1. The two different market expansion strategies (company owned ventures or licensees, including partnerships) exemplified by Starbucks could be attributed to decisions that integrate the level of perceived involvement and risks, as well as forecasted financial rewards. According to case facts, in the domestic market, two thirds of Starbucks outlets are company owned; while only one third of the outlets are run by licenses. The reverse pattern was apparently evident in outlets outside of the United States. The rationale could be explained in terms of the need for Starbucks to rely on partnerships and licenses in the international markets due to the unfamiliarity to the business environment and the need to adapt to the preferences of the people where these new branches were eventually established. With partnership, Starbucks is able to capitalize on the expertise of the partner in the local market. As emphasized, “as Kathy Lindemann, SVP of Operations for Starbucks International, describes it: Our approach to international expansion is to focus on the partnership first, country second. We rely on the local connection to get everything up and working. The key is finding the right local partners to negotiate local regulations and other issues” .
2. One strongly agrees with the decision that products need to adapt and adjust to the demands of the times. In response to the economic downturn, Starbucks has recognized and acknowledged that consumers were more aware of value for their money and were more cost sensitive. As such, the company’s decision to launch VIA Ready Brew and breakfast value meal that were cheaper
Work Cited
Kotha, Suresh and Debra Glassman. "Starbucks Corporation: Competing in a Global Market." 7 April 2003. UW Business School. http://www.foster.washington.edu/centers/gbc/globalbusinesscasecompetition/documents/cases/2003case.pdf. 10 March 2014.
