Within this type of modes, that is also the reason why companies need to find the best fit mode for the strategy that they need to apply. And these issues and other key areas that need to be studied carefully in order to find the best fit are: Commitment and level of involvement in international business Technology issues Product type and product adaptation Product weight and size After sales service consideration And, cost of market entry With these key areas, it will give the company a better deal on what best fit mode of management and equity will be effectively be applied.
(Alexandrides, C. G. & Bowers, B 2005). Starbucks – Focus Case on Investigating the Company’s Market Entry Strategies Starbucks is one of the well known and respected company is serving only the finest Coffee in the world. The company was originated in Seattle USA at Spike Place market where it first establish its first coffee business in 1971. But, it was by the time when the company’s main leader Howard Shultz joins the company in 1982, that made the company progress.
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(The Company, n. d. ). With the growing change in the people’s lifestyle these days, the company has created a multiple strategy that mainly focuses on lifestyle. This was also been the strategy for most fast food chain and what they did was to follow the trend and developed some strategy that would attract different lifestyle and with different type of customers around the world. Like in China alone as one of the company’s toughest market, since the country preferred tea than any other drinks.
They started to hook its customers through a very intensive marketing strategy like though commercials and advertisements on some of the most popular TV sitcoms. This has helped the company to gain much market since most of its market is students and high class customers. Also a strategy through recommendations from known figures in both the industry and the public sector have made a big impact as well and has helped the company to attract more and more customers. (Emling, S 2004).
And as the company initially established better status in China in particular, it even penetrate the market by researching how they can really attract the market by doing more than just simple marketing and thee maybe as simple as giving free candies and CD’s for their customers, still it generates better result and has continuous to do that until customers would really be eager to go the stores not only for the freebies but now because of the quality of coffee that they enjoyed at Starbucks. (Bolt, K. M 005). Strategic Alliances
One of the best strategies that can be seen to Starbucks is the way the company effectively do partnership with other company. Starbucks as a well known company easily creates alliances with other company which for them is also a great opportunity working with the company. One of the biggest partnerships was with Bon appetite Group, and other big local companies in Switzerland and in the Middle East. Actually the strategy is plain and simple; they form partnership with them, by installing a coffee shop within these companies.
From there on as the customers will increase, partners will also jointly plan for expansion or adding more branch to operate. (Starbucks Announces Entry to Continental Europe 2000). Company Acquisitions In terms of acquisitions, just like other company the strategy starts with finding the weakness of its competitors and at the same time for Starbucks, it is a never ending improvement and development of new strategy in order to keep their business in the highest level.
From that point as they already have dominated the market and its competitor knows that if they continue it will just be a losing business, then that is the time even their competitors would itself sell its business to them. This is what happens in 1998, when the company acquired Seattle Coffee Company. And since the company shared the same culture, the company was not that difficult to re-launch its business and serve the same customers that only have love to coffee.
That is why in the global scene it was easily been adopted by Starbucks and Seattle Coffee most specially they know that it is only one owner that runs the companies. (Starbucks in the UK n. d. ). Direct Investment Just like other company as well, when it comes to investment they only do have it only for those that is very important for the company and for Starbucks, it is only coffee. One of its important investments was with regards to green coffee.
As the start of healthy living starting to affect global business these days, they have invested a lot of money of introducing green coffee. This has helped the company a lot most specially in the health conscious market like China. With the green tea introduction, it has been a big impact and has created a new dimension and an added market value for the company. In other words, the strategy is simple, it is for the company to find latest trends in products and services that will help not only the company to grow but also attend to the needs of their loyal customers.
(Starbucks promotes green beans 2002). Franchising In terms of franchising, the company has proven that quality is the most important and they will continue to do that for the sake of retaining its quality for its customers. But, the company manage to have some management assistance to selective countries that they know that quality will still be performed, like mostly in Japan, where the company knows that the company will still performed the best quality. But over-all the company does not provide franchising. Key Findings
As the success continues to happen for the company based from the strategies that was applied. As based from the reports in 2007 and 2008 which has provided these figures: cconsolidated net revenues of $2. 8 billion, a 17 percent which has an increase from Q1 of 2007. An operating margin contracted 160 basis points to 12. 0 percent with earnings per share of $0. 28, compared to $0. 26 per share in Q1 of 2007. This only shows that with the strategies that have been implemented these figures happened. (See Figure 1, 2 and 3).