Entering a new market is one of a firm’s most important strategic choices (Rania A., 2014). Along with the development of business environment, many corporates would like to expand overseas. It is true that overarching and firm-specific factors such as business growth, reputation, markets and resources that are affecting the corporate to go international (Andrew H., 2011). Wholly owned subsidiary, joint venture, franchising and so on are the different strategies for corporates choosing to expand. In 2000, Starbucks Coffee Company chose joint venture to corporate with Maxim Cater Limited to enter Hong Kong’s market.
Two or more business pool their resources and expertise to achieve a particular goal, the risks and rewards of the enterprise are also shared is called “joint venture” (2011). For choosing this strategy, it can assist Starbucks to enter Hong Kong’s market a lot.
Access to new markets and distribution networks
Starbucks’ store base is also maturing, leading to a slowdown in the growth of unit volume and firm profitability. It has turned its attention to foreign markets for continued growth (Suresh and Debra, 2003). It is the reason why Starbucks needs to expand the business in new markets. For accessing a new market, it is possible to use joint venture with Maxim’s (a large-scale catering company), Starbucks can easily enter to Hong Kong’s market and set up different stores to sell the specialty coffee. Maxim can guide Starbucks to go through the starting process in Hong Kong’s market. Also, it can continue growing the business and achieve its mission of more people know its brand for accessing the new market. For the distribution, Maxim has well-developed many stores to distribute in Hong Kong’s different places like shopping malls and MTR stations. Although Starbucks enters to Hong Kong, Maxim also can help it to select the network for distribution. So Starbucks can take the advantage of it to increase the visibility and recognition....
References: Andrew, H. (2011) International entry and country analysis, December 2011
Rania, A. (2014) Foreign Market Entry Strategy & International Franchising, Doing Business in Morocco, 2014
Grow your business (2011) Joint ventures and Partnering, available from http://www.mas.org.uk/uploads/100flowers/Joint%20ventures%20and%20partnering%20%20(Business%20Link).pdf accessed 2011
Suresh, K. and Debra, G. (2003) Starbucks Corporation:Competing in a Global Market, 7 April 2003
Business Wire (2000) Starbucks Coffee Company Forms Joint Venture Partnership to Expand Into Hong Kong, 29 February, available from http://www.thefreelibrary.com/Starbucks+Coffee+Company+Forms+Joint+Venture+Partnership+to+Expand...-a059660139 accessed 29 February 2000
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