Starbucks' Problems: A Detailed Analysis and Strategic Solutions

This report delves into the problems Starbucks faces in international markets, particularly in Australia, and offers solutions using a systems thinking approach. It addresses issues such as stock management, competitor threats, aggressive growth, product taste, advertisement effectiveness, and customer orientation. The report utilizes a Rich Picture diagram to visualize the problems and CATWOE analysis to provide a comprehensive overview. Ultimately, the analysis aims to provide actionable recommendations for Starbucks to improve its market strategy, enhance customer satisfaction, and increase sales in the competitive Australian market, highlighting the importance of understanding local consumer preferences and adapting business strategies accordingly. Desklib provides access to similar solved assignments and study resources for students.

Running Head: DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
DETAILED ANALYSIS OF PROBLEMS FACED BY STARBUCKS
Name of the Student
Name of the University
Author Note

1DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Executive Summary
The aim of this report is to solve the problems related that was identified in Part-1 of the
report. In this report the problems will be rectified and solved. The report also include Rich
Picture diagram which will visualise the problems that Starbucks is facing and CATWOE
analysis will give a complete overview of the organization.

2DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Table of Contents
Introduction............................................................................................................................3
Discussion.................................................................................................................................4
Solution to the Problems related to Stocks-.........................................................................4
Avoid Stock-Outs and Increase Sales-...............................................................................4
Automate the Process-.....................................................................................................4
Competitors Issue-............................................................................................................4
Aggressive Growth Issues-................................................................................................5
Product Taste and Pricing Issue-.......................................................................................5
Advertisement Related Issue-...........................................................................................5
Customer-Oriented Issue-.................................................................................................6
Rich Picture Diagram-.......................................................................................................6
CATWOE Analysis-.............................................................................................................7
Conclusion................................................................................................................................8
Recommendation.....................................................................................................................9
References..............................................................................................................................10

3DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Introduction
This report is basically an extension of the previous report where the discussion was
mainly focused on the problems or issues that Starbucks faced in International markets
especially in Australia. In this report by using System thinking approach solutions are
provided related to the problems that are mentioned in Part-1 of this report. Rich Picture
diagram and CATWOE analysis helps in better understanding of the problems and solutions
are provided in the form of a diagram in Rich Picture analysis.

4DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Discussion
System Thinking Approach
Solution to the Problems related to Stocks-
Avoid Stock-Outs and Increase Sales-
Understand the Inventory-Inventory includes anything starting from raw material to
finished products, from components required to manufacture an item to packing items. An
extraordinary inventory management system estimates all the materials and components that
are required to make products sales ready.
Automate the Process-
Automated inventory predicts the requirements and stimulate automatic re-orders
stock drops below a certain pre decided value. Automated inventory is very helpful because it
makes an estimate of the delivery time and automatically triggers re-orders to make the
process smooth and less chaotic. (Young,2015).
Competitors Issue-
In order to solve the issue related to growth of competitors in the International
markets the most important step is to know the competition. Find out what the competitors
are offering and recognize their unique selling point (USP) (Berger,2018). Starbucks should
take appropriate steps to identify and solve the pain points of their customers. Starbucks has
to make efforts to make their product innovative so that they can understand the demand of
the consumers and fix the price of their product accordingly. Other important steps Starbucks
should follow is to improve their customer service pattern, update their image in the market
and differentiate their products from their competitors and by building strong marketing
strategies.

5DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Aggressive Growth Issues-
Starbucks expanded randomly without analysing the demand of the Australian coffee
market (Noe et al.,2017). They relied on their brand value and this resulted as major drawback
for the organization. Due to this expansion Starbucks faced a huge loss in terms of revenue.
To solve this aggressive growth related issue Starbucks has to take steps to run a survey in
the market to understand their needs of their consumers and then according to the report of
the survey the expansion should take place slowly and steady. In this way they can overcome
the growth related issues and can even increase their sales structure in the international
markets especially in Australia.
Product Taste and Pricing Issue-
Starbucks failed to match the Australian consumer taste for coffee. In comparison to
United States and other international market which mostly dominate brewed coffee style.
(Campbell & Helleloid,2016). Australian have the reputation to be the consumers who have a
different flavour of espresso-based coffees. So, in order to solve the issues related to product
taste Starbucks needs improvement in their product quality and should bring a shift in their
coffee production to meet the flavour of Australian coffee market.
Advertisement Related Issue-
Starbucks relied on their brand image and their efforts regarding the product
promotion and advertisement of their product was not up to the mark(Dolovich & Natapoff,
2017). As a result Starbucks was not acknowledged by the Australian consumers. In order to
solve this issue Starbucks has to invest more in there promotion and advertisement of their
product so that more and more consumers become aware of their product and this will help
Starbucks to increase their sales in the Australian markets.

6DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Customer-Oriented Issue-
Australian consumer taste was different from Starbucks coffee culture. The menu that
was offered by Starbucks was not satisfactory for the Australian customers (Armstrong,2015).
The menu was considered overpricing for them and the taste also did not meet there
requirement. In order to solve this issue Starbucks should prepare a menu with a reasonable
price structure and should include products in their menu which would meet the consumer
requirement.
Rich Picture Diagram and CATWOE analysis that are provided in the following sections of
the report will give a clear view regarding the solution to the problems that are mentioned in
Part-1 of the report.
Rich Picture Diagram-

7DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
Figure 1
Description regarding the Rich Picture Diagram-
The rich picture diagram provided above gives a pictorial view of all the problems that
Starbuck is facing in the international market especially in Australia (Ross,2017). This rich
picture diagram will help the organization to go through the problems at a glance without
even spending time in analysing the whole report. The Rich Picture diagram also provides a
solution to all the problems that Starbucks faced in the Australian market (Berg,2015).
CATWOE Analysis-
Serial number CATWOE Description
1 C-Customers Targeted Customers are local
peoples of Australia. The
outcome of this analysis will
directly affect the customers.
The analysis will benefit the
customers.
2 A-Actors Starbucks organization plays
an active role. The actors are
basically local consumers.
The whole organization is
responsible for implementing
the system.
3. T-Transformation Process Transformation related to
product pricing and taste can
bring favourable outcome.
Innovative ideas can also
transform the organization
and can differentiate the
organization from the
competitors.

8DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
4 W-World View Transformation process will
increase Starbucks sales
worldwide and will also help
to capture the Australian
market.
5 O-Owner Owner or decision maker
decides whether to implement
the idea or not. Owners have
to take effective decisions
regarding product innovation
and marketing structure.
6 E-Environment Recycling of CUPs will be
environment friendly and will
also be economically
beneficial for the company.
Figure-2
CATWOE Analysis can be described as a method of problem solving that look at an
issue from six unique perspectives. The CATWOE Analysis provided in the above table gives
a in-depth approach of the solutions to the problems. Problems in business are often
considered to be complex and it can be difficult if we only look at one or two aspects at a
time (Silva, 2017). So, CATWOE analysis solves a wider range of the problems looking at all
major business aspects.
With the help of these tools which include Rich Picture and CATWOE Analysis the
problems are crystal clear and solution as well.
Conclusion
Therefore, after the analysis of both the reports (Part-1 and Part-2) the conclusion
comes out that Starbucks although being one of the leading global organization all over the
world still it has faced some issues regarding its expansion in the Australian market.
Starbucks faced a huge loss due to their quick expansion and random marketing strategy.
Their sales detoriated and they suffered from huge financial losses. This report provided a

9DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
detailed analysis of the problem with the help of tools such as Rich Picture and CATWOE
analysis which would help Starbucks resolve their issues.
Recommendation
The recommendation of the report focuses on solving the problems related to stock
and threat of competitors. Stocks are considered to be a major problem of any organization.
Thus it can be recommended that this issue can be solved by understanding the market
properly and also by performing surveys to understand the needs of customers. Another
approach by which stock related issues can be rectified is by first picking up orders from the
customers, understand how much stock is required and then buy stocks as a whole in a
discounted rate.
Other problems regarding threats from competitors can be resolved by including innovative
products which could differentiate them from their competitors.

10DETAILED ANALYSIS OF THE PROBLEMS FACED BY STARBUCKS
References
Armstrong, G., Kotler, P., Buchwitz, L. A., Trifts, V., & Gaudet, D. (2015). Marketing: an introduction.
Berg, T. (2015). Rich picture: The role of the facilitator. Systemic Practice and Action Research, 28(1),
67-77.
Berger, A. A. (2018). The Starbucks Coffee Shop Logo. In Perspectives on Everyday Life (pp. 87-90).
Palgrave Pivot, Cham.
Campbell, K., & Helleloid, D. (2016). Starbucks: Social responsibility and tax avoidance. Journal of
Accounting Education, 37, 38-60.
Dolovich, S., & Natapoff, A. (Eds.). (2017). The New Criminal Justice Thinking. NYU Press.
Jane, S. (2017). Business Analysis: The Question and Answer Book. ANISAN Technologies Inc..
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management:
Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Ross, R. (2017). Picture book [Book Review]. Metaphor, (2), 49.
Silva, J. P. (2017). The syntactic signature of starbucks' locations Towards a machine-learning
approach to location decision-making.
Young, R. C. (2015). BOOKS:‘Thinking Fast and Slow,’by Daniel Kahneman. Oncology
Times, 37(22), 36-37.

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