Monday, November 19, 2007
Planet Starbucks - Nerrisa Pareja
2. Using the global strategy framework I would classify Starbucks as pursing a localization strategy. The reason being is the fact that Starbucks is customizing its products to match the tastes and preferences of different national markets. For example, to cater to local tastes in Taiwan and Japan Starbucks came out with a "green tea frappuccino" and it is now the largest selling frappucino. In addition, in places over seas such as Japan, China, and the UK far more of what is ordered is eaten on premises therefore, Starbucks offers more seating and porcelain cups in their overseas retailers. This gives them a chance to linger and have their purchased items on Starbuck's premises. In America however, it opposite because people are more inclined to order to go. The book stated that 86 percent of the item order are taken in paper cups. I think that this is the correct strategy for Starbucks because they are adapting to their surroundings and they have succeeded in international markets.
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2 comments:
Mike Dombrowksi
Question #3
Starbucks has used joint ventures with local companies in order to enter foreign markets for one main reason. The main reason for participating in these joint ventures is because this way Starbucks has an in and it is like they have experience already in that market. By joining with a company that is already there, all they are really doing is putting their name there and having the other company, who knows all the tastes and culture there, adapt their brand and company to that specific market. Starbucks goes to another company in a foreign market and uses those foreign managers because they already know that market. All Starbucks has to do is supply the name and the setup, the local managers do the rest to help with how to cater to that specific foreign market.
Starbucks strategy of expanding overseas created a large value for the companies shareholders. In spreading their company overseas and having more stores, the company is going to make more money, in turn making more money for their shareholders. Also usually, overall doing business overseas instead of America costs less. So then Starbucks would be have all these stores that cost less and still would be making their same profits.
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