Market Entry Strategy: Starbucks' Expansion into the Moroccan Market

This report provides a comprehensive market analysis of Starbucks' potential entry into the Moroccan market, focusing on the launch of its new ice cream product. The analysis begins with an introduction to Starbucks' global presence and its history of innovation, emphasizing its unique approach t...Read More

Running head: MARKETING
Marketing

MARKETING 2
Contents
Introduction......................................................................................................................................2
Analysis...........................................................................................................................................2
Market Research..............................................................................................................................3
Value chain analysis........................................................................................................................3
Key factor that impacts on the promotion of the New Product.......................................................5
Unique positioning...........................................................................................................................6
Financial Resources.........................................................................................................................7
Market Entrance strategy.................................................................................................................7
Potential Risks.................................................................................................................................8
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
In the year 1971 the two teachers of Seattle’s Pike place Market had opened the first retail shop
called Starbucks. The company used to sell the ground coffee, bean, spices and tea. The
company now has around 20,000 of stores around the World that is from Columbia to Monaco
and many others. The company has been famous for its innovation and that is the reason of the
constant growth of the company. Starbucks is a unique for its ethical sourcing initiatives, health
benefits to the employee stock options. The company evolution is continuous in all over the
World. The company had a global marketing phenomenon and reinvents their operations that
suits their ambitions of growth but remains always honest for serving the coffee in the
atmosphere which is friendly (Glowik, 2017). In the coffee house industry the company is the
first who had pioneer in many regions around the World. The company by virtue had introduced
the concept of coffee mainly in the Asia Specific countries. The company has also reinventing
itself in the countries where the culture of coffee house is very sophisticated like European
countries. It becomes compulsion for the company to analyze their strategy before entering into
any new market. In this report the market strategy of Starbucks will be discussed that how it will
enter into a new market in the country of Morocco and what will be their strategy before entering
into Morocco. In this report market analysis will be done entering into a new market of Morocco
and the Starbucks newly launched ice cream that how it will work in the market (Taecharungroj,
2017).
Analysis
Starbucks focuses on the market analysis before entering into any country. The strategy that has
been followed by the company is differentiation strategy. The differentiated products strategy
had been used by the company within the target consumer market (Alwaleed, Huwail, Singh, and
AlMejhem, 2019).
The company for the expansion its operations in the international market they are offering a
premium quality coffee experience to the international customers and with aesthetically designed
ambiance. The company is assured and there is the uniformity in their marketing strategy as they
only use the third party mediums for their marketing strategy (Sholihah, Ali, Ahmed, and
Prabandari, 2016).

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Market Research
Starbuck had earned the reputation by possessing the excellent network of distribution that is
between the specialty of the coffee industry which is very different from its growth strategy
(Harrington, Ottenbacher, and Fauser, 2017). The company has the strategy before entering into
any market firstly the company do the in depth research of the market. It helps the company in
penetrate easily and in an effective manner. The company also by this process gets the attention
in the targeted market (Lakshminarayanan, Maggio, and Best, 2017).
Value chain analysis
Inbound Logistic Starbucks inbound logistics had been refer to those coffee buyers who
are appointed by the company to select the best quality of the coffee
beans from the producers in the Asia, Africa and Latin America. In
Starbuck case the unroasted or green are directly procured from the
farms of the Starbuck buyers (Samper, Giovannucci, and Marques
Vieira, 2017).
Outbound Logistic There are very few or having no presence of the intermediaries in the
selling of the product. The products are majorly sold either by their
own or by the licensed stores only. By having a new venture or the
company sold through some of the retailers who has the lead in the
market (Ramaswamy, and Ozcan, 2016).
Operations: In almost 75 markets Starbucks operates, either the company itself
owned stores or by through franchising the stores. The company has
24,000 stores all around the World. The company includes Starbucks
Coffee, Seattle’s Best Coffee, Evolution Fresh and Teavana retail
locations. The company earns revenue around 79% from the stores
operated by the company (Ramaswamy, and Ozcan, 2016).
Services The aim of the Starbucks to build loyal customers through the stores by

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providing service to the customers. The company in itrs annual report
stated that it will be the leading retailer by targeting the market and
selling the best quality products, also provide the unique Starbuck
experience (Ramaswamy, and Ozcan, 2016).
Firm Infrastructure The firm infrastructure includes the departments like finance, legal and
management, etc. that are all are required so that the company stores
operation should take place. The Starbucks having pleasing stores and
well-designed that are complemented with the best service provided by
the company (Wu, 2017).
Human Resource
Management
The workforce plays a key role in the success of the company.
Starbucks has grown over the years due to its committed workforce.
Starbucks motivate their employees by generous incentives and other
benefits. Starbucks is known for caring of their people and it is the
main reason behind the low turnover of the workforce of the company
that indicates the company has the greatest Human Resource
Management. The company conducts various training programs that
sets a work culture that have created the staff efficient and motivated
(Wu, 2017).
Technological
Development
In the technology the company is well known for utilizing it. The
company not only use the technology for the process relating to coffee
but it also makes the connection with the customers. Many of the
people use the stores of the Starbuck for the place of meeting or as a
makeshift office due to the reason of free and unlimited
Wifi(Ramaswamy, and Ozcan, 2016).

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The reason behind the success of the Starbucks is always been people. The model set by the
company is all about the people in the Worldwide. The company used the best payment plans
and various other benefits packages for their farmers and for their local employees. The company
had the idea that if they will please their employees better than they will automatically pleases
their customers in a very good manner (Li, 2018).
Starbucks always put customer service on priority. The people attitude coupled with innovative
and good quality products had made the company successful in the market. The company has
offered and increased the number of products that they offer and it has been done to please the
loyal customers of the company (Voigt, Buliga, and Michl, 2017). The company manage
location in a very strategic and the activities drive by the company as frame the market
opportunity, analyze the scope in the market, value position been managed, unique source
system of the organization been managed, articulation the model of finance and integration been
managed (Atzori, Shapoval, and Murphy, 2018).
Key factor that impacts on the promotion of the New Product
There are various key factors that will impact on the promotion as they are:
Nature of Product: One of the newly launched products of Starbuck is Starbuck ice cream.
Therefore, advertising as well as publicity are more suitable for the consumer goods, especially
the convenience goods.
Nature of Market: It has been analyzed that in the market the company is launching that what is
the taste of the consumer in that market is the very important factor. If the company is launching
its product in the Morocco than the factors that are affect by the culture of the country. Also it
has been seen what the demographics of the country is.
Availability of funds: the marketing budget decides the promotion mix. Huge funds are
available for the promotion that helps in creating large level of promotion to the certain extent.
However, Starbucks will choose promotional tool wisely that will help in utilizing the resources
in more efficient manner.

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Readiness of Buyer and Sellers: The Company also saw the buying and selling power of the
suppliers and the buyers in the country. It will evaluate that whether the region will adopt the
new product or will continue with the old policies that all will be depends on these factors
(Sholihah, Ali, Ahmed, and Prabandari, 2016).
Unique positioning
The company is reinventing the coffee experience with a touch of ice cream. The company not
selling ice cream in a scoop or by other system that the other ice cream companies sells their ice
cream. The company is testing affogato that is an Italian style of dessert. In the shot of hot
espresso the scoop of ice cream is drowned to have a great experience of coffee and the ice
cream. Not only affogato the company will also offer the cold brew malts and brew floats. There
are some unique qualities and the varieties of the newly launched ice cream of Starbucks that
are:-
Classic Affogato: Reserve small-lot espresso two shots poured over the vanilla ice cream.
 House Affogato: Reserve small-lot espresso two shots with a touch of syrup called Demerara
which is poured over the vanilla ice cream which will be dusted with the ingredients of
cinnamon.
 Cold Brew Float: cold brew reserve small-lot with a normal scoop of vanilla ice cream.
 Cold Brew Malt: Reserve small-lot cold brew with an ultra-thick spindle-blended malted
milkshake , chocolate bitters and vanilla ice cream
There are some new affogato-inspired offerings at the locations of Starbucks:
 Classic Espresso Affogato: In the vanilla ice cream two shots of espresso had been poured over.
 Starbucks Cold Brew Float: Over the vanilla ice cream Cold brew poured over.
 Starbucks Cold Brew Malt: With the scoop of ice cream with the Cold brew been blended,
chocolate bitters and malt (Spencer, et.al., 2016).
The company product is very unique in terms of the ice cream as the company had given the ice
cream touch in the coffee which is the very unique concept and no any other company had

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invented this type of product. In the Moroco the market is very large and the people of the
country love to experiment a unique product (Dorn, Messner, and Wänke, 2016).
Financial Resources
The company received the heavy funding from its stockholders. After the year 1972 the company
went to the public for the creation of the new perception of the business value. The company has
over the year had made a solid place in the stock market that helps the company for the
expansion in the international market. The company to enter into the market of Morocco required
that finance from the public which the company can raise from the Stock Market. The company
internal fund is also very strong as in the past the company has expanded its presence in the in
international market by using their cash flows that states that company can also utilize their
funds for the entry in Morocco and for the launching of the new product.
The company newly innovate product Starbuck ice cream can be very effective for driving a
future growth and that helps the company to raise funds easily from the market. There are
various companies which fund the new and innovative products and for that the company can
raise huge funds from them for the entry and promoting the new product of the company in the
market of Morocco.
Market Entrance strategy
Technology and Globalization had become two main elements in the modern world and mostly
companies used this market strategy for entering into a new market. To expansion of the
company internationally is not only the success indicator but also it becomes necessary to
survive in the competitive World. Either the company in exports, ventures franchises, FDI or
taking over the other companies had become the strategies of every other company in the World.
The companies before entering into a new market it is required that all factors are carefully
evaluated regarding the decision of the expansion in the region. The company initiate in the
business in Morocco they adopt strategy by making a joint venture with local retailers of the
country (Snell, Lemley, Snell, and Yemen, 2017).
The company when enter into the country like Morocco it see what products are in demand, what
technology should been utilized and what are skills of human of that country and all other

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resources that are required by the company for the operation. The human and capital investment
of the company for the expansion in the new region is decided ultimately that what will be the
profitability in that region for the company (Harrington, Ottenbacher, and Fauser, 2017).
Potential Risks
The company due to its innovative products had made his name in the market but this innovative
thing sometimes becomes the risky for the company. The company raised funds from the market
which has not been tested in that region before and in the case of failure of the product in that
region that affects the company capital in a huge way (Taecharungroj, 2017). The company’s
pricing is very high although the company has able to maintain its customers and people get
ready for paying that amount. But in the recent times the company is facing a huge competition
from the other companies in pricing and quality. The companies like Costa and many new
emerging companies are providing quality products at reasonable rates. Therefore in the future
the company’s customer can move towards them and that will be the big crisis for the company.
The other potential risk for the company is manpower because the company will not get in every
country the same skilled labor and with that cost what they are paying in other countries. In
Some countries and especially in the country the retention rate of employees is very less that can
be riskier and costlier for the company in Morocco and that has been the big risk for the
company (Gupta, Nagpal, and Malik, 2018).
Conclusion
It can be concluded that Starbucks is the world’s biggest chain of coffee and the company has
been famous for innovative products. The company product is quality is the finest in the market.
The company before entering into any market firstly analyzes the market and then enters into
that market. The company first focuses whether the company can generate the profit in that
market and what is the condition of that market. It has been analyzed from the report that the
company conducts a market research before entering into any market that what is the position of
the market and what are the taste of the customers in that market. The company had launched a
new product is Starbucks ice cream and that will be analyzed that what factors can affect that
product in the market. The value chain of the company describes that what is inbound and
outbound and how operation takes place and it has been found that company had operated in a

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very good way. The company is famous for taking care of their employees and that is the reason
behind the success of the company. The company newly launched product has various
innovative products that make the company different from others. It has been found that product
has the unique positioning in the market. The company had made various strategies to enter in
the market of Morocco and to launch the newly launched product called Starbucks ice cream.
However there are various risks in the market of Morocco which the company has to take care
and enter that h been analyzed in this report.

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Marketing, 33(1), pp.93-106.

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