System Thinking Report: Starbucks Vietnam Challenges and Solutions

This report presents a comprehensive system thinking analysis of Starbucks in Vietnam. It begins with an executive summary outlining the challenges Starbucks faces in the Vietnamese market, primarily related to competition from local coffee shops and pricing issues. The report employs CATWOE analysis to examine the perspectives of key stakeholders, including customers, actors (employees, managers, suppliers), transformation processes, worldview, owners, and environmental constraints. A rich picture visually represents the problem and potential solutions. The analysis highlights the need for improved marketing strategies and cost-effective sourcing to better position Starbucks in the Vietnamese market. The recommendations focus on implementing digital marketing and managing suppliers to offer quality products at competitive prices. The report concludes that a thorough understanding of the Vietnamese market and strategic adjustments are crucial for Starbucks' success in the region. The report uses academic sources and provides in-text citations and a reference list in APA style.

Running head: SYSTEM THINKING
SYSTEM THINKING
Name of student
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Executive summary
The businesses in the present business world requires constant analysis of the production
process and then produce the goods according to the preferences of the customers in the
market. The situation at the Starbucks Vietnam has been that the company is considered as a
high quality brand all across the world. Due to this fact, it could provide the products to the
customers in the Vietnamese market at lower price. With the help of optimised and improved
marketing procedure, the awareness of the brand could be easily increased. This report
provides the CATWOE analysis of the present situation in the Starbucks organisation and
then an appropriate solution to the problem has been considered. A rich picture has been
provided to illustrate the changes being made in the organisation.

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Table of Contents
Introduction....................................................................................................................3
CATWOE analysis.........................................................................................................3
Rich picture....................................................................................................................6
Recommendations..........................................................................................................7
Conclusion......................................................................................................................7
References......................................................................................................................8

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Introduction
In the present business world, it is majorly required to produce the goods that suits the
taste of the consumer market where the organisation is functioning. In the situation of the
Starbucks Vietnam, this has led to a significant issue that is not allowing the proper growth of
the organisation. Also the price of the products of the Starbucks organisation is not suiting the
common people of the country. They prefer the locally produced coffee that is available in
significantly lower cost. For solving this issue of the business and gain significant profit from
the business, a CATWOE analysis is required for the organisation. A rich picture has been
provided to illustrate the main processes by which the changes are implemented. Lastly, an
appropriate conclusion is provided for the report.
CATWOE analysis
The CATWOE analysis could be described as the method that is used to understand
the perspectives of the stakeholders as well as the major impact of this view that would be
imparted on the main direction of business changes (Aithal, 2017). Among the primary
reasons for the management of the relationships with the stakeholders is the understanding of
the viewpoint prior implementing the recommendations or even implementing the business
changes. The uncovering of the direction that would be followed by the business and the
viewpoint of each of the stakeholders should be considered extensively. The CATWOE
analysis is among the several methods that is used by any business analyst for identifying the
main intention of the business, what are the problem areas and the what are the perspectives
of the people that are included in the decision making process (Wang, Liu & Mingers, 2015).
CATWOE primarily stands for the Customer, Actors, Transformation process, Worldview,
Owner and the Environment. Commonly the business stakeholders would have the proper
ideas regarding the direction of the organisation and the requirements that are required to be

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efficiently addressed, the improvement options as well as the solutions that are required to be
implemented. Moreover, the views mainly stems from the personal beliefs, the principles and
the values and it then forms the base for the extensively held ideas and from which any
deviation could be immensely challenging (Cadle, Paul & Turner, 2014).
If there is a failure in understanding the perspectives, it could lead to the serious
challenges in the later stages of the project because any disparities in the opinion of the
stakeholders could develop significant conflicts.
The CATWOE analysis of the Starbucks organisation could be executed as:
Customers: The main stakeholder beneficiaries of any output that is gained from the
system are categorised as the customers (Sinclair et al., 2014). In the situation of the
Starbucks Vietnam, it could be observed that the customers, employees, and the managers of
the organisation are the main customers of the system and they are mainly impacted from the
output of the system of the organisation. The present problems of the customers is the high
priced coffee products of the organisation that is not preferred by the customers. With the
implementation of the improved marketing solutions and cheaper product for the initial stage
of the organisation, the customers could prefer the product of this organisation.
Actors: The roles of the stakeholders that executes the task as well as the activities
within major transformation are the actors (Eva et al., 2014). In the organisation of the
Starbucks Vietnam, the actors includes employees, the managers and the suppliers. The role
of the suppliers is significantly important as it is ensured by them that the high quality
beverages are produced by the organisation and it matches with the taste of majority of the
Vietnamese customers. With the implementation of the cheap quality products and the
improved marketing department, the actors could be significantly impacted and they would
gain the improved services.

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Transformation process: The transformation process mainly involves the set of the
steps that are required to be provided for helping the starbucks create the appropriate products
as well as the price or the promotion that fits the market of Vietnam. The improvements in
the marketing process is required to be implemented for spreading the extensive awareness
among the common people and then improve the brand value in Vietnamese market. The
suppliers providing the cheap raw materials in the organisation would help in saving
significant capital. In the early stages of the establishment of the business in the country, it is
required to provide the customers the products at significantly lower price for gaining the
trust of the customers. In the long term, the prices could be increased but the quality of the
product is required to be maintained.
Worldview: The main underlying beliefs as well as the meaning that explains the
reason for the existence of the business (Setianto, Cameron & Gaughan, 2014). While
considering the business of the Starbucks organisation, it could be observed that the new
ingredients and the drinks could be easily used in the long term in the Vietnam market but it
is required to consider the price in the long term within the Vietnam market as it would
significantly impact the profit margin as well as the brand image across the whole world.
Owner: The main role of the stakeholders who could significantly instigate the
changes or even cause the main system of the organisation to exist. With the consideration of
the Starbucks organisation in Vietnam, it could be observed that the owners of the problems
relates to the managers of the Starbucks as well as the managers of the Starbucks Vietnam.
Environmental constraints: This aspect of the analysis mainly relates to the main
constraints that could be faced due to the external or the internal environment of the business.
The environmental constraints considers the conflicts among the resources of the organisation
as well as the external elements. The main constraints in this situation of the organisation are

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the being of Starbucks the international brand who possess a significant image all around the
world with the distinct drinks as well as the altering for fitting to any market may lead to the
degradation of the quality of the brand image.
Rich picture
Figure: Starbucks with the optimised marketing procedure
In this rich picture, it could be observed that the customer visits the Starbucks
Vietnam for buying products and obtained some product that is significantly costly than the
other coffee shops. It made the customer to shift from the Starbucks company to the local
coffee shop where the prices are significantly low. With the help of marketing solutions and
the cheaper products from the suppliers, the organisation could improve the business of the
organisation and spread more awareness regarding why the products of the Starbucks
company is the best at reasonable price. After the implementation of the digital marketing
strategy, the organisation was able to provide the customers with the best quality products at
lower costs.

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Recommendations
With the CATWOE analysis, it could be observed that the digital marketing strategy
could be implemented in the organisation that would help in marketing of the brand name of
the organisation. The suppliers could be properly handled for gaining the raw materials at
significantly lower costs for the organisation. It would help the organisation to provide the
best quality products to the customer at optimum costs.
Conclusion
It could be concluded from the above discussion that the establishment of the business
in the Vietnamese market is significantly difficult and it would require major analysis of the
present system of the organisation. The improvements in the marketing procedures would
help significantly with increasing the awareness among the Vietnamese market. The suppliers
could be managed efficiently for gaining the products at significantly lower price and
produce the goods at cheaper cost that the present production mechanism.

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References
Aithal, P. S. (2017). ABCD Analysis as Research Methodology in Company Case
Studies. International Journal of Management, Technology, and Social Sciences
(IJMTS), 2(2), 40-54.
Cadle, J., Paul, D., & Turner, P. (2014). Business analysis techniques. Chartered Institute for
IT.
Eva, M., Hindle, K., Paul, D., Rollaston, C., & Tudor, D. (2014). Business analysis. D. Paul,
D. Yeates, & J. Cadle (Eds.). BCS, The Chartered Institute for IT.
Setianto, N. A., Cameron, D., & Gaughan, J. B. (2014). Identifying archetypes of an
enhanced system dynamics causal loop diagram in pursuit of strategies to improve
smallholder beef farming in Java, Indonesia. Systems Research and Behavioral
Science, 31(5), 642-654.
Sinclair, E., Radford, K., Grant, M., & Terry, J. (2014). Developing stroke-specific
vocational rehabilitation: a soft systems analysis of current service
provision. Disability and rehabilitation, 36(5), 409-417.
Wang, W., Liu, W., & Mingers, J. (2015). A systemic method for organisational stakeholder
identification and analysis using Soft Systems Methodology (SSM). European
Journal of Operational Research, 246(2), 562-574.