/article/starbucks_as_an_example_of_the_value_chain_mode
l
6.

T-1.8.1_v3
APPENDIX
Include any attachments, facts, figures, pictures, diagrams, brochures, web screenshots, etc that you
have discussed in your plan and may relate to explain the e-marketing plan more clearly.
Appendix 1
Starbucks Financial Performance
SOURCE: Starbucks` 10-K, 2017

T-1.8.1_v3
Appendix 2
Coffee Consumption Growth
Appendix 3

T-1.8.1_v3
Coffee Prices
Note: Arabica Coffee prices, in USD cents per pound (lb). Daily prices.

Assessment I - Marketing Strategies 1

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T-1.8.

Student Declaration: I declare that the work submitted is my

Assessor Declaration: I declare that I have conducted

Marketing Strategies, Assessment No.1 v1.0 Last updated on 11/06/2019 Page 1

Purpose of the Assessment

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and weaknesses in servicing international markets

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Resources required for this Assessment

 Computer with relevant software applications and access to internet

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CASE ORGANISATION: STARBUCKS COFFEE (INTERNATIONAL/GLOBAL

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Old Value Chain:

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Links to organisational website and relevant information on the organisation:

CONTEXT, PROBLEM SCENARIO & REQUIREMENTS:

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Assessment Type: Individual Report

TABLE OF CONTENTS and Mark Allocations PAGES MARK MARK

1. Conduct detailed industry analysis 5

2. Conduct an internal and an external diagnosis 5

3. Discuss your key marketing strategies and 10

4. Analyse the key issues the organisation is 10

5. Discuss product innovation and international 10

6. Discuss a new value chain for organisation 5

7. Identify your international marketing 5

8. Evaluating, measuring and monitoring 5

9. Identify Australian and International policies 5

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Conduct detailed industry analysis (5 marks)

INDUSTRY OVERVIEW AND ANALYSIS

INDUSTRY DEMAND DETERMINANTS AND PROFITABILITY DRIVERS

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PORTER’S FIVER FORCES ANALYSIS

- Competitive Rivalry or Competition (Strong Force)

- Bargaining Power of Buyers or Customers (Strong Force)

- Bargaining Power Of Suppliers (Weak Force)

- Threat of Substitution or Substitute (Strong Force)

- Threat of New Entrants or New Entry (Moderate Force)

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In this section you are required to discuss the following:

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In this section you are required to

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Additionally Starbucks insufficient promoting technique on publicizing is prevention in the business

Discuss product innovation and international market opportunities (10 marks)

In this section you are required to discuss the following:

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In this section you are required to discuss the following:

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- Marketing and Sales

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Identify your international marketing objectives and operational plan (5 marks):

In this section you are required to discuss the following:

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Evaluating, measuring and monitoring marketing effectiveness (5 marks):

In this section you are required to discuss the following:

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