 What is the international strategy of the company?

Starbucks International Strategy:

As of 2020, there are 33,833 Starbucks stores all over the globe, serving more than 100
million customers. Starbucks has pursued a global expansion strategy to establish its
presence in various international markets. The company's international strategy can be
characterized by several key elements:
1. Market Entry:
- Starbucks has employed various entry modes, including joint ventures, licensing, and
wholly-owned subsidiaries, depending on the market conditions. For example, in China,
Starbucks formed a partnership with local companies to navigate cultural nuances and
regulatory challenges. In Japan, Starbucks set up a joint venture with Sazaby League Ltd - a
local designer and retailer of handbags, clothing, and accessories which also operates
restaurants and coffee shops under the name Afternoon Tea. In India, it entered into a JV
with TATA enterprise to help them with infrastructure, logistics, and taste-palette.

2. Adaptation to Local Culture:

- Starbucks adapts its menu and store ambiance to suit local tastes and preferences. For
instance, in Asia, Starbucks has introduced drinks and snacks tailored to local flavors, such as
matcha-based beverages in Japan or mooncakes during the Mid-Autumn Festival in China.
3. Store Expansion:
- Starbucks has aggressively expanded its store network globally. The company focuses on
prime locations in major cities and high-traffic areas. For instance, as of my last update,
China has been a significant focus for Starbucks, with plans to open thousands of new stores
in the country.
4. Pricing Strategy:
- Starbucks employs a global value-based pricing strategy, focusing on the perceived value
by customers rather than production costs. Targeting middle to upper social classes, the
company maximizes income, builds a premium brand image, and differentiates itself from
competitors. Prices vary globally due to factors such as spending power, tariffs, exchange
rates, local market needs, and competition. Starbucks adapts pricing to local conditions
while maintaining a consistent global brand image.
Price of the same Starbucks coffee in different parts of the world (in £ equivalent):

Country Cappuccino Americano Latte

Bern, Switzerland £ 4.58 £ 4.27 £ 4.58
Paris, France £ 3.39 £ 2.53 £ 3.39
New York, US £ 2.69 £ 2.03 £ 2.69
London, UK £ 2.45 £ 2.20 £ 2.45
Bangkok, Thailand £ 2.37 £ 2.17 £ 2.40
5. Digital Innovation:
- Starbucks has been at the forefront of digital innovation globally. The company's mobile
app and loyalty program have been successful in various markets, enhancing customer
engagement and driving sales. Digital initiatives like mobile ordering and payment have been
particularly successful in markets with a high smartphone penetration.
6. Corporate Social Responsibility (CSR):
- Starbucks has incorporated CSR initiatives into its global strategy. The company
emphasizes ethical sourcing of coffee beans and environmental sustainability. This approach
resonates with consumers globally, aligning with the growing importance of sustainability in
consumer preferences.

 What, where, how and why does the company internationalized?

What: Starbucks Internationalization
Starbucks internationalized its operations by expanding its coffeehouse chain globally. The
company's core offering includes a diverse range of high-quality coffee beverages, snacks,
and a distinctive café experience.
Where: Global Expansion Strategy
Starbucks has pursued internationalization in various countries and regions worldwide. Key
markets include the United States, China, Europe, and other parts of Asia and the Middle
East. The company strategically selects prime locations in major cities and high-traffic areas
for its stores.
How: Market Entry Modes and Adaptation
Starbucks adopted different market entry modes, including joint ventures, licensing, and
wholly-owned subsidiaries. The company adapts its strategies to local conditions,
customizing menus and store ambiance to align with cultural preferences. Digital innovation,
such as mobile apps and loyalty programs, has played a crucial role in enhancing the
customer experience globally.
Why: Motivations for Internationalization
Several factors motivate Starbucks' internationalization:
1. Market Growth: Seeking new markets for sustained growth beyond saturated domestic
markets.
2. Brand Globalization: Building a global brand and presence to capitalize on the popularity
of the Starbucks experience.
3. Diversification: Spreading business risks by operating in diverse geographic regions.
4. Economies of Scale: Leveraging economies of scale in purchasing, production, and
distribution on a global scale.
5. Cultural Exchange: Embracing cultural diversity and fostering a sense of community
through the global coffeehouse culture.
In summary, Starbucks internationalized by taking its coffeehouse concept worldwide,
employing various market entry modes, adapting to local preferences, and pursuing
international expansion to achieve growth, diversification, and brand globalization.

 References
1. Statista, Number of Starbucks stores worldwide from 2003 to 2021, 2021.
2. Lars de Bruin, International Business Strategy, 2017.
3. Christine Nyandat, Starbucks International Strategy, 2019.
4. Starbucks Stories & News, Starbucks Poised for Continued Growth in Japan Through Full
Ownership of Market, 2014.
5. MBA Knowledge Base, Case Study on Marketing Strategy: Starbucks Entry to China, n.d.
6. Abhiyash Jain, Starbucks prices products on value not Cost. Why, 2020.
7. https://stories.starbucks.com/press/2022/starbucks-enters-new-era-of-growth-driven-by-
an-unparalleled-reinvention-plan/