1.Initially Starbucks expanded internationally by licensingits format to foreign operators. It soon becamedisenchanted with this strategy. Why?
Because this strategy did not give Starbucks the control needed to ensurethat the licensees closely followed Starbucks’ successful formula.Note: “Starbucks successful formula” refers to its basic strategy, which was: To sell the company’s own premium roasted coffee,along with freshly brewed espresso-style beverages,a variety of pastries, coffee accessories, teas, andother products, in a tastefully designed coffeehousesetting […] also providing superior customer service.
2.Why do you think Starbucks has now elected to expandinternationally primarily through local joint ventures towhom it licenses its format, as opposed to a purelicensing strategy?
I am sure it is one of the most important Starbucks’ strategies: to license itsformat to foreign operators and also establishing local joint ventures withthem. This fact (as I said before) gives Starbucks the control to be sure that
licensees are following its success formula; “licensed to the venture” meansthat both joint owners have the responsibility for growing the business(Starbucks) presence where it has established.For example: at the beginning Starbucks decided to enter to Japanby licensing its format to foreign operators, but later it become abad decision because Starbucks did not have the authority tocontrol this new business was still following Starbucks successfulformula. It is when Starbucks improved this situation adding to thelicense a joint venture, so both companies which participated as joint owners had the commitment and responsibility to worktogether in order to get the best result=sales.So it is clear Starbucks’ strategies had been innovated, in the way that itdoesn’t want to affront directly a new business in other countries, Starbuckshas been operating in foreign markets by sharing the costs of... [continues]
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