Question

What are 2 ways that Starbucks can deal with the loss of the market share and 2 ways that they can deal with the inability to expand?

Answer 1

The number of ways that Starbucks can deal with the loss of the market share is -

• Changing the promotional strategy
• Changing the price of goods/services
• Alteration of the goods/services

1. Changing the price of goods and services - By lowering prices, Starbucks can hope to attract customers away from competitors. The advantage is higher market share but: lower margins per unit. This strategy is suitable for large companies like Starbucks that have large "economies of scale" that permit them to operate at either a low marginal cost than competitors or to operate at a loss if required. It is uncertain because, once prices fall, it can be hard to raise them, unless the company regains enough market share to put out its competitors.
2. Changing the promotional strategy - Another way to regain market share is to alteration in the techniques of promotion, which can involve raising the advertising budget and influencing customers through rebranding for the firm. It depends on how good company leaders identify the specific issues that need to be taken forward, changing promotional strategies can be successful or a costly exercise.

The number of ways that Starbucks can deal with the inability to expand is -

• Adding a new product/service to product mix
• Exploring new method of sales and delivery channels
• Acquiring another business
• Targeting new customers market

1. Exploring new method of sales and delivery channels - The best example is of the internet today of how sales and delivery channel can transform business through e-commerce. Many companies have renovated themselves to take gain of e-commerce opportunities — from brick-and-mortar restaurants opening online stores to service providers who are able to reach a much broader audience by delivering goods and services to homes of customers. This platform offers customization, convenience and follows up of customers.
2. Acquiring another business - This might be the quickest way to growth and expansion. Merging with or acquiring another business can incease the size of a particular business and growth of sales and revenue exponentially. But it must be performed carefully on any potential acquisition company/business. Since Starbucks is a well-known business among beverages companies, it could engage in such a way to expand its business.