Starbucks Case

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THE GLOBALIZATION OF STARBUCKS
1. Where did the original idea for the Starbucks format come from? What lesson for international business can be drawn from this? The original idea for the Starbucks format came from the 1980´s when the company´s director if marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience, the idea was to sell the company´s own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products in a tastefully designed coffeehouse setting. The focus was to sell a “third place experience”. Starbucks is an important lesson for international business, because good ideas can be found everywhere, we just have to be open to a different experiences, different cultures and different business, a lot of good things from other cultures can be the key to succeed in a different market, not just because of the globalization parameter that shows us the world is getting similar in a lot of aspects, and people tend to like the same things, but there are still huge cultural differences that can take place and turn into a benefit at the time to sell a new product or introduce a new concept to a new market. 2. What drove Starbucks to start expanding internationally? How is the company creating value for its shareholders by pursuing an international expansion strategy? Companies go international for a variety of reasons, but the goal is typically company growth or expansion. Whether a company hires international employees or searches for new markets abroad, an international strategy can help diversify and expand a business, and is creating value for its shareholders because introducing new products internationally can expand a company's customer base, sales and revenue, and plus will give them internationally recognition and prestige. 3. Why do you think Starbucks decided to enter the Japanese market via a joint venture with a Japanese company? What lesson can you draw from this? I think Starbucks entered the Japanese market via joint venture with Japanese partners because they could extend their brand and that brand extension will give Starbucks access to new customers and channels of distribution. The lesson learned from this is that sometimes it is easier and faster reach a new market via joint venture, even though the profit will be less, but the company can save a lot of money in studying the new market trying to understand the new culture and how they purchase and also it can minimize the risk because there is a national brand supporting the new international brand, which gives confidence and security to the customers. 4. Is Starbucks a force for globalization? Explain your answer.

I think Starbucks certainly is a force for globalization, and already is, with presence not just in North America but Canada, Japan, Britain, Thailand, etc and not just because it offers a product (coffee) that is known and sold around the world very well, so it is easier to reach customers because people are familiar with drinking coffee, as a part of the daily basis, and plus the idea of a coffeehouse, a place to go and spend some time with friends, or studying, or even for business meetings is also a hit in a lot of cultures, these are regular activities for a good amount of people, so the market is there, the coffee culture is already there too, Starbucks will have to analyze other type of situations like competitors, or purchasing power of the specific country to determine if open the stores in all the countries is a good idea.

5. When it comes to purchasing coffee beans, Starbucks adheres to a “fair trade” program. What do you think is the difference between fair trade and free trade? How might a fair trade policy benefit Starbucks?

The difference between a fair trade and a free trade is
Fair trade - Makers of the goods (coffee classic example) get more of the...
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