APPROVAL OF EXPANSION PLANS TO EAST AFRICAN MARKETS BY THE SHAREHOLDERS
Starbucks Corporation was incorporated on 30 March, 1971. It had its first stores in Seattle, Washington. From the humble beginning of one store, the company has now expanded to 62 countries with over 20,891 stores. Though the company management of the company has to operate the multinational as a small company, the company has been able to grow strength to strength to become a leading global coffee house.
The company has presences in all the continents, but its presences in the African market it is yet to be felt. It only operates in two countries i.e. Morocco and Egypt.
The company has done a comprehensive feasibility study in the eastern African markets and found the markets viable for expansion and operates in, since the market is untapped by any ready coffee company. It is a ready market with over 200 million population that is eager for hot coffee with African touch. The east African countries are the leading producers of coffee and tea in Africa, but it is yet to get a reliable market for tea and coffee. The infrastructures are in good condition, and the security services are the best in Africa. There are also many universities that are recognized for producing professionals in various fields.
Therefore, the company is requesting for approval from the board of shareholders to expand to this market since it will be cheaper to operate in the market because the raw materials (coffee) are available and the labor is cheap since the average wage per month is US$ 200. There is ample security hence the facilities of the company will be safe from any theft or vandalism of its property. The market promises 30% profit and 80% control of the market within the first two years of operations. This is a great opportunity to be ignored. Thank you.
References
Luo, Y. (1999). Entry and cooperative strategies in international business expansion. Westport, Conn: Quorum.
