Starbucks Fdi

In: Business and Management

Submitted By Tarequl
Words 514
Pages 3
Starbucks FDI Case:

Q 1: Initially Starbucks expanded internationally by licensing its format to foreign operators. It soon became disenchanted with this strategy. Why?

Ans: Because this strategy did not give Starbucks the control needed to ensure that the licensees closely followed Starbucks’ successful formula.

Note: “Starbucks successful formula” refers to its basic strategy, which was:

To sell the company’s own premium roasted coffee, along with freshly brewed espresso-style beverages, a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting also providing superior customer service.

Q 2: Why do you think Starbucks has now elected to expand internationally primarily through local joint ventures, to whom it licenses its format, as opposed using to a pure licensing strategy?

Ans: Starbucks has now selected to expand internationally primarily through local joint ventures rather than using the licensing format because it definitely gives starbucks the control of its success principle they keep following and includes that both owners having the responsibility of increasing the business they created. It is clear that Starbucks strategies had been innovated, in the way that it doesn’t want to upset directly new companies coming up in other countries, Starbucks has been operating in foreign markets by sharing the costs of being international, working on the advantages the foreign joint owner may provide, and also preparing the foreign working party by some trainings given by American employees. Example: In Japan, Starbucks decided to train the foreign working party by transferring some employees from the USA, so they could teach them the way to deal with customers and to follow the “Starbucks essence” in their behavior.

Q 3: What are the advantages of a joint venture entry mode for…...

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