Ch. 8 Looking at International Strategies

Chapter 8 of our text helps us to understand how and why businesses decide to expand internationally. As highlighted in the previous chapter, expansion can create economies of scale and market growth. However, simply adopting a new market will not necessarily result in these benefits. A firm must take into account all of the attributes that create cultural, administrative, geographic, and economic distances in a new market when deciding where to invest, identify the best vehicle, such as creating a franchise or pursuing a joint venture, for entering the market, and sculpt how locally responsive it must be to operate profitably in that region.

From the Starbucks website: 
"With more than 5,500 coffeehouses in over 50 countries, it’s clear that our passion for great coffee, genuine service and community connection transcends language and culture.

We knew we were onto something when we decided to open our first international coffeehouse in Tokyo back in 1996. The response was extraordinary, and to this day we’re still amazed by how warmly our coffeeshops have been embraced by millions of people around the world."

Global expansion has and continues to be an important part of Starbucks' growth and financial success. An interesting article by CNBC.com contributor Shaun Rein describes how Starbucks' has been able to achieve success in its Chinese stores, citing its strategic moves to "adapt to consumer wants and promote dine-in service." Rein explains, "Starbucks adapted its business model specifically for the Chinese, rather than trying to transplant everything that worked in America into China." This represents a locally-responsive approach that has allowed the company to grow as a whole.

International expansion is integrated into Starbucks' future plans for growth. MSN Money writes, "The company aims to open 800 net new stores in its fiscal year ending Sept. 30. Half of those stores will be in the Americas -- and half of those will be licensed stores in places like Target and shopping malls. About 300 of the new stores will be in China and Asia Pacific, and 100 will be in Europe, the Middle east, Russia and Africa." 

While on the topic of Starbucks and its presence around the world, I'd like to close out this entry with an opportunity for my readers to view some of Starbucks' exciting locations around the world and their unique designs-- you'll find a slide show of the "Coolest Starbucks around the world" here.

Update as of 6/26/13: Starbucks announces the opening of 100 new stores in Malaysia over the next four years.

Edit: The Starbucks Company Timeline shows Starbucks international expansion over time.