For This Discussion: The Case Explores The International Exp

For This Discussion The Case Explores The International Expansion Of

For this discussion, the case explores the international expansion of Starbucks. The company has expanded over the last thirty years from a single store in Seattle to more than 20,000 locations spread across 64 different countries. As Starbucks has expanded, it has been forced to meet the challenges of operating in different cultures and political systems. Today, Starbucks is focused on continuing its global expansion, particularly in China. Discussion of the case can revolve around the following questions.

Discuss the following questions with your classmates on Blackboard. Before you begin, make sure to read the full closing case text from Chapter 13.

QUESTION 1: Starbucks prefers a combination approach to foreign market entry: the use of joint ventures and licensing. Do you agree with this approach? Why or why not?

QUESTION 2: Many would argue that Starbucks coffee is expensive, and yet customers get “value” for their money. How do you think Starbucks has been able to transfer this business model and value proposition to international markets? Post your answer by creating a new thread under this forum. Answer both questions, in a short answer format (no less than 75 words each).

Paper For Above instruction

Starbucks’ strategic approach to international expansion has predominantly involved a combination of joint ventures and licensing agreements. This dual approach allows Starbucks to leverage local expertise and existing networks while maintaining control over brand standards and quality. By engaging in joint ventures, Starbucks partners with local firms, fostering mutual investment, shared risks, and adaption to local tastes and legal requirements. Licensing offers a flexible and less resource-intensive pathway to expand rapidly into new markets, particularly where direct investment is less viable or politically sensitive (Harrington & Ottenbacher, 2017). This approach aligns with the company's need to balance global consistency with local responsiveness, a central tenet of international marketing strategy (Cavusgil et al., 2014). I agree with this approach because it mitigates risks associated with direct investment, accelerates market entry, and provides insights into local consumer behavior, which are crucial for success in diverse markets (Ghemawat, 2007). However, it requires rigorous management to ensure that local partners align with Starbucks’ brand values and standards, emphasizing the importance of strategic oversight and good governance.

Starbucks has succeeded in transferring its value proposition to international markets through careful adaptation of its business model to local contexts while maintaining its core brand identity. Despite the premium pricing of its coffee, consumers worldwide perceive value in Starbucks’ emphasis on high-quality coffee, inviting store atmospheres, and consistent product offerings. In international markets, Starbucks localizes some menu items to meet local tastes and preferences, creating a sense of familiarity while preserving its core product quality (Nayak & Kattel, 2018). Moreover, Starbucks invests heavily in creating a unique customer experience through store design, customer service, and digital engagement, which adds perceived value and justifies higher prices (Santos & Boote, 2020). The company also emphasizes corporate social responsibility initiatives, such as ethical sourcing of coffee, which enhances its reputation and customer loyalty across diverse markets (Hsu & Wang, 2017). Such strategic localization, combined with a strong global brand and consistent quality standards, enables Starbucks to deliver value and succeed commercially in international markets (Keller & Swaminathan, 2021).

References

• Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International Business. Pearson.
• Ghemawat, P. (2007). Redefining Global Strategy: Crossing Borders in a Networked World. Harvard Business Review Press.
• Harrington, R. J., & Ottenbacher, M. C. (2017). Innovation in Hospitality and Tourism: A Systematic Review and Research Agenda. Journal of Hospitality Marketing & Management, 26(7), 791-817.
• Hsu, S. H., & Wang, H. L. (2017). Corporate Social Responsibility and Customer Loyalty: Evidence from Starbucks' Ethical Sourcing. Journal of Business Ethics, 144(3), 451-464.
• Keller, K. L., & Swaminathan, V. (2021). Strategic Brand Management. Pearson.
• Nayak, R., & Kattel, R. (2018). Localization Strategies of Multinational Corporations: A Case Study of Starbucks in India. International Journal of Business and Management, 13(6), 45-58.
• Santos, T., & Boote, S. (2020). Creating Customer Value: The Starbucks Experience. Journal of Retailing and Consumer Services, 53, 101962.