Starbucks’ International Operations Case Study - 1636 Words

1. Analyze entry strategies adopted by Starbucks. Starbucks adopted three different entry strategies: licencing, joint ventures and wholly owned subsidiaries. Looking at the list of the countries in which the company is present and modes of entry to each of them, we can notice that a company hardly ever decides to open their own subsidiary. It is understandable, as this mode of entry is connected with highest risk and costs. Starbucks was able to use this strategy in Canada because of some similarities to the American market. Taking into account small geographical distance between the countries, similar history and culture as well as customers’ values and lifestyles, and the same language, Starbucks could have decided that the risk is†¦show more content†¦It seems that it wanted to adopt the same strategy internationally and open as many stores as possible. However, i think they didn’t exactly realize how different foreign markets were. There are huge differences between countries in Europe or Asia, so they ca n’t be treated as one identical market. The customers have different coffee drinking habits and are used to local places offering coffee. Starbucks expected they will be able to attract more customers and that people easily shift from traditional to a new product. It overestimated demand for their coffee and underestimated competition. I think they didn’t analyze and manage this kind of risk. Perhaps they wanted to grow too fast and open too many stores while they didn’t know exactly what the future demand would be (sometimes customers are attracted to a new product only at the beginning, then they come back to the old one, they know). They also didn’t consider and prepare they licensing and joint ventures agreements very carefully, as they dicovered later how disadvantageous for the company they were. But in my opinion it is too early to say that Starbucks strategy failed. It entered the first foreign market in 1998, then next countries in 2000-2002. The case we analyze was written in 2003, which is only a couple of years after its internationalization. It is natural that at the beginning every company faces more risks than when it is well established in a country. And the best way toShow MoreRelatedInternationalisation of Starbucks1051 Words   |  5 Pagescoffee shops in Seattle as the director of retail and operations (Starbucks). Since then, Schultz s vision has transformed Starbucks into a transnational giant on a scale similar to the international growth experienced by McDonalds. By the end of 2006 the firm had a total 12,400 stores across 37 different countries (Starbucks 2006). In this essay I will explore the academic literature on international business and apply it to the case of Starbucks. 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