entry of the business and to make the costumers feel comfortable with theservice (because it is established in their country and identified with theirfeelings and customer demands).
3. What are the advantages of a joint-venture entry mode forStarbucks over entering through wholly owned subsidiaries?
-The risks associated with learning to do business in a new culture are less if the firm acquires an established host-country enterprise.-Starbucks benefits from a local partner’s knowledge of the host country’scompetitive conditions, culture, language and political systems.-A joint venture makes a good combination: it provides not onlymanagement know-how, but also marketing expertise and the necessarylocal knowledge for competing in the foreign country.-Although Starbucks is a very rich enterprise, it is always important to saveexpenses, so the best strategy for Starbucks is to create a joint venturewhere the other joint owner has the responsibility to share costs, risks andwork together in the “fight” against the competition.
On occasion, Starbucks has chosen a wholly owned subsidiaryto control its foreign expansion (e.g., in Britain and Thailand).Why?
Because Starbucks felt those specific joint ventures would not be able toachieve the company’s aggressive growth targets.Starbucks has been always interested to create joint venturearrangement where both join owners are able to invest in the venture,so when Starbucks noticed Thailand and Britain did not relied withenough resources for opening at least 20 Starbucks coffee stores inthose countries (respectively) within five years: it decided to acquired