First a couple of notes, posted online on the website is a blog record sheet for you to complete before you return to school in August. You simply need to download and fill out the form. You can find it at www.lincoln.edu.ar/stephens/.
Also...remember that you must blog at least once a week to meet the minimum summer assignment requirements, minimum will get you a B, not an A! Going above and beyond gets you an A. Also remember if you are on vacation etc. you can catch up with other blog posts when you return. Now....on to the economics.I generally try to find blog articles in English, but occasionally I might find something about Argentina in the Spanish language news. This article being a great example of this. Be sure to follow this link thttp://ar.news.yahoo.com/s/19052007/44/n-business-cadena-norteamericana-starbucks-desembarca-pa-xed-s.html the article is about Starbucks planning on opening up a franchise here in Buenos Aires in 2008.
What do you thinking about Starbucks coming here? Try to go beyond the yeah its good, I like Starbucks or it's bad because Starbucks and companies like it are taking over the world, blah, blah, blah. Think more in terms of why you think they might be coming here (they will only come if they think they have a chance of doing well and making money) Do you think they will do well in Buenos Aires? If so why, if not why not? Try to think about why Starbucks might think it is a good idea to be in Buenos Aires and what might be some good reasons they might be wrong?
As for blogging this is all you are getting from me until about June 24th, I should be pretty much out of internet contact for the next week or so.
Have a great first week of vacation!
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13 comments:
Well i personally think that having Starbucks here will be a great idea because Argentines love drinking coffee and people normally love trying new stuff. However, Starbucks is pricy, so they will have to be well positioned in locations for those who can afford.
P/S - Can't wait to have their iced-blended choc with whipped cream. *Drools* =P
Happy holidays everyone!
Well, it seems to be a good decision to me because from what I can see there is a large number of wealthy Argentines who don't care about the high prices that come with foreign goods and seem to be spending their money a little more freely then they were even 2 years ago when I arrived. So I suppose it seems almost natural for a company like Starbucks to try opening a franchise in the area. I also believe that there is a good chance we will be seeing more franchises from other companies opening up as time goes on.
P.S. It would be nice to see more Argentine money going to the US. ^,^
Ok, Starbucks will probably have a hard time to compete with cafe's throughout Buenos Aires. Yes, some have commented that Starbucks is pricy, but prices will not be the same you see in the United States, they will adapt to Argentina's economy.
In the past some franchises have existed in Argentina and left for several reasons.. For example, did you know there was a KFC once in Argentina? But, due to low sales, they closed their one store.
Also, we used to have pizza hut as well as wendy´s. But I saw them disappear some years ago.
Starbucks will make money if they study the Argentine people and the city in Buenos Aires. It would'nt be strange if they first opened their stores downtown, close to subway stations were people then walk to work. Starbucks cofeee would be a great "to go" replacement for breakfast. Let's hope this does'nt hurt the small businessman who till now have not really had such a big competition.
I must say, I have to disagree with both Jamie and Michael. Like we discussed in class, I don't think Starbucks will be very successful in BA because it doesn't trigger the majority (only the upper class), nor is it part of the Argentine culture. In Argentina, little cafes are always full of people drinking a small coffee, eating a medialuna, etc. It seems as if in the US' mentality is "Big". All the coffees are huge unlike the coffees in Argentina. Also, who would chose to go to Starbucks and pay 20 pesos for a coffee when you can get one for 3 pesos down the street? I also think Starbucks will follow in the footsteps of Subway here. It is hidden on some street in Capital Federal and no one goes to it. If Starbucks wants a chance, they must trigger the needs of Argentines and create a more local menu, as well as smaller portions. And once it does this, what is the point of coming to BA if it is just like every other cafe, just double, better yet, triple the price? I think it will be very difficult for Starbucks to be successful in BA.
bringing starbucks to argentina is a great idea as this franchise continues to grow...but i think in this case starbucks will have a tough time having as much success as it has in other countries. The reason for this is , not only price, but also preference. Although like mike said there are welthy argentines that woould but there, many people are already used to going to cafe martinez or coffee store where not only is there excelent coffee but they also offer tostados or other things to eat. Im not saying its going to be a "fracaso" but i think it will take a longer time than usual in becoming what starbucks is in the states.
First of all, I think that Starbucks is coming to Argentina because they have established markets all over the world such as in Europe, the States, and even Korea (Koreans LOVE Starbucks + Pascucci coffee). They are even established in Chile and are doing well. Therefore I think that they see Argentina as a good target for expanding their market size and gaining more consumers, since Argentina is pretty well known for its love for coffee. Also because they are soooo well known all around the world, they probably think that branding will help them gain customers (in Korea people try Starbucks just because it's "Starbucks").
Personally, I don't think Starbucks will be very successful in Argentina. As the article states it will have to compete against already established stores here such as The Coffee Store, Cafe Martinez, Havana, Bonafide etc. which are already very well liked and EVERYWHERE. These coffee stores have an advantage over Starbucks because they probably already have their regular customers, etc. Also unless Starbucks decides to lower its general price drastically it will be more expensive than the coffee stores in Argentina, and most Argentines aren't very wealthy. The customers Starbucks will most likely attract will be the rich minority. Creating the "dulce de leche frapucchino" is an innovative idea and probably it will gain many customers for it at first because of people's curiosity but depending on the price and everything I don't know if they will be able to gain an acknowledgeable profit. Also if Starbucks wants to succeed I think that they should locate themselves in an area where they are most likely to gain customers such as in centro where all the big hotels are located, where those tourists and foreigners will be glad to find a familiar brand and can afford the product.
But I wish Starbucks good luck..and it sucks that they are coming after I leave the country!! :(
While I am a great consumer of Starbucks myself (being in Berlin I go as much as possible), I have slightly mixed feelings about Starbucks comign to Argentina. I do believe that if they have a good location and are able to make their brand name well known and popular amongst the people, then they might be very successful. Argentina, especially Buenos Aires, is a place well known for their love of coffee, and with ideas such as frapucchino de dulce de leche, which combines a well-loved familiar product with the new product the company is trying to sell, they might be able to attract quite a few customers. It must also be considered that starbucks is incredibly successful in many countries, including Germany, and especially Berlin, where in the last year about 3 more cafes have opened in the city. I'm sure Starbucks would have made sufficient research to make sure that taking the risk of opening in Argentina is actually worth it.
Howeevr, just because Starbucks has managed to become succesful in many other countries doesn't necessarily mean that it will be the same in Argentina. Argentina already has a very developed coffee culture, including cafes such as The Coffee Store and Cafe Martinez, which are very popular and will probably still remain dominant among consumers. I think that Starbucks, like Subway in Argentina, will become a strictly tourist visited area since no average Argentine will be able or willing to pay for a ridiculously overpriced calorie bomb when they can get soemthing similar at a much cheaper price. Tourists will obviously respond positivily to the Starbucks since it will be recignized as something familiar, and they will be willing to spend the money on it.
What I would hate to see is that Starbucks would threaten the local coffee culture of Buenos Aires,and that it would harm all the little cafes that are so unique in the city. However, I believe that the customers will remain more loyal to their own local businesses than to an overpriced foreign coffee franchise. Taking this into consideration, I believe that even though Starbucks has a good chance of surviving in Argentina, it will quickly develop into a tourist destination instead of a local hang out, as it is in other countries.
Sorry for my lack of blogging! I think its great how intense the debate is in the IB econ. class. Luisa pretty much summed up everything I was thinking, but I will ask a few questions and throw out some different thoughts.
Firstly, how is Starbucks going to use demographics to open new stores? They can probably opt for a variety of marketing methods- i.e. open multiple locations around the city in one big grand opening campaign, or open a few select cafes in wealthy, tourist areas (thereby testing the Argentine response). Also, would the prices slightly differ depending on the location? For example, prices seem to be higher in New York than in DC this summer.
I am curious as to what the government's opinion is. While the FDI will help Argentina in many ways, i.e. help the capital account, it could harm local competition. Obviously, Starbucks' success is in the hands of the Argentine public...individuals must choose whether they want a Dulce de leche Frappachino or their normal cafe con leche from around the corner.
I think Starbuck will be successful because Argentina has changed even in the 4 years, since I moved there---curiously, about 6 years ago, Dunkin Donuts and (Papa Johns?) pizza weren't successful. As the economy is expanding and thriving, Argentines (at least portenos) have increased consumption and developed a thirst for foreign products. Starbucks will probably appeal to this thirst.
I agree with luisa when she says that Starbucks "will quickly develop into a tourist destination instead of a local hang out, as it is in other countries". And as to the "What I would hate to see is that Starbucks would threaten the local coffee culture of Buenos Aires,and that it would harm all the little cafes that are so unique in the city" i hiiiiiiiiiiighly doubt it will happen. Because if you think about it, in a way Starbucks will be attracting very different kinds of consumers than the ones who go to the small local coffee shops regularly..i mean even looking at it personally, me and luisa for sure won't ditch our Cafe Martinez coffees and our dulce de leche cakes across the street for Starbucks frappucchinos..;) If Starbucks appeared in Argentina right now it wouldn't be a regular hangout place, first of all because of its high price.
You can't exactly compare the success Burger King and Mcdonald's have in Argentina to this because first of all they target the average consumer because they are fast food stores. Also their prices are not higher than a lot of other fast food stores in Argentina. It's reasonably affordable. I guess Starbucks could be compared more in a way with Kansas. It's doing well, but its regular customer is not really the average Argentine: it's targetted more to affluent families. I mean the food is excellent and everyone in my family loves it, but we only go there for special occassions like birthdays or anniversaries. Usually when we eat dinner or lunch outside we go to the restaurant we always go to in Cabildo, a few blocks away from our house. Kansas is doing very well but its Hawaiian steaks are certainly not jeopardizing the local Argentine restaurants with asados and such, soo loved by Argentines :)
Yeah, Luisa pretty much said what I had written before (but somehow it didn't get posted, so here I am, writing it again 2 weeks later). Sorry about that.
Anyways, unlike most of the IB Econ students have been saying, I don't think Starbucks will be very successful in BA. Yes, when it first opens, it may be the "place to be" but just like Subway, after a few months, no one will even know it exists. So here's what I think...
First of all, like I said, it may be the "place to be" for the first few months after it opens. But who can afford a 20 peso coffee every day? (Especially when you can buy one for 3 pesos across the street?)The dulce de leche frap is a great idea, and I think it wil be a hit at the beginning, but likewise, the price will eventually turn people away. To fit in downtown, Starbucks has to deliver, if not, the small family-owned cafe's will out beat them!
If Starbucks wants to be successful in downtown BA, it must trigger to the city people, and the culture of Argentines. Starbucks must create SMALL coffees and an atmosphere for relaxation to sit and talk, not an industrial fast-speed cafe like it is in the U.S.
I think that although most students in our school think it is a great idea because they love going to Starbucks when they're in the U.S., to the rest of the population, it's just an overpriced, over-industrialized cafe. My dad told me that many of the people he works with have never heard of Starbucks before, so why would they chose to go there instead of the same cafe they've been going to for the past 10 years?
Starbucks will have to really adjust to the Argentine way of live and create something special to attract the common city person, not just the rich tourists.
Like Tyler said, I wander what the government things, and Argentine economists as well?
Another addition after catching up on the IB Econ students' blog. Many times people have used McDonald's as an example for American chains that have been a hit, but most people seem to forget that poor Americans can even afford McDonald's, but NOT a Starbucks coffee. You can get a full meal at McD's for under $5.00, but you can barely buy a coffee for $5.00. let alone any food to go along with that. McD's uses a small portion of a person's money whereas Starbucks is a luxury. That's the dividing line whether Starbucks will really be a hit, or not (as well as location too, because McD's is in the suburbs unlike Subway).
I just thought that might bring up a new discussion.
Ok in my opinion there are several ups and downs to starbucks expansion in Argentina. From what I know of Argentina/BA (which is little since I have only been here for six months) I feel as others have stated that it will be competing with a city which already has many cafes. Coming from Colombia; the cofee capital of the world, I feel Argentine Coffee is really mediocre and does not compare... at least in the cafes ive been to. So I guess being a foreign comapany with a huge variety of cofee grains Starbucks will definetly bring a new quality of cofee to Buenos Aires, maybe if people apreciate this it will be popular. As for the cold cofees and Ice blends it will have great sales (I mean who doesnt love them!?) but only durring the hot months of the year.
So I guess Starbucks will have a good chance in Buenos Aires if they bring something diffrent from the already established networks of cafes and focus on quality, they shouldnt plan to take over the market, they must think in a couple stores which are really well placed, since as Emilie said Cofee is a luxury and their best target would then be the middle/upper class.
Peace Everyone
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