Answer no: 1

The markets are totally different in countries like United States and in developing
countries. There is high purchasing power in developed countries but less
purchasing power in developing countries. Therefore, if Starbucks want to enter in
these emerging markets, they need to put prices low to increase the sales. In
addition, there are also benefits of entering in emerging markets. There is low
competition, so the entry can be easily made. Then, there is cost benefits, for
example employees can be hired in low wages and the other expense of opening
stores or purchasing place for stores are also less, so it will help in price reduction.