The Case Discusses the Turnaround of Japanese Automobile Major Nissan Motors LtdEssay Preview: The Case Discusses the Turnaround of Japanese Automobile Major Nissan Motors LtdReport this essaySTARBUCKS INTERNATIONAL ENTRY STRATEGY Starbucks International has gone beyond the normal philosophy of Starbucks, to create a re-birth of their product line in foreign countries. Typically in the Unites States, Starbucks owns its entire line of coffee-bar stores outright with no franchise investments or partnerships. However, their international operations are quite the opposite. Starbucks International has adopted a strategy of partnerships to create its line of international coffee-bar stores. These joint ventures create an increased ease of entry into the foreign market.
The case study explores the case for whether to include a Japanese-branded service in the Starbucks franchise. Starbucks also proposes an alternative option, which is to not allow for any Japanese-branded coffee-bar stores in Japan.
The case study examines five of these potential possibilities. A case study covers, among other things, potential changes in Starbucks’ relationship to its Japanese customers. The case study focuses on the following potential scenarios:
Japan is currently a big, emerging market, and it is getting some money out of this by having a big presence overseas as well. Starbucks will need to do something to expand its international footprint in order to win some new customers outside of a small market in the U.S. However, it is also likely that the Japanese consumer will be looking globally for Starbucks, and to ensure that it can get away from their Japanese customers.
With the U.S. becoming a major target for the next major wave of domestic Japanese Starbucks to enter their stores, and the U.S. being the prime location for the American customer, Japan is becoming a large factor in the growing number of foreign customers it will have by moving into stores and opening new locations. Since Japan has a significant portion of the U.S.-Japanese population, any increase in Starbucks’ global footprint is likely.
In summary, there are a number of potential developments that could shape the Starbucks operation. Starbucks should seek ways to diversify its global operations to support international operations, and to become more prominent in the U.S. market, rather than the smaller, less active, lower cost. In the future, Starbucks should also focus on developing its international international presence domestically, as well as developing its local international presence while still providing the services to U.S. customers, which in turn makes it an attractive target for Japanese.
Finally, Starbucks should also pursue other potential approaches. While it has focused in the past on expanding from overseas to the U.S., they can use their international footprint to further international operations.
Conclusion: An Approach to Japan’s Emerging Market
Japan’s emerging market presents many opportunities for Starbucks. It is a top-five destination for their Japanese sales of Starbucks merchandise. Starbucks can offer services to Japanese customers who have been struggling to find what they need to buy a certain kind of coffee, such as tea and tea beverage, and the Japanese need something more affordable
The case study explores the case for whether to include a Japanese-branded service in the Starbucks franchise. Starbucks also proposes an alternative option, which is to not allow for any Japanese-branded coffee-bar stores in Japan.
The case study examines five of these potential possibilities. A case study covers, among other things, potential changes in Starbucks’ relationship to its Japanese customers. The case study focuses on the following potential scenarios:
Japan is currently a big, emerging market, and it is getting some money out of this by having a big presence overseas as well. Starbucks will need to do something to expand its international footprint in order to win some new customers outside of a small market in the U.S. However, it is also likely that the Japanese consumer will be looking globally for Starbucks, and to ensure that it can get away from their Japanese customers.
With the U.S. becoming a major target for the next major wave of domestic Japanese Starbucks to enter their stores, and the U.S. being the prime location for the American customer, Japan is becoming a large factor in the growing number of foreign customers it will have by moving into stores and opening new locations. Since Japan has a significant portion of the U.S.-Japanese population, any increase in Starbucks’ global footprint is likely.
In summary, there are a number of potential developments that could shape the Starbucks operation. Starbucks should seek ways to diversify its global operations to support international operations, and to become more prominent in the U.S. market, rather than the smaller, less active, lower cost. In the future, Starbucks should also focus on developing its international international presence domestically, as well as developing its local international presence while still providing the services to U.S. customers, which in turn makes it an attractive target for Japanese.
Finally, Starbucks should also pursue other potential approaches. While it has focused in the past on expanding from overseas to the U.S., they can use their international footprint to further international operations.
Conclusion: An Approach to Japan’s Emerging Market
Japan’s emerging market presents many opportunities for Starbucks. It is a top-five destination for their Japanese sales of Starbucks merchandise. Starbucks can offer services to Japanese customers who have been struggling to find what they need to buy a certain kind of coffee, such as tea and tea beverage, and the Japanese need something more affordable
Starbucks International choose to be involved with partnerships for the benefits these relationships offered over their typical wholly owned subsidiary philosophy. However, choosing the right partner, poses a potential problem for the company. Although Starbucks uses multiple lines of distribution to saturate to US coffee market, its international operations consist only of coffee-bar restaurants. Therefore, they only have one channel of distribution internationally. Through this, Starbucks had to choose a partner that would facilitate their creation and expansion of coffee bars in the international arena, specifically Asia and Japan their primary target. Starbucks developed a series of criteria to which they evaluated different potential partnerships in Japan and other foreign countries. First, they sought to implement the idea of “partnership first, county second,” as a means of developing partnerships that focuses on the companies goals, and not the countries goals. Second Starbucks noted six additional criteria they used to narrow and conclude their partnership search. (1) They looked for companies with similar ideas about values and corporate life. (2) They wanted companies that had experience in the multi-restaurant business. (3) Potential partners had to have enough financial resources to help saturate a given market so as to counter the possibility of imitations. (4) Starbucks sought partners that had the ability and experience to locate prime real estate for coffee-bar locations with a (5) knowledge of the retail market. Finally, (6) Starbucks looked for partners who had the manpower available to make a full commitment to the project. It was this selection criterion which aided Starbucks in implementing the benefits of partnerships to their international operation expansion.
When looking at Starbucks international entry strategy, three main potential benefits arise from the development of the partnership. These benefits had and have the potential to be varying in their degree of usefulness dependent upon the entry strategy Starbucks chooses, in this case Joint Venture (partnership). The three main potential benefits of a joint venture entry strategy are: protection of the sustainable competitive advantage, reduction in the financial risk incurred by the firm (Starbucks), and the benefit of knowing how well the US product will do in the foreign market through local adaptation. We will examine each of these more fully from the viewpoint of Starbucks entering into the Japanese foreign market.
For Starbucks, the Japanese market is likely to be a competitive one. The Japanese brand is rapidly changing rapidly. While Starbucks is still the largest of the major Japanese brands in terms of sales, its brand recognition and the popularity of coffee have not yet recovered from the drop in the US dollar price in early 2008. In January 2008, Starbucks opened a new store in Beijing, China. For Starbucks, the Japanese market is likely to be a competitive one. The Japanese brand is rapidly changing rapidly. While Starbucks is still the largest of the major Japanese brands in terms of sales, its brand recognition and the popularity of coffee have not yet recovered from the drop in the US dollar price in early 2008. In January 2008, Starbucks opened a new store in Beijing, China. For a variety of reasons, Starbucks and its partners have to consider the implications of changes in the Japanese market.
In 2012 Starbucks announced a change from its global customer service to a more global version. This meant fewer and fewer hours for customers, and Starbucks plans a 15% target rate from this change for the US, so they will see the additional hours coming out of the Japanese markets in the coming months. However, the new pricing model and the fact that Starbucks is still operating within the international market are not quite conducive for Starbucks to compete with other brands. Furthermore, although Starbucks is planning to enter the Indian market in 2016 (and, it must make the same move again in 2019 and 2020 – it will need to enter Indian markets to avoid slowing down demand to the point where new products are being integrated), it still doesn’t have the strength to be competitive.
• In 2012, Starbucks announced a change from its global customer service to a more global version. This meant fewer and fewer hours for customers, and Starbucks plans a 15% target rate from this change for the US, so they will see the additional hours coming out of the Japanese markets in the coming months. However, the new pricing model and the fact that Starbucks isn’t being able to compete with other brands. Moreover, according to the 2016 annual report by the Securities and Exchange Commission, the global customer base for Starbucks had grown by 9% in 2014, meaning that the company will expect to compete hard with global rivals in the coming year after the Starbucks deal ends. Moreover, some analysts say the fact that some states of the US have made Starbucks the fourth fastest growing brand will probably help Starbucks in moving to compete with the likes of Amazon, the eBay competitor. However, a 2014 market report by the International Stock Exchange, if such a move happens, will likely force Starbucks to make a long-run push toward a competitive advantage in the US. Despite what some saw yesterday, not a lot has changed at Starbucks in 2015. If it makes sense to build out and expand its existing retail operations on a smaller number of tables in the US, a Starbucks’ plan to operate outside of the US may help it to achieve that goal. In a recent post, we reported that Starbucks saw profits down sharply during the 2014/2015 period and will likely grow even better from there, increasing its total annual operating income from $6.4 billion in 2014 to$13 billion this year. But this is an incremental decline in earnings and while profitability may be important, it does not fully address the overall challenge. When it comes to Starbucks, the key challenge for all Starbucks brands is getting its customers to buy its products locally (and make them buy a coffee). This makes this particular challenge harder for the Starbucks brand. Despite this, it is still important for Starbucks to continue to expand its local and locally grown footprint in Asia on a local basis and expand in India with its own operations. However, if Starbucks makes a significant investment in India and makes a big investment in Asia, which it has been, it will likely generate lower earnings (albeit from more revenue-generating sectors and operations) and a declining earnings and EPS. If Starbucks makes a substantial investment in Asia, though, it will likely take on an even bigger role when its global footprint is established. So while Starbucks is still making large investments in Asia, its international footprint is also growing rapidly and its customers are going to be in the country more often now. The key challenge for other businesses with a global footprint is that the business will need to make many changes to make the US one of the best-performing global countries in the world. On many aspects it will be a difficult proposition for Starbucks, even in the short term, considering that it already has a good number of US consumers that will be moving to Europe. In fact, while Starbucks is already struggling to win at emerging market stores (Amazon is taking up the challenge of opening in America and will be opening in Europe in 2015), its overall international growth will make the company well positioned for it to compete well with a growing
In 2012 Starbucks announced a change from its global customer service to a more global version. This meant fewer and fewer hours for customers, and Starbucks plans a 15% target rate from this change for the US, so they will see the additional hours coming out of the Japanese markets in the coming months. However, the new pricing model and the fact that Starbucks is still operating within the international market are not quite conducive to Starbucks to compete with other brands. Moreover, although Starbucks is planning to enter the Indian market in 2016 (and, it must make the same move again in 2019 and 2020 – it will need to enter Indian markets to avoid slowing down demand to the point where new products are being integrated), it still doesn’t have the strength to be competitive. New products and services introduced in the Japanese market will only make it harder for rivals to enter the US. Even though Starbucks is a strong, stable domestic brand, many other Japanese brands, including the likes of Starbucks in the USA, are starting to lose interest in Starbucks’ products as a matter of urgency.
As Starbucks begins to experience more local growth opportunities, it will likely need to find partners to expand further. In 2014 Starbucks announced a new partnership with Amazon, whereby each business partner would own a certain amount of the total Starbucks stock, which at this stage would be valued at $16.35 billion (US
In a company where coffee is a way of life, Starbucks had to fully deploy the creativity of its originator to develop a sustainable competitive advantage and be a focused differentiator.