Has Starbucks Met its Match?

 

 

The popular coffee franchise has made a statement in a number of different markets, but has it met its match against Vietnam? The Seattle based coffee chain put its first location in Ho Chi Minh City in February. This country is known to have a very specific way of making coffee; nothing like what Starbucks has in the U.S.

The main concern here is if Starbucks will thrive in this new country, or become a complete failure. I believe The Critical Decisions of Operations Management should be highly considered.  One of the points is based on the design of goods and services. Starbucks has made a point to please the locals by making a special drink called the Asian Dolce Latte to appeal to local palates. By doing this Starbucks has a better chance to win over the locals that are so keen to stick to their original tastes.  When taking a domestic product abroad, I believe having differentiation in the good or service is also extremely important. Since Starbucks has a flavor of coffee unlike anything the Vietnamese are used to, this differentiation can potentially give them the competitive advantage they need in order to succeed. Starbucks CEO Howard Shultz quotes, “The environment that we create, the store design, the experience…they all add up to a much different position to anything that anyone in Vietnam currently occupies.”

Another critical decision is location strategy. Now, Shultz did not just wake up one morning and decide he wanted a new location in Vietnam. There are currently over 3,000 locations in Asia alone. Starbucks in fact purchases a large quantity of Arabica coffee from Vietnam, thus building a location in Vietnam makes a lot of sense. If they can move closer to the supply, this could greatly reduce exporting costs. To be even more specific, Starbucks purposely located their café in the capital’s higher-end neighborhood, District 1. Here, those that live in the area can afford the expensive taste that Starbucks has. Starbucks essentially nailed it on the head when it comes to this aspect: they are now near raw materials, and they are near to their target customers.

Going global has given Starbucks a vast amount of knowledge on how to succeed. However, they also face some cultural issues as well. As I stated before, the type of coffee served at Starbucks in the U.S. is much different than what the Vietnamese are used to. They enjoy a more bitter and higher caffeinated drink, and in order for Starbucks to do well, they must adjust to the new scene and roll with it. They have also brought a roast-duck wrap and a French baguette to the menu to achieve this goal.

Overall, I believe Starbucks has done an amazing job going global, and if they review and understand the critical decisions of operations management, they will continue to strive to new levels.

Thoughts for discussion:

Will Starbucks succeed in their takeover of Vietnam? Why or why not?
What does this mean for local coffee shops?

Sources:

http://online.wsj.com/article/SB10001424127887323582904578487192544295444.html 

http://travel.cnn.com/can-starbucks-make-it-coffee-mad-vietnam-921956

 

Will the Curse of the Billy Goat be Broken?

“THE CUBS AIN’T GUNNA WIN NO MORE!”

This statement has actually held true for the last 67 years. The Curse of the Billy Goat was supposedly placed on the Chicago Cubs in 1945 when the owner of Billy Goat Tavern was asked to leave the stadium because his pet goat stunk. To this day, it has been 105 long, sad years since our very own Chicago Cubs have won a World Series.

 

 

Can the curse be broken? It was announced Monday that the Cubs have come to an agreement with the city for a $500 million privately financed renovation of the historic Wrigley Field. They plan to use this money to redesign the locker rooms, revamp the food services, and build a new hotel and office building. They also said this renovation would bring jobs to the city and a better experience for the fans. Team Chairman Tom Ricketts even went further to say, “If this plan is approved, we will win the World Series.” As owner of this organization, Ricketts must make a change in order to keep the team alive.  They cannot continue with their same routines and expect to become a better team.

 The picture to the left shows owner of Billy Goat Tavern William “Billy” Sianis and his pet goat being denied into the game

 

The question that remains is do we want this renovation to take place or not? Is upper management making a cost effective and efficient decision? Or does this project contain too much risk that it could ruin the organization completely? I believe this could be a cost effective decision if the team starts winning some games. If the players are somehow motivated by a new stadium and can play more cohesively as a team, more people will attend the games, revenues will boost, and therefore this project would be worth it. This project can also contain a great amount of risk. If the team does not do well, many fans would be upset that the historical Wrigley Field was renovated for nothing.

As a Wrigleyville resident, I believe that the renovations would be somewhat of a nuisance. All of that construction going on right in my backyard is something I would not like to deal with. Management would have to find a way to keep the residence of Wrigleyville happy. On the other hand, if what they say is true and these renovations will bring jobs to the city and therefore boost the economy, I would not be opposed to that.

 

 

Another aspect to consider is the view of Tom Ricketts. As owner, he has a duty to create a successful team. What have the managers and owners done so wrong that this team has not been able to win for so long? Is there even any fault to be put on the managers and owners? I believe at least some of the fault can be put on the managers, but the players as well. It is their job as professional baseball players to win games.

 The picture to the right shows possible renovation ideas

 

The bottom line is that the Cubs need to win a World Series. How are they going to do this? What steps must management take in order for this project to work? Will renovating the field finally kill the Curse of the Billy Goat? Or will the curse live on…

SOURCES:

http://online.wsj.com/article/SB10001424127887324485004578425101880334958.html?mod=WSJ_business_whatsNews

Citation:
Barrett, Joe. “Cubs Owner: Wrigley Plan ‘Will Win the World Series’.” Wall Street Journal. Dow Jones & Company, Inc, 15 Apr 2013. Web. 17 Apr 2013.

http://www.billygoattavern.com/legend/curse/