Starbucks Capstone Project

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Question description

Project I wrote about is on Starbucks Capstone Project.

Write a 1000 word, APA style paper where you complete the requirements for Part 1 of the Project Proposal. Part 1 must include the following:

Introduction:

Provide an introduction and overview of the selected company along with an initial analysis of the growth opportunity.

Identify the following:

  • Country of choice
  • Mode of entry

In your paper include a title sheet and 2-3 references. Only one reference may be found on the internet. The other references must be found in the Grantham University online library.

BUS499 Capstone Project 1 Starbucks Capstone Project Tracy Hunt BUS499 Business Policy and Strategy December 12, 2017 BUS499 Capstone Project 2 Introduction Starbucks was established in Seattle, Washington on March 31, 1971, by three students who attended the University of San Francisco. Jerry Baldwin, Zev Siegl, and Gordan Bowker that was inspired to sell high quality coffee beans and coffee equipment. It was Alfred Pett who taught these guys the style of roasting beans. When they open the Starbuck back then, it was a single store in the Seattle historic Pike Place Market a seller of packaged specialty coffees and had a free sample of brewed coffee. Starbucks has expanded into a firm that is well known for its coffeehouses, where customers can buy beverages, food, and even packaged coffee. Starbucks didn’t start expanding until after Howard Schultz (Starbucks chairman and chief executive officer) bought into the store in 1987 to start his idea of having coffee bars like Italy has. Schultz was convinced that one day Starbuck would be in every neighborhood in America, which he focused on the growth of the company. Since then, Starbucks has seen expansion on the large scale in recent years, more than 27,000 in 2017. As of October, of this year, the United States, with a roughly over 13,930 locations and has the largest number of Starbucks stores in the world by far. International china has the second largest number of Starbucks stores that has about 2,937 locations. Starbucks has the chain recorded its highest ever annual revenue of 22.3 billion U.S. dollars, up from a mere four billion back in 2003. With the statics showed, Starbucks operations in the United States and several different countries has expanded to the success of their growth in the corporation. Entry Mode of Starbucks expanding into China Expanding in a business in the past years made big companies develop and think to expand their business outside their normal operations in the U.S. They began to realize a limited growth in the market and to compete against other growing business this leads to think about going global BUS499 Capstone Project 3 market. Starbucks felt the same in United States and they began to expand their business in oversea market. So, a good entry mode strategy can decide how good a business can go overseas. An entry mode for entering or expanding in a foreign market is one is one of the most crucial strategic decisions that am international business has to decide. There are several factors influencing the entry modes in another key element for choosing an entry mode. Starbucks has developed an internationalization strategy to enable the company to open stores and franchises in countries across the globe. Market research is at the core of many of the market entry strategies Starbucks is employing. This entry mode will consider how it has strengthened Starbucks entry into china markets. Some internal factors that makes the firm to its entry mode. The bigger the firm is, the ability to control the business is higher. Since Starbucks did the market research to enable a deeper understanding of china markets, and the way the capitalism functions in the People’s Republic of China (PRC). China has a number of distinct regionally based markets, a factor that makes market research crucial to launching new stores and franchises in China. Starbucks knows that China is a culture of drinking tea, so they approach the culture by not advertising and promotions. They began by introducing Starbucks in high traffic and high visibility locations to bridge the gap between the tea drinking culture and the coffee drinking culture by putting beverages in Chinese stores that included tea based ingredients. The right way to entry foreign markets is licensing, contract manufacturing or a joint venture. Some external factors would be the sociocultural difference that can influence the movement of the business. China has some culture issues when a western business comes into their community. There are local government policies and the differences in china culture like northern china is very different from that of the east. So, Starbucks needed to have a partnership BUS499 Capstone Project on the global expansion. This would allow them to better understand the people and their cultural. To address this complexity of china market, Starbucks partnered with three regional partners as part of the expansion plans. In the north, Starbucks had a joint -venture with Beijing Mei Da coffee company. In the East, Starbucks linked up with Taiwan-based Uni-President. In the south, Starbucks worked with Hong Kong based Maxim’s Caterers. All three partners will bring different strengths and local expertly that will help Starbucks gain insights into the taste and preferences of the local China consumers. In the desired mode factor, Starbucks mainly favors joint venture so they still have a say in the store business. Reasons why they went this route so they can have a share with the risk, have control of the market with resource commitment, and its adaptation and standardization strategy to the local market. In the transaction specific factors, Starbucks had partnership with joint ventures to allow a bond between their culture and Starbucks value of bringing a place where people can gather and gave people in the cities a “third space” beyond work and home making it cool to have a lathe and hang out. Going to Starbucks in China you will receive the same taste in coffee as you would in any Starbucks store but the taste in the food would be the local flavor. This is to fit with the culture relations that bonds the store with environment in that country. Starbucks believe in keeping management and employees from that region to build a good relationship with the customers. 4 BUS499 Capstone Project 5 Conclusion This Capstone report is to find out the different entry modes and marketing strategy used by Starbucks Firm in a expansion to China. The factors of internal and external were to inform us the impact on Starbucks entry mode decision. Starbucks international expansion successfully developed and it is important to decide the way of doing the expansion into a new market as it impact a long-term business agreement in this foreign country. Important key to know is that when you enter into a new market for any company in a foreign country. The selection of entry modes and marketing strategy is very important. BUS499 Capstone Project 6 References Can Starbucks Make China Love Joe By: Beattie, Anita Chang. Advertising Age. 11/5/2012, Vol. 83 Issue 40, p1-1. 1p https//opentoexport.com/article/10-things-to-consider-before http://www.coffee.org/History-of-Starbucks https://seekingalpha.com/article/4102227-starbucks-risky-bull-chinas-shops http://web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=18&sid=822298da-bcda-478d-9a628e25c56eec84%40sessionmgr4010

Tutor Answer

benwamonicah
School: Rice University

Attached.

Running head: STARBUCKS CORPORATION

Starbucks Corporation
Name:
Institution Affiliation:
Date:

1

STARBUCKS CORPORATION

2
Starbucks Corporation

Introduction
Innovation and success in business are achieved through venturing into different
opportunities which unfolds in the market. The application of marketing strategies is important
for such ventures due to the aspect of competition and making the product known to the target
consumers. The local markets are easier to perform and operate compared to the international
environments. Therefore, it is expected that the new companies should first get proper
establishment in their native countries before engaging in the international arena where they
require a lot of time and capital to operate. Different factors can help in successfully establishing
a new environment and becoming the main player depending on how the marketing strategies are
handled.
Starbucks is an investment whose origin is the American market. As China’s chief
marketing strategist explains, the company is a reformed and rebranded McDonald’s which had
also been given the name KFC in previous times. This firm is known for its involvement in highquality tea and coffee products which have held a firm record since its invention. The current
coverage for this firm is more than 64 countries where the products have been fully accepted and
the market is booming. This success also accounts for the 21,500 or more store...

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