lOMoARcPSD|14996425
lOMoARcPSD|14996425
Case – Starbucks Entering Foreign Markets
1. Starbucks prefers a combination approach to foreign market entry: the use of
joint ventures and licensing. Do you agree with this approach? Why or why not?
I agree with this approach because both approaches assist in Starbucks not
only saving money in terms of FDI costs and upkeep but also requires less R&D for
Starbucks when the companies a part of such joint ventures are familiar with the
foreign customers and market wants/desires.
2. Many would argue that Starbucks coffee is expensive, and yet customers get
“value” for their money. How do you think Starbucks has been able to transfer this
business model and value proposition to international markets?
I think Starbucks gives its customers a unique experience by being able to
customize drinks and provide rare coffee blends not available in other local coffee
shops, that if customers tried to do such things at home it would actually be costlier
for the consumer than going to Starbucks. This is where the value comes in in terms
of purchasing power for consumers but value is also important for experience. Each
Starbucks experience is tailored a bit different for international markets but enough
for foreign consumers to get an American experience with influence from their
country’s preference all while with a price they are willing to pay for the experience.
Such an approach has been working quite well for Starbucks thus far.
3. Why did Starbucks not just go with a licensing approach internationally? Is the
preference for joint ventures in strategic target markets coupled with licensing
unique?
lOMoARcPSD|14996425
Case – Starbucks Entering Foreign Markets
1. Starbucks prefers a combination approach to foreign market entry: the use of
joint ventures and licensing. Do you agree with this approach? Why or why not?
I agree with this approach because both approaches assist in Starbucks not
only saving money in terms of FDI costs and upkeep but also requires less R&D for
Starbucks when the companies a part of such joint ventures are familiar with the
foreign customers and market wants/desires.
2. Many would argue that Starbucks coffee is expensive, and yet customers get
“value” for their money. How do you think Starbucks has been able to transfer this
business model and value proposition to international markets?
I think Starbucks gives its customers a unique experience by being able to
customize drinks and provide rare coffee blends not available in other local coffee
shops, that if customers tried to do such things at home it would actually be costlier
for the consumer than going to Starbucks. This is where the value comes in in terms
of purchasing power for consumers but value is also important for experience. Each
Starbucks experience is tailored a bit different for international markets but enough
for foreign consumers to get an American experience with influence from their
country’s preference all while with a price they are willing to pay for the experience.
Such an approach has been working quite well for Starbucks thus far.
3. Why did Starbucks not just go with a licensing approach internationally? Is the
preference for joint ventures in strategic target markets coupled with licensing
unique?
