COMPANY- Starbucks
Nature of business -Starbucks is primarily in the coffeehouse and retail industry. They
specialize in the sale of premium coffee, tea, and various food items. The company also
focuses on creating a unique and inviting atmosphere in their stores, emphasizing the
experience of enjoying high-quality beverages.
Modes of entry -Starbucks employs various modes of entry into new markets, including
joint ventures, licensing arrangements, and wholly-owned subsidiaries. The specific
mode of entry depends on the market conditions, regulatory environment, and business
strategy in each location.
Why this mode-Starbucks may choose a joint venture mode of entry in certain markets
to leverage local expertise and resources. This allows them to navigate cultural
nuances, understand customer preferences, and comply with local regulations more
effectively. Joint ventures also share risks and costs with local partners, providing a
collaborative approach to entering new markets.
Benefits:
Local Market Insight: Joint ventures provide Starbucks with valuable insights into local
market dynamics, consumer preferences, and cultural nuances through collaboration
with local partners.
Shared Resources and Risks: Sharing resources and risks with local partners helps
Starbucks navigate challenges and costs associated with entering a new market,
fostering a more sustainable and collaborative approach.
Faster Market Entry: Joint ventures often facilitate a quicker entry into new markets
compared to establishing wholly-owned subsidiaries, allowing Starbucks to establish its
presence more efficiently.
Challenges:
Coordination Issues: Managing a joint venture involves coordination between Starbucks
and its local partner, which can be challenging due to differences in management styles,
communication, and decision-making processes.
Cultural Differences: Navigating cultural differences between Starbucks and its local
partners may pose challenges in terms of aligning business strategies, customer
preferences, and overall brand adaptation.
Risk of Disputes: Differences in expectations or business priorities may lead to disputes
between Starbucks and its local partners, potentially impacting the success of the joint
venture.