Final answer:
Starbucks can improve profitability in Japan by tailoring products to local tastes and demographics, utilizing comparative advantages such as speciality in lattes or integrating Japanese tea culture, and potentially contributing to Japan's export-led economy through unique product offerings.
Step-by-step explanation:
To improve profitability at Starbucks in Japan, the company could employ several strategies considering Japan's high cost of living, consumer preferences, and the importance of trade surpluses. Given the veneration of the elderly and changing young consumer habits towards convenience, Starbucks could introduce products that cater specifically to these demographics while maintaining a focus on quality and convenience.
Japan relies heavily on imports for food and oil, and with products like beef being expensive, focusing on local staples such as fish could help reduce costs. Incorporating local flavors and preferences into the menu could attract more customers. Also, since fruit can be expensive, limited-time offers or seasonal items utilizing local produce might create buzz and increase sales.
The concept of comparative advantage can be applied to Starbucks Japan’s operations. Specializing in products or services where they hold an advantage over competitors can optimize efficiency and appeal. For example, if Starbucks has a superior latte offering, emphasizing this in marketing and product development could draw in more customers. Integrating Japanese tea culture could also differentiate Starbucks from other coffee chains.
Trade surpluses can be beneficial for a company operating in Japan. By focusing on exporting Japanese-styled Starbucks products to other countries, it can contribute to the trade surplus while also establishing an international presence for unique offerings from Starbucks Japan.