Unlike in North America, the company adopted a franchising strategy in foreign countries like Japan by licensing its format. The company sought to gain initial licensing fees and royalties on store revenues…
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As such, the strategy allowed Starbucks to sell coffee and related products to the local licensees, which then resold them to customers. However, the company altered its strategy after the disenchantment with some of the straight licensing arrangements. This sought to establish greater control over the expansion strategy, derive the benefits of a local operating partner, and ensure that Starbucks adapts to local market needs in foreign investments.
The Starbucks’ SWOT analysis tells me that the company has the potential and aggressiveness to expand and compete effectively in the industry. With more than 4,600 outlets around the world, the company has a huge market presence that defines its competitive advantage. The experience of Starbucks’ managers derives effective management that helps the company to address different challenges and respond to market trends. Indeed, the company’s expansion strategy is one of the best in the industry subject to its resultant benefits. The company is enjoying huge sales turnover that enhances it financial stability and potential for expansion. The company is maximizing the available market opportunities and has the aggressiveness and potential to invest in more than 15,000 stores outside of the United States. The company hires experienced and highly qualified employees that design and implement its market strategies and address potential challenges. Nevertheless, it is clear that Starbucks’ suffered from the economic depression and the September 11, 2001 terrorist attacks though it has since recovered.
Howard Schultz depicted his leadership in using his Italian coffeehouse experience to persuade Starbuck’s owners to experiment with the coffeehouse format that bore the Starbucks experience. He uses his leadership style to hire highly qualified personnel and allow them to do their job (Schwartz 1). Schultz uses
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However, this case of Starbucks shows that there are various challenges in India that can affect the company in its endeavour to penetrate this market. As such, this paper seeks to outline the challenges that face Starbucks in its attempt to penetrate this seemingly lucrative but complex market.
Its overall business strategy encompasses a series of other segmental operations. Starbucks has adopted a functionality-based approach to business strategy and decision making in the larger context of corporate expansion, both within the US market and other regions.
Starbucks sells brewed coffee, espresso-based hot drinks, hot and also cold drinks, snacks and products for instance mugs and coffee beans. Starbucks has an entertainment division and Hear Music brand, Starbucks also markets music, books and film. A lot of these items are seasonal or specific to the locality of the store.
Each one of them had invested about $6,350 in the store, and believed that they would build a client base in the Seattle area. This was a strategic decision because each one of them has a very clear vision of huge market of fine coffee. Since then, Starbucks stores network is ever increasing and it has 6,500 retail locations all over the world from Latin America to Europe and Middle East to Far East and it has become so popular and well known, that in near future it would be as recognizable as major names such as McDonalds and Coca-Cola (Kembell et al.
We shall be discussing some pertinent questions related to this.
A number of researches have already been concluded as to the choice between product standardization and adaptation. They yield contradicting and sometimes confusing results, but the central lesson that stem out of these analyses is that the choice whether to standardize or adapt the marketing strategy that fits the local country is largely dependent on the circumstances that surround the firm within a specific country given a specific period of time.
The principal activity of Starbucks is to purchase, roast and market whole bean coffees. It markets rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, a selection of premium teas.