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    Globalization Starbucks 1

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    israt jahan
    Starbucks originated the coffeehouse format after the company's director of marketing, Howard Schultz, was inspired by Italian coffeehouses. He persuaded Starbucks' CEO to try the new format in the US. As Starbucks reached market saturation in the US, it began expanding internationally to Japan through a joint venture with a Japanese company in order to benefit from a local partner's experience and reduce risks. Starbucks' international expansion has grown the company's profits and stock value, benefiting shareholders. The spread of Starbucks around the world has made its American coffee culture more global.

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    Globalization Starbucks 1

    Uploaded by

    israt jahan
    116 views2 pages
    Starbucks originated the coffeehouse format after the company's director of marketing, Howard Schultz, was inspired by Italian coffeehouses. He persuaded Starbucks' CEO to try the new format in the US. As Starbucks reached market saturation in the US, it began expanding internationally to Japan through a joint venture with a Japanese company in order to benefit from a local partner's experience and reduce risks. Starbucks' international expansion has grown the company's profits and stock value, benefiting shareholders. The spread of Starbucks around the world has made its American coffee culture more global.

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    Globalization starbucks 1

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    Starbucks originated the coffeehouse format after the company's director of marketing, Howard Schultz, was inspired by Italian coffeehouses. He persuaded Starbucks' CEO to try the new format in the US. As Starbucks reached market saturation in the US, it began expanding internationally to Japan through a joint venture with a Japanese company in order to benefit from a local partner's experience and reduce risks. Starbucks' international expansion has grown the company's profits and stock value, benefiting shareholders. The spread of Starbucks around the world has made its American coffee culture more global.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    116 views2 pages

    Globalization Starbucks 1

    Uploaded by

    israt jahan
    Starbucks originated the coffeehouse format after the company's director of marketing, Howard Schultz, was inspired by Italian coffeehouses. He persuaded Starbucks' CEO to try the new format in the US. As Starbucks reached market saturation in the US, it began expanding internationally to Japan through a joint venture with a Japanese company in order to benefit from a local partner's experience and reduce risks. Starbucks' international expansion has grown the company's profits and stock value, benefiting shareholders. The spread of Starbucks around the world has made its American coffee culture more global.

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    © All Rights Reserved
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    of 2

    1. Where did the original idea for the Starbucks format come from?

    What lessons from


    international business can be drawn from this?

    After returning from an overseas trip to Italy, Howard Schultz, the company's director of marketing at
    the time, came up with the idea for the first Starbucks fo1mat. He was inspired by his time spent in an
    Italian coffeehouse and persuaded the company's CEO to try the fonnat. We can see from this example
    that in industry, we can always take inspiration from other countries, and it is best that we do so. We
    can see from this example that in business, we can always take inspiration from other countries. It is
    better to search for innovations in the global market and integrate those ideas into a successful business
    model.

    2.What drove Starbucks to start expanding internationally? How is the company creating value for its
    shareholders by pursuing an international expansion strategy?

    Since its market in the United States had run out, Starbucks expanded to Japan. They had already
    opened 700 stores and had very few new retail options in the United States. They were able to
    expand their business into new markets and raise profits by opening stores in Japan. They generate
    value for shareholders by growing the company's value and profitability by expanding globally.
    Starbucks' stock increases as a result, leaving shareholders satisfied.

    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?

    Despite the fact that Starbucks had revolutionized the way Americans drank coffee in the United
    States, it lacked foreign experience. They would be more successful in making the American Starbuck
    experience appealing to the Japanese if they collaborated with a well-established Japanese retailer.
    Furthermore, since —the Starbucks format was licensed to the venture" and they would be
    responsible for its expansion in Japan, Starbucks would reduce the risk. Since both businesses were
    extremely competitive in terms of growth and benefit, this could be a useful model for • •
    4. Is Starbucks a force for globalization? Explain your answer.

    Starbucks is a globalising force since it has developed internationally and taken American ideals with
    it. Going to Starbucks used to be a distinctly American experience, but as the business evolved, it
    became a global meeting place for coffee drinkers. Starbucks' expansion spread American culture
    around the world by changing the way people drink coffee.
    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?

    Fair trade differs from free trade in that it imposes limits on the factors of production of a commodity.
    These restrictions can be used to protect workers' salaries and ensure safe working conditions during
    the manufacturing process. Free trade, on the other hand, decreases trade barriers between
    countries, resulting in a more competitive economy where goods can be traded more easily. Starbucks
    follows a fair trade strategy, which helps the company portray a more optimistic and environmentally
    friendly picture. It also enhances the working conditions of those who provide them with
    commodities and "empowers small-scale producers," meaning that those individuals and
    organisations can continue to do business with them in the future.
    6. Is Starbucks a global or regional multinational enterprise (NINE)? Explain.

    Starbucks is a multinational MNE because its stores sell and distribute the same goods and services all
    over the world. It enforces an intensive training program in each location to ensure that the same
    programs are delivered everywhere. Its sales come from shops all over the world, not just in North
    America.

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