Expert answer:Starbucks Capstone Project

Expert answer: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 choiceMode of entryIn 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.
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BUS499 Capstone Project
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Starbucks Capstone Project
Tracy Hunt
BUS499 Business Policy and Strategy
December 12, 2017
BUS499 Capstone Project
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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
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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.
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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.
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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
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