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Starbucks Case

Starbucks Case

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Published by neolk

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Categories:Business/Law
Published by: neolk on Oct 28, 2009
Copyright:Attribution Non-commercial

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12/02/2012

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Q3(a):
What are the advantages of a joint-venture entry mode forStarbucks over entering throughwholly owned subsidiaries?
Answer:
Starbucks can benefit from local partner’s knowledge of thehost country’s competitive conditions, culture, language, political and business systems.
Starbucks can share potentially high development costs andrisks with local partner.
Joint-ventures face low risk of being subject tonationalization or other forms of adverse governmentinterference.
 
Q3 (b): On occasion, Starbucks has chosen awholly owned subsidiary to control its foreignexpansion (e.g., in Britain & Thailand). Why?
Gain tighter control over expansion strategies
Reduce risk of losing core competencies
Maintain tight control over operations in different countries – necessary for engaging in global strategic coordination
Firm has a 100% share in the profits

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