International Strategy of Starbucks. At present, the company uses three different strategies of entry mode: Licensing, whollyowned subsidiaries and Joint venture.

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Since the beginning, Starbucks strategy is the core of its growths and successful. They have demonstrated all dimensions of a growth strategy: Internationalization in expanding into new countries and the global market. It has shown concentration in being creative and relying on its core competency of making high quality coffee and coffee equipment to develop new products and markets. Horizontal Integration has been used in many strategic acquisitions, partnerships, and joint ventures. Vertical Integration has been another key success factor as Starbucks Corporation has integrated backwards in opening coffee roasting plants, and forwards in controlling the distribution of its many products. This growth had taken it from a single store in Pikes Place Market in Seattle to a worldwide company with sales of over $2.1 Billion and operations in almost thirty countries, in just 21 short years.

Starbuck’s International Strategy

As Starbucks moves into new markets all over the world, it continues to build its brand through the delivery of the Starbucks Experience. “Our success at every market that we have entered into reiterates our commitment to become a great, enduring company with the most recognized and respected brand in the world, known for inspiring and nurturing the human spirit. Our mission: to be a global company, making a difference in peoples’ lives by leveraging our brand and the coffee experience to foster human connections.”(www.starbucks.com) Starbucks; development strategy adapts to different markets addressing local needs and requirements.

The key success of Starbuck’s international strategy comes from their international entry mode strategy. Entry modes strategy is the way to create possibility by positioning company’s products, technology, human skills or other resources to enter into the foreign country, also helps company to determine goals, resource and policy in order to direct their international activities toward a sustainable international expansion.

At present, the company uses three different strategies of entry mode: Licensing, wholly–owned subsidiaries and Joint venture.

  • Licensing – It involves with a licensee and licensor tied together by a certain agreement which gives the benefit to both sides. Licensor will give the right to licensee to apply their know-how in a certain period of time. It mainly referred to patents, formulas, process, copyrights and trademarks. The licensees have to pay the fee in order to achieve the agreement or permission with the licensor.  It also is the primary stage of the firm who plans to enter the foreign market. Licensing has been using in China (Beijing), Indonesia, Malaysia, New Zealand, Philippines, Singapore and in Middle East.
  • Wholly-owned subsidiaries – This entry mode means the firm owns 100 percent of the entity. There are two ways of acquiring wholly-owned subsidiaries in foreign country. First, Greenfield venture, it defines as the firm will enter the new international market by establishing entirely new operation and legal entity. Second method is acquisition; the firm acquires another firm that operates in the international market in order to directly enter.  Thus, the firm could gain a lot of advantages and promote its own products by the acquisition strategy. This type of entry mode has been used in United Kingdom.
  • Joint Venture – it is very typical entry mode used world-wide, also Starbucks. It means two or more individual and independent firms reach the agreement to be an alliance in order to achieve the better position in the market. The joint venture’s operation is separate from both companies, and often the same role is shared by both managerial teams. It could be possible that one firm invests more in order to gain the larger percentage of shares and hold tighter control of the joint venture’s operations. This method has been using in many market such as Austria, Germany, Greece, Hongkong, Israel, Japan, Mexico, South Korea, Switzerland, Taiwan, France and Spain.
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International strategy –> Approaching Spanish Market

Joint venture is the strategy of Starbucks to enter Spanish market. In order to adapt to different markets, satisfy needs and requirements, but still respect the old cultures and traditions.

The international expansion, Starbucks strategy is to focus on the partnership. The local company has a connection to get everything work, who can also share values, culture, and goals about community development. Starbucks looked for the partner that has following characteristics

  1. similar business philosophy in terms of sharing values, corporate citizenship, and commitment to be in the business for the long ...

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