Starbucks benefited from international expansion by finding local business partners and using experienced managers. Starbucks currently has 8,400 stores, 2,000 of those stores are located in 31 countries other than the United States. 2) Starbucks has been so successful internationally because it formed joint ventures with local retailers in each country. Starbucks also focused its operations to replicate the Starbucks experience in North America. So Starbucks focused on quality employee/customer interactions. For this to happen, Starbucks made sure each employee attended training.
With this, Starbucks offers their employees with compensation policies that gives them stock option grants and medical benefits, this allows employees to respect their work environment. Starbucks is also successful because of its wide array of products, coffee, tea, expresso drinks, etc. Starbucks also focuses highly on location, placing businesses in high traffic areas to utilize as much business as possible. The difference between global standardization and local customization is that global standardization is a marketing approach that is used globally.
It works across different cultures and countries to promote a product. Starbucks uses global standardization in marketing their product. Starbucks uses this strategy to maximize profit. They utilize this strategy to create uniformity in their products. This allows them to create a well-known brand in which everyone will recognize. People visiting other countries will know that when they walk into a Starbucks everything will be the same, and some people enjoy the “at-home” feel while visiting a never before seen country. ) Starbucks strew away from licensing its format to foreign operators and began to convert several into joint venture agreements. They did this because they felt their licensee’s wouldn’t be able to keep up with Starbucks aggressive growth targets. Starbucks wanted to be able to gain total control over expansions in the other countries. Forming joint ventures allowed Starbucks to exercise greater control over the growth strategy. With licensing, Starbucks had very limited control of their expansion rate.
Starbucks’ strategy is quick expansion to build consumer habits while their brand is still in brand maturity, and with licensing they weren’t able to expand as quickly as they had wanted. 4) Starbucks elected to expand through local joint ventures as opposed to pure licensing because using pure licensing would give Starbucks only limited control of their expansion rate. Whereas in joint ventures, Starbucks is able to control their rate of growth. Starbucks needed a larger measure of control and this was made possible through joint ventures.
Starbucks would still be able to access the local knowledge needed to expand through their joint venture partner. 5) The advantages of a joint venture entry mode over entering through wholly owned subsidiaries are that joint ventures give Starbucks access to the local knowledge and local markets, to be able to pinpoint their target markets. Also, a joint venture entry gives Starbucks the power to exercise a large measure of control, even though it may not be to the same degree as a wholly owned subsidiary.