Starbucks Coffee Company

TUI

John Dude

Module 2 Case Assignment

Bus 401- International Business

Dr. ?????

December 10, 2010

Starbucks

Starbucks’ global expansion strategy in China made Starbucks’ China a formidable force in the global market. Starbucks entered into the Chinese market using the first comer advantage in coffee cafe market. In the early 1999, when Starbucks entered the Chinese market, they could not wholly own their store chain. In recent years Starbucks chairman [1 - Wall Street Journal, New York, N.Y.; February 14, 2006], Howard Schultz stated that, “In the past four or five years, Starbucks has been active in purchasing local equity back from partners in China.” This decision stands to provide positive income with little to no payout. All revenue stays in the Starbucks’ franchise which is growing every fiscal year. They were able to capitalize their local equity because China entered the World Trade Organization. Starbucks’ current business strategy is joint ventures, licenses, and company-owned operations; currently, they do not allow franchising of their company.

Starbucks is a multinational company which succeeded in China, due in part to its decision making from Starbucks’ corporate staff. Some of these factors include: marketing, genuine coffee taste, unique advertising, product packaging, and excellent planning. Mr. Shultz ambitions, chairman of the coffee chain, which he labeled the single most important market outside North America, suggest many lesser; known cities in the country are quickly developing considerable spending power and Western drinking habits [2 - Financial Times. London: February 14, 2006].

Starbucks is dramatically growing in China; it means the Chinese government is allowing the Starbucks’ franchise to expand all over China. Thus, providing new job opportunities for local citizens. The more importantly, generating positive financial income for the country’s economical development. The Seattle based company announced it would...