Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Entry Strategies of Starbucks in China and UK - Case Study Example

Comments (0) Cite this document
This report has been written in an attempt to compare how Starbucks internationalises in China and the United Kingdom and evaluate. The idea of this research emerged from the author’s interest and fascination in why it chooses to use such entry strategies…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.6% of users find it useful
Entry Strategies of Starbucks in China and UK
Read TextPreview

Extract of sample "Entry Strategies of Starbucks in China and UK"

Download file to see previous pages This research will begin with the statement that when a firm seeks to enter a foreign market, the company must choose the most appropriate entry mode for that specific market. The decision of entry mode strategy has an important implication in company’s international expansion. The choice of international strategy has long-term implication for MNCs. There are six international entry mode strategies: exporting, licensing, a turnkey project, franchising, joint ventures and wholly-owned subsidiaries. There are different influential factors that determine a company’s international strategy in each situation. The effect of these factors may differ considerably with respect to different countries. Starbucks uses three different entry modes to internationally establish their business such as joint ventures, licensing and wholly owned subsidiaries. Each day nearly 2.5 billion cups of coffee are consumed. It is the 5th most widely traded commodity in the world and millions of people depend directly or indirectly on the production and sale of coffee for their income. The US coffee shop industry includes about 20,000 stores with combined annual revenue of about $11 billion. The industry is highly concentrated: the top 50 companies generate more than 70 percent of industry sales. The profitability of companies in the industry depends on the ability to obtain prime locations, create innovative promotion methods to increase customers, and deliver high-quality products. Big sized firms have advantages beginning from sourcing the beans to marketing their specialty coffee products owing to their easy availability of capital. Small companies can offer competition only by bringing in the local flavor to their restaurants based on their familiarity about the surroundings and also adding that personal touch to customer service. Coffee shops compete with businesses such as convenience stores, fast food restaurants, gourmet restaurants, and donut shops.
Target Segment:-
When specialty coffee was first being produced, its target consumer segment was the upper income class. This specific customer segment has been nearly fully penetrated. Any additional growth will come from those consumers with middle or lower incomes. These two segments are generally more motivated by discount products over branded products. Buyers are more aware and knowledgeable about specialty coffee and they are also demanding superior quality in the recent times. This results in further consumption of the product based on better information.
PEST analysis:
Rise in tensions between U.S. and rest of the world often results in negative impact on business activities of American brands like Starbucks in Middle East. Starbucks CEO Schultz was assumed to be close to Jewish society and was alleged to be funding their activities. Due to threats following this accusation Starbucks was forced to close down six stores in Israel. Starbucks imports all their coffee beans. So changes in import laws could affect production which can result in price variations of the product and in turn consumption too.
Starbucks has faced problems due to economic recession in countries such as Switzerland, Germany, and Japan in the early 2000s, where it caused declining sales and revenues for the company. Moreover, huge recession due to the global financial crisis also impacts the company’s results badly.
Starbucks is committed to a role of positive impact on environment in all of their business activities. They understand the environmental issues and share information with their partners and encourage them to participate in this mission. This only adds on to the positive image of the company.
Technological:- ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Entry Strategies of Starbucks in China and UK Case Study”, n.d.)
Retrieved from
(Entry Strategies of Starbucks in China and UK Case Study)
“Entry Strategies of Starbucks in China and UK Case Study”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Entry Strategies of Starbucks in China and UK

Entry Strategies and Globalization

... over the licensee and it does not control its own production and sales facilities (Kotler, 2003). In a licensing arrangement both parties involved share in the profits. A third type of market entry strategy is a joint venture. A joint venture is a business project in which foreign investors join with local investors to create company in which they share ownership, profits, and control. In a joint venture earnings are divided proportional to the ownership stake each part holds. Prior to China’s entrance to the World Trade Organization foreign companies could only enter China’s marketplace by entering into a joint venture with a Chinese company. The fourth type of market entry strategy is a direct investment. Direct investment occurs when...
2 Pages(500 words)Essay

Starbucks Delays India Entry

... market entry by end of October”). Starbucks is planning to expand aggressively, by adding 3500 stores round the world. It has also planned to increase the number of shops in US to 20,000 and then eventually 40,000. (Starbucks Newsroom “Tata Starbucks Limited Readies for India Market Entry by End of October”). Starbucks planned its roadmap to venture in India with Tata Global Beverages, though according to the present legal framework of the country, Starbucks could have entered India without any partner, yet the company is planning to enter into a 50-50 joint venture with TATA Group. As far as marketing strategies of Starbucks are concerned for India, the strategies that they have formulated for the US target market would not assist them...
7 Pages(1750 words)Case Study

Market Entry Strategies

... Research (JMR), Vol. 45 Issue 5, p575-592 Elena, S. 2012. The Strategic Alternatives for Emerging Markets Entry Strategies of Multinational Companies and Their Main Investments in Romania. Review of International Comparative Management / Revista de Management Comparat International, Vol. 13 Issue 2, p337-347 Feng, Z & Marco, I. 2012. Entry into platform-based Markets.  Strategic Management Journal, Vol. 33 Issue 1, p88-106. Gwendolyn, L. 2008. Relevance of organizational capabilities and its dynamics: What to learn from product entrants portfolios about the determinants of entry timing.  Strategic Management Journal, Vol. 29 Issue 12, p1257-1280. Guo, W & Turner, L. 2002. Entry strategies into China for foreign travel companies. Journal...
10 Pages(2500 words)Essay

Global Market Entry Strategies

...Case Study: Ultravac Global Market Entry Strategies Offer both Opportunities and Threats, Impacting on Managers' Decisions, and Organization Success1 (a). List and describe the external factors faced by Ultravac in both its domestic and international environments (800 words). Ans. Key external factors faced by Ultravac in Domestic environment are; There were few competitors, which made the company bit complacent in their approach and company officials did not think it fit enough to devote much of their time towards shaping the long-term future of the company. In 1982, the company won a national award for one of their medical pumps. Though it came as a pleasant surprise for the company, but it helped the company in gaining wide publicity...
12 Pages(3000 words)Essay

SMEs Entry into China

..., 2008, from china_wto_part_I_II.htm. Johanson, J. & Vahlne, J. E. (1977). The Internationalization Process of the Firm: A Model of Knowledge Development and Increasing Foreign Market Commitments. Journal of International Business Studies, 8(Spring/Summer). Lowe, Julian, & Wan, Stephen. (n.d.). Market Entry Strategy into China of by Entrepreneurial New Venture Firms. Centre for Regional Innovation and Competitiveness (CRIC), University of Ballarat, Australia. Williamson, O. (1985). The Economic Institutions of Capitalism. New York: Free Press....
2 Pages(500 words)Essay

Analyse the market entry strategies adopted by Starbucks, examining the obstacles faced by the management team which may have influenced the choice entry strategy used by the business on entering 2 countries: The UK and China

... coffee shops round the world – either company-operated or licensed stores. After a stable business in North America, Starbucks started looking at international expansion through licensing and joint-venture partnerships (Darguste, Su, Tu & Wei (2002). They were aware of the different cultural features in different markets and hence tried to alter their international expansion strategy in different regions (Starbucks, 2003). The MNC also needs to pay attention to local consumption habits apart from facing the resistance from anti-globalization organizations. Because of this, several competitors have to be faced as all look for early mover advantages. This report analyzes the entry strategies of Starbucks for the UK and China. Methodology...
9 Pages(2250 words)Essay

Market Entry Strategies

...LUSH’s transfer to Brazil Contents Contents 2 Introduction 3 Reasons for selection of the new country by LUSH using SWOT analysis 3 Analysis of alternative markets that were suggested but not selected by the company using PESTEL analysis 6 Proposed market entry strategy including rationale 8 Outline of the recommended marketing mix 9 References 12 Introduction LUSH is a company known for its fresh handmade cosmetics having its headquarters in United Kingdom. Lush started off with a small store in UK in Poole in the year 1995. They operate their business through franchisee, partnerships and currently have partners in North Africa and Middle East. The company operates with more than 900 stores worldwide in almost 50 countries. Lush...
10 Pages(2500 words)Case Study

Entry Strategies and Exporting

...Entry Strategies and Exporting Introduction Over the of the past few decades, it has been operational, M and W have proven to be a very profitable firm and in its home market it has virtually taken over the apparel industry. Although it is not a monopoly, it has made sizable inroads into the market share of every other competitor and it currently holds approximately 70% of the national market share. This has resulted in high profits and numerous other benefits; however it appears the firm has reached a saturation point and it cannot reasonably expect to achieve any significant growth in the local market. Consequently, the firm stands at the threshold of the next step which is taking its operations to the international level, studies both...
14 Pages(3500 words)Essay

The Economic Impact of the Emergence of China and India

... and materials that are part of Toyota’s operations—the supply side of the automobile industry. The effects of this inflation do not stop in the supply side of the automobile industry which could significantly impact a firm’s cost structure. With the rising fuel prices, demand for automobiles is threatened too, as fuel is a complementary product of automobiles. At least in order to address the threat in the demand, Toyota put on the initiative to create a hybrid car which has saved its operations from this. The other economic impact of the emergence of China and India is its low-cost labor strategy that makes outsourcing to these countries attractive to automobile manufacturers. This can give a company the cost advantage it needs...
10 Pages(2500 words)Assignment

Language Learning Strategies of Listening Comprehension

...Do meta-cognitive Language Learning Strategies assist in the SLA of listening comprehension? Learning Disabilities Even though most researchers agreeabout the characteristics of learning disabilities, there is a disagreement about what should or should not be included in the definition of learning disabilities. While there is some agreement about these general topics, there is continued disagreement in the field about diagnostic criteria, assessment practices, treatment procedures, and educational policies for learning disabilities. A number of influences have contributed to these disagreements, which in turn, have made it difficult to build a generalized body of scientific and clinical knowledge about learning disabilities. Furthermore...
10 Pages(2500 words)Case Study

Strategies of the South African Government

Maslow has argued that security and safety are required by all human beings (Boeree 2006). According to the Federation Internationale de Football Association (2009), Uruguay was the first nation to host the Fifa World Cup. In 2010, South Africa would be the first African nation to host the next World Cup. But Euromonitor (2009) considers that South Africa is a country with a significant rate of insecurity that would influence the trip to South Africa. Various security strategies will have to be reviewed by the South African Government in order to implement security and safety during this big event (Republic of South Africa, 2008). To accomplish the safety of the tourists during the World Cup 2010, many South African cities have in...
17 Pages(4250 words)Research Proposal

China Faces Pressure over Currency

Making its products cheaper in the US and thus encouraging imbalanced trade. It has been universally agreed that the free-floating Yuan would be significantly worth 15 cents.
Chinese economists feel that the impact has been over-exaggerated and particularly to America from Yuan revaluation. In particular, a stronger Yuan will not reduce the US’s trade deficit as there is a very smart segment of overlap between China and America Production and hence the US will not be able to replace Chinese imports. The consumer will end up paying more for imports from china or Vietnam and this would be like imposing a tax on US consumers.
The World Bank chief also disagrees with the US’s suggestion on China's currency rise a...
9 Pages(2250 words)Assignment

UK Employment Policy

Analysts explain that this situation is not simply because citizens don’t want to exercise this fundamental right, but largely because of the continued failure of the governments to institute an effective implementation of employment policies put in place (Howell, 2005). It has clearly been demonstrated by Mathew (2006) that the United Kingdom government has shown a lot of unwillingness in tackling the reported unemployment crisis.

Available research findings reveal that there are high unemployment rates among UK born ethnic minorities which show great diversities. According to a 2001 report, it is shown that unemployment rates amongst UK born men and women from black, Bangladeshi and Pakistani ethnic groups were...
9 Pages(2250 words)Case Study

Contrast of Two Explanations of Social Disorder in Contemporary UK Society

As the process of urbanization takes off and more people start residing in major cities, the fissures start to appear within the apparent harmonious co-existence. There are several reasons why disorderly conduct on part of individuals and groups takes place. Sociologists have proposed numerous theories explaining this phenomenon.

Erving Goffman was an astute observer of society, who immersed himself in the social environment which he was studying. He carefully observed and recorded the ways in which people’s behavior and interpersonal interactions are carried out in everyday life. He notes that “people perform their social roles and, as they do so, they produce social order through their actions and the regu...
6 Pages(1500 words)Article

Foreign Market Entry and Diversification

... some of the recent trends have prompted the prediction that consumption of beer will go down in some of European countries like France, Spain and Germany. The threat of such a consequence has forced many companies to focus on the emerging markets like those of Asian countries where people are likely to spend a large sum of money on the consumption of beer and other alcohol. People in Sweden and UK are found to shift their inclination from to wine. Russia might emerge as the biggest market of beer since consumers there are found to accept beer more readily than vodka. It is quite evident from the graph given below that China is likely to see a sharp rise in beer consumption by the end of 2012. Poland, Romania and Ukraine are also expected...
7 Pages(1750 words)Assignment

The Key Macro Factors that Have Influenced the UK Grocery Retailing Industry since the Early 1960s

...1. Assess the key macro factors that have influenced the UK grocery retailing industry since the early 1960s. The concept of organisational change is inherently intertwined with external threats and opportunities, which businesses must adapt to as part of strategic planning to continue long term growth. Senior and Fleming argue that the concept of organisational change has many faces, namely “convergent changes and transformational change that is organisation wide and characterised by radical shifts in strategy, mission values and associated changes of structures and systems” (In Thompson & Martin, 2005, p.41). Moreover, Johnson et al highlight that external macro-economic factors intrinsically impact strategy management and without...
13 Pages(3250 words)Assignment

HRM Issues and Diversification Strategies of Nucor Corporation

The cyclical nature of the steel industry is too demanding for numerous business owners. Nucor has undeniably come through this business cycle to sustain an affirmative profit edge in each quarter since 1966 (Boyd & Gove, 2000).

In spite of their discouraging entrance in the steel industry, Nucor Corporation has become a benchmark for both the U.S. steel industry and the U.S. industry in general. It is one of the fastest-growing and most resourceful steel producers around the globe. Regardless of the decreasing demand for steel, Nucor’s expansion has been exceptional; the company is among the top producers of steel in the U.S. Without a Research and Development department, Nucor has constantly accomplished techno...
7 Pages(1750 words)Case Study

Marketing of Services: Starbucks Company

The employees are also awarded stock options. Through this, their salary may rise by 14% of the gross pay. The stock investment plan allows the buyers to buy common stock of the company at a discount. They can get hold of it in 85% of the fair market value. The other fringe benefit that the company provides is that of “Future Roast” 401(K) Plans. The employer matches the employee’s contribution to this plan by adding from 25 to 150 percent of the first 4 percent of pay. It is depended on the length of the service.

All these benefits get reflected in the result of employee job satisfaction. In Starbucks, the Employee Job Satisfaction rate is 82% as per the report of Hewitt Associates Starbucks Partner V...
6 Pages(1500 words)Assignment

Market Entry into China

The living standards of the Chinese consumers are increasing. The country has a large proportion of the middle-class population. China has millions of potential car buyers that make foreign automobile companies enter the Chinese market. China ranks third among all car manufacturing countries. The prices of automobiles, automobile parts, and import tariffs got reduced after China entered the WTO. The cost of labor is cheap in China and the automobile industry in China is extremely competitive. This is the reason that automobile manufacturers in other countries are exploring opportunities in the Chinese market (Jun & Zhiqiang, 2008).
Mitsuoka was founded in the year 1968 by Susumu Mitsuoka. Mitsuoka is a luxury car maker i...
6 Pages(1500 words)Assignment

Market Entry Strategies

... to the product. Even more there is a potential danger of knowledge spillovers and licensee may become a competitor in future once the license time period is over. 3. Joint Venture: joint ventures can be defined as "an enterprise in which two or more investors share ownership and control over property rights and operation" (Market Entry Strategies n.d.).While joint venture facilitates the sharing of technology and work load it also ensures financial strength. Joint venture entails medium level of control as both the organizations in it work at the same level and there is no one boss who can dictate the working of joint venture rather it is more about mutual cooperation. It is a very suitable way of entering in a foreign market when...
17 Pages(4250 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Entry Strategies of Starbucks in China and UK for FREE!

Contact Us