Starbucks

Entry Strategy

            A company like Starbucks that has ventured to enter overseas markets must have a clear business strategy. In general, there are four business strategies that companies can adopt in expanding internationally – international business strategy, multinational business strategy, global business strategy and transnational business strategy. These strategies will be discussed. The philosophy behind an international strategy is establishing operations internationally as an extension of the domestic operations. The firm focuses on its domestic operations and uses its international operations to contribute to the success of the domestic operations. The domestic market is still viewed as the primary market. The multinational company, on the other hand, recognizes the importance of overseas markets and makes a greater commitment than an international company by considering local market characteristics. Multinational companies consider its international operations as equally profitable as its domestic operations. Because of this, multinational companies invest heavily on the development of its operations abroad. The needs and demands of international markets are taken into consideration as well as the characteristics of the markets. The primary strategy of multinational companies is to establish subsidiaries sensitive to each national market. A company that adopted a global business strategy puts emphasis on production efficiency rather than responsiveness to the local market. This type of company exploits the scale economy advantages by making and selling products worldwide. To achieve worldwide efficiency, a global company sets up its production facilities in selected countries and distributes its products across countries. The underlying assumption of the global company is that worldwide consumer demand is similar, and therefore there is no need to modify its products country by country. Lastly, a transnational company combines both the...