Starbucks - International Business Essay Example | Topics and Well Written Essays - 3500 words

Starbucks - International Business - Essay Example Although, previous researchers like Roby (2011) conducted research on international expansion strategy of Starbucks but these researcher focused more on marketing aspects of international expansion strategy of iconic coffee retailer but strategic dimensions of Starbuck’s international expansion remain scarcely discussed by scholars. In order to fulfil scarcity of research regarding strategic dimensions of Starbucks international expansion, this essay will try to shed light on pertinent issues regarding international expansion of Starbucks. Key objective of this paper will be to answer three questions, 1- how internal resources capabilities are supporting Starbucks to achieve success internationally, 2- how Starbucks has addressed challenges during international expansion and 3- what are the strategic initiatives that are taken by Starbucks to achieve success while expanding business internationally. In such context, business background Starbucks will be discussed in order to d evelop background for strategic analysis. Back Ground Analysis: Business Matrix of Starbucks Starbucks Corporation was established by Zev Siegl, Gordon Bowker and Jerry Baldwin during the year 1971 and the company is headquartered at Seattle, Washington, U.S (Starbucks, 2012). The company started its operation through opening single store in Pike Place Market of Seattle while in the next 42 years; Starbucks Corporation has expanded its operation over 61 countries (Starbucks, 2012). According to annual report published by Starbucks Corporation for the financial year ended 31st December, 2012, the company maintains distribution channel containing more than 10,000 stores (including licensed and owned stores) within USA and more than 20,000 stores across the world (including licensed and owned stores). Starbucks Corporation specializes in offering various coffee drinks, beverages, different types of hot drinks, side dishes, salads etc (Starbucks, 2012). Market capitalization Starbucks c lose to US$38 billion while sales revenue of the company hovering over US$ 12 billion. Starbucks Corporation faces competition from not only same segment players but also from competitors who offer cross segment products. For example, Starbucks offer similar kind of offering as Dunkin' Brands, Green mountain coffee while in domestic and international market; Starbucks Corporation faces intense competition from cross segment players like Nestle, McDonalds, Kraft Food and Wendy's International. Why Starbucks has been so successful to penetrate in distant markets while its competitors are gasping for maintain margin product differentiation equilibrium? Lee (2010) pointed out that competitive advantage for Starbucks lies on its ability to customize its product portfolio and service mix in accordance with the macro environmental requirements. Lee (2010) identified three strategic moves that have helped Starbucks Corporation to achieve success in international market such as, 1- establish ing licensing and partnership with distribution partners that can reduce dimensions of risks and contingency factors associated with expansion in international context, 2- differentiating in terms of product portfolio and service customization as per socio-cultural divergence in international countries and 3- customizing its integrated marketing communication as per socio-cultural divergence in international countries. In such context, Boston Matrix of Starbucks product portfolio