Starbuck in Vietnam - Essay Example

Proposal: A leading coffee producer company, Starbuck is bringing or introducing its in Vietnam. Starbuck is an international corporation located in Seattle, Washington founded by Jerry Baldwin. This project aims to introduce new beverage in Vietnam called Starbuck Tribute Blend and for company expansion in Vietnam (identity wiper). Starbuck Company grows rapidly around the globe and therefore, has plans to continue spreading all its wings worldwide (Byerlym, 2012). Starbuck Tribute Blend in Vietnam Starbuck Tribute Blend is currently not in Vietnam. This project aims at introducing this new brand of Starbuck to the Vietnamese people. Starbuck has over 17,000 stores worldwide. Starbucks distinguish products by operations, location and quality of products it sells (Hanna, Asa & Christina, 2005).  Starbuck competitors include McDonalds, McCafe and Krispy Kreme.  Starbuck coffee company opened its first coffee shop in 1998, in the United Kingdom. The main challenge that Starbuck coffee company expects is to experience is competition. Starbuck coffee prices range from $1.75 to $3.50 which is inclusive of taxes depending on coffee the consumer wants. According to Jeremy 2012, “ Compared to other cafes prices, Starbucks is one of the most expensive café shops in the world, which a number of consumers find the prices are exaggerated” This is in comparison to Costa Café and Cafe Nero. Starbuck has experienced fluctuations in profits since 2005 (Matthew, 2008). According to Jayson 2010, its profits have increased in a large magnitude. Starbuck wishes to start a profit making business venture targeting the young population of Vietnam. It seeks to introduce a coffee brand and type from another country that perfectly meets the requirements of young population of Vietnam (Starbuck, 2011). The young population demands a product that is affordable, relatively cheap and superior quality. Starbuck being the number one coffee merchant in the world, its products quality should not be compromised (Adcock, Al Halborg & Caroline, 2001; Paul, Alan, & Arun, 1994). Vietnamese population should be given the opportunity to enjoy Starbuck blend although it is a limited edition blend. The implementation strategy should be unique so as to pave the way for other Starbuck products. Healthy alternatives should also be put into consideration so as to cater other target populations so that the company may attain most market share. Market research should be carried out to know the needs of the Vietnamese young population to be aware of their needs, characteristics and likes (Annual Report, 2010). The product that can be affordable to the young population of Vietnam, one that gets adapted from other countries is the Starbuck tribute blend. Starbuck tribute blend is available in different countries, and it is the most appropriate to introduce to the young population of Vietnam. This is because it is relatively cheap and affordable costing up to $ 14.95 per 1lb. Although this is the price offered in United States, pricing strategies must be applied to determine the price of Starbuck tribute blend in Vietnam (Estelami, 1997). This is because United States is different from Vietnam. United States is economically stable where as Vietnam is a developing country. The population living in Vietnam is different from those in United States, in that they are not financially secure, like United States (Chekitan, & Schultz, 2005). When introducing Starbuck tribute blend, Starbuck should review the value chain so as to lower it prices compared to other rivals such as the coffee bean. This way customer will be pulled away from other brands to the tribute brand and increase sales of Starbuck tribute blend (Adcock, Al Halborg & Caroline, 2001). The introduction of Starbuck tribute blend in Vietnam is for a profit venture; therefore, it should generate profits. Starbuck tribute blend should compete with other coffee brands in Vietnam to be the desired choice of young population (Tan, 2012). The strategic plan and competitive advantage will enable the Starbuck company be the desired choice. Starbuck tribute blend should have core competency that is better than its competitor and valued by the young generation of Vietnam (Joshi, 2005). The firm that will offer Starbuck tribute blend to the Vietnamese should focus its operations on core competencies. Introduction of a new firm in Vietnam with its own financing is appropriate. This is to be in direct control of all activities in Vietnam in regard to the Starbuck coffee brand. Its own financing will enable it to carry out business activities and make business decisions in an effective manner. Although this is a business risk, empowering the new firm financially will be able to compete well against its competitors as it will be able to make decisions faster. The introduction of the new firm to be in control of the Starbuck coffee blend in Vietnam will need carefully planning. This involves planning in managing of finances and business management. In Nicole’s article 2012 0n Starbucks introducing new beverages and highlight company growth. Strategies in planning The introduction of this new firm will require a skillful written business plan containing researched information about the presumed business. The personnel to work on the firm should be selected tactful in order to select people who are skills and have experience. They should know how the coffee retail market operates so as to carry out activities of the firm skillfully. The personnel should be selected based on the ability to perform the company’s activities well. Employees who can embrace teamwork and work with other people should be selected as well as those who are best placed to act within organization values. Employees should be intelligent and able to make decisions in cases of contradictions (Yi-Chia, 2006). . Starbuck Company and the board of directors should ensure that the new firm conducts itself responsibly and committed in conducting a profitable business venture (goals and progress 2010). The main focus of the firm should be customers’ needs. Carefully planning need to be put in place in the introduction of this new brand in Vietnamese. A skillful written business plan containing researched information about the presumed business will be required. Standards of other Starbuck retail outlets in the world must be maintained by the new firm. Starbuck is number one coffee firm in the world therefore, good planning must be put in place to avoid compromising the company. The new firm should maintain the standards of other Starbuck retail outlets in the world (Starbuck, 2012). This is by maintaining the stores in Vietnam eco-friendly, air-conditioned and clean. By doing this, it will not only attract customers but also welcome them as they go to the stores. It should reinforce Starbuck mission to nurture the human spirit. This mission can be reinforces by offering a quality product that is the Starbuck tribute since it is renowned for its superior quality. Opening stores at many neighborhoods in Vietnam will peg its presence in people’s hearts, competitors and customers (Fred, 1996). The profits of the new firm offering Starbuck tribute blend will come from direct sales from the sale of Starbuck tribute blend to young population of Vietnam. The firm will directly sell the Starbuck tribute blend to the target market. The location of the new firm, therefore, has to be strategic so sell the product directly to customers. Directly selling the product to the customers will generate most profits to the new firm because it will be in direct control of the products directly. This means that there will be no intermediaries; therefore, the profits will be directed to the firm. The firm should be strategically positioned so that customers can acquire products with ease. This can be achieved by locating it in many neighborhoods, in Vietnam ("When Ads Get Personal”, 2001). Hierarchy tree for evaluating product launch strategy (Yi-Chia Chiu, 2002) Table on strategies to be applied in introduction of Starbuck Tribute Blend. Strategic concerns Product strategy:- Innovativeness and new product development Cycle time Business strategy:- Cost leadership, differentiation, core competence, complementary resource Market strategy:- Target/position, growth/potential Rivalry:- Product advantage, threats of competitors Marketing concerns Product:- Branding and breadth of assortment Promotion:- Promotion expenditures and sales force intensity Price:- Skimming and penetration Channel:- Distribution expenditures and numbers of channel Organization concern Structure:- integration, differentiation and co-ordination New product development organization:- project team, R&T team and Product/marketing managers Culture: - Involves openness and delegation. The price of Starbuck tribute blend can range from $ 14.95 per 1lb to $ 15.95 per 1lb since this is a new product being introduced in Vietnam. The price of Starbuck tribute blend should not be too expensive and too cheap so that the customer will not have mixed reactions about the brand. When the cost of the product is exceptionally high, number of customers will reduce. This is because they opt for cheaper substitutes. If the Starbuck tribute brand gets priced lowly, the customers might think it is not of superior quality and if priced expensively the customers will think it is for the upper market (Dolan, Robert, Simon & Hermann, 1996). This price will be inclusive of taxes. The price of Starbuck tribute blend is affordable since it will offer the product directly without intermediaries. Starbuck tribute blend gets offered on limited edition. This is to plan the market for other Starbuck products; therefore, limited edition is a terrific choice. The new firm should offer incentives to motivate the customers to buy the Starbuck Tribute brand so that it may gain popularity (Sivaan, James & Hemant, 2006). The new firm should put into consideration introducing other products that blend with the Starbuck tribute blend so that it may appeal to the young generation. Introducing new products to the market will attract new customers so as to safeguard the market of Starbuck tribute coffee in case it falls (Jerry, & David, 2001). Starbuck tribute blend is likely to receive competition from coffee brands such as Trung Nguren, Cao Nguyen, Tay Nguyen, Café Ong Tho, French Plantation, The coffee Bean and BlueCloud. Trung Nguren has over sixty franchises in Vietnam. The Starbuck tribute blend immediate level competitors are expected to be, the coffee Bean and Trung Nguren since they are currently the choice of Vietnam. The coffee Bean & Tea Leaf is the main competitors of Starbuck Company in Vietnam. The Coffee Bean & Tea Leaf is an American chain of companies. It is owned by International Coffee & Tea, LLC which has headquarters in Los Angeles, California. The distribution channel of Starbuck tribute blend at first will be direct sales by the firm. A well formulated distribution strategy is required to solve chicken and egg problem. Other channels distribution channels will be introduced later when the products as gained popularity. The distribution channel should ensure there is a steady flow of Starbuck tribute blend so that customers have continued flow of the tribute coffee blend. This will attract and make them stick to the same blend until it gains consumer loyalty (Robinette, Lenz & Claire, 2000). The main nature in which the distribution channels products should be appropriate. This includes ordering, handling, shipping, display, storage, promotion, and selling and information feedback. Promotion and getting consumer feedback is vital for the development of the new firm promotion creates awareness of the product. This is so that customers get to know about the introduction of the new product into the market (Kotler, Gary, Veronica & John, 2010). After customers use the Starbuck tribute blend, the customers should be asked how they think about the product. This is to know how the product is doing in the market and how to improve it and which products they want introduced in the Vietnamese market. This is especially from customers who have lived in other countries and know about other Starbuck products (Robbins & Judge, 2007). The new firm in Vietnam should look for a supplier that has quality coffee; this is because Vietnam coffee is not of exceptional quality. Importing the Tribute Blend might be expensive, but the young people of Vietnam will still buy it since they want to identify with high society. The Starbuck tribute firm in Vietnam will utilize the same technology that is being used by other Starbuck stores and companies. This technology will enable the firm in selecting the suppliers that meet Starbuck standard. The introduction of Starbuck tribute blend will have no significant ethical issues in Vietnam. This is because it will use the same policies as used in other countries. Starbuck competitor “The Coffee Bean” offers WI-FI access to most of its locations, therefore; Starbuck should try to use when starting this business venture. This WI-FI access will attract young generation since they are technology conscious and are informed (Christensen & Clayton, 1997). Starbuck in Vietnam aspires to introduce Starbuck tribute blend to the young generation of Vietnam who are trying to adopt Western life style. Most of the young population is educated or have lived in developed countries. Some of these young people might have used Starbuck tribute blend while in US. Conclusion The Starbuck in Vietnam is expected to offer a quality coffee to young population of Vietnam. There may be other coffee brands in Vietnam, but this brand is expected to offer superior quality. A marketing strategy needs to be applied since it is likely to face high competition from other coffee brands and local coffee shops in Vietnam. This is because the products are offered at significantly low prices. If customers find the tribute blend expensive or unpopular, therefore, opt to go coffee shops for coffee or cheap products (Christensen, 1997). Strategic objectives planned well to generate returns and increase earnings for the company. After the establishment of the new firm in Vietnam, it is paramount to increases its market share through the buildings of many coffee shops and café s so that it may benefit from many opportunities coming up in Vietnam (William, 2010). Customers in Vietnam should experience the same treatment as those in United States. There should be carefully considerations on cultural norms and values amongst Vietnamese people. 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