International Management: Scope, Concepts, and Market Entry Strategies for Starbucks

This document provides an overview of international management and its importance for Starbucks. It discusses the scope and key concepts of international marketing and presents various routes to the international market for Starbucks. It also explores the key criteria and selection process considered by the company to enter new markets. Additionally, it examines different market entry strategies and their benefits and drawbacks. The document is relevant for students studying international management or marketing.

International Management

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Overview of the company......................................................................................................3
Scope and key concepts of international marketing...............................................................3
Describe various routes to international market for Starbucks..............................................4
Presenting key criteria and selection process considered by company to enter into
international market...............................................................................................................5
Market entry strategy.............................................................................................................6
CONCLUSION..........................................................................................................................8
Recommendations..................................................................................................................8
TASK 2......................................................................................................................................9
REFERENCES.........................................................................................................................10

INTRODUCTION
International management (IM) is refers to the management of a business operations
for a business that is used to operate business at global level. In the same way, current study
will helps to highlights the importance of IM in the context of Starbuck. The chosen business
is deal in food and beverage industry, who is operating at global level. The present study will
analyze the scope and key concepts of international marketing and provide reason for
choosing the company along with various routes to market they can adopt. Further, it evaluate
the key criteria and selection process which can be considered in order to enter into new
market. Report will also explain different market entry strategies along with its benefits and
drawbacks.
Overview of the company
Starbucks is an American multinational chain of coffee house whose headquarter is in
Washington, US. The quoted company operates internationally and currently it has more than
30 thousands location at worldwide in 70 different countries. This reflects that business has a
strong presence in the international market along with high customer base. It also has more
than 3 lac 40 thousand employees who assist company to meet its set vision and mission.
According to Watson IV and et.al., (2018) international market is defined as any
geographical region where a company conducts business outside of its territorial boundaries.
This in turn assists a business to boost the brand reputation and helps to connect with new
customers as well. On the other side, Ahi and et.al., (2017) shared their views in the context
of international market, that it is a trade in which company select different countries in order
to sustain the brand image and develop networks with an aim to improve its revenue. For
example, Starbuck is also performing internationally in which it operates at different
countries with an aim to increase loyalty and enhanced reputation at global market.
Scope and key concepts of international marketing
International marketing is the process through which a company communicate,
deliver and exchange offerings for customers, clients at global level. Thus, it is an activity
which is related to scale of goods and service of one country in other. The rationale for
choosing Starbuck as a company is such that it is one of the growing firm at global level and
also, it is planning to expand its operation in Estonia, the Baltic States through different
marketing strategies.

Key concepts:
 Global marketing: It is all about offering products at different country from local
areas.
 Globalization: Another concept of international marketing, in which business carry
out its operation at global level by considering external factors.
 International market: This concept assists business to create global recognition and
in this, company may use export and import to serve at global level (Sozinova, 2018).
 Export marketing: In this, company trade business at different country through
transportation.
Scope:
Through international marketing, company provides an opportunity for different
nations to get closer to each other which in turn assist to understand the importance of culture
and also reduce cost of production. International marketing can be done through Joint venture
in which two brand come under single chain to establish a brand image (Gomes, Sousa and
Vendrell-Herrero, 2020). For example, Vodafone and Telefonica applied this method to enter
into new market. Apart from this, international marketing of a business also helps in
importing and exporting a business in order to derived best output.
Describe various routes to international market for Starbucks
In order to enter into new market, there are various international marketing strategy
which can be adopted by company. Some of them are as mentioned below:
Exporting and Importing: One of the most common method to enter into new market
which have lower risk. It is also cost effective method because of involving low number of
parties such that importer, transporter, government. Therefore, it is analyzed that it is the
simplest method which required low cost along with low marketing expenses (How to enter a
foreign market, 2020). Whereas, importing is all about the process of bringing goods from
one country for a purpose of reselling into another country. This is possible when company is
dealing at retain industry only because there is no risk of defects.
Franchising: It is somehow similar to licensing method. In this intellectual property
rights are sold to franchisee, but there is a control of franchiser over a business. Therefore, it
is a type of marketing in which owner (franchisor) grants to an individual (franchisee) the

right to run a business or sell products by using IP. In this, company did not have to start
from scratch and this in turn helps to gain revenue as well.
Joint venture: The trendy method to enter into international market in which two
companies established a business jointly. In this, one of the owner is local whereas another
belongs to foreign. Therefore, getting ideas from, new business will established along with
effective management team where profit and shares are control by both parties.
Among all routes, it is suggested to Starbucks to use Franchising in which it has to
perform detailed market study in order to selected franchisor. In this, quoted company do not
have to invest high amount within a new business and they also get advice to run a business
in prominent way (Patsiaouras, 2019). Therefore, it can be stated that chosen route helps a
business to come with a ready-made business plan and this is less risky method as compared
to other. It is chosen over exporting and importing because beverages and food cannot be sell
through transportation.
Presenting key criteria and selection process considered by company to enter into
international market
There are three main criteria which can be considered by Starbucks in order to enter
into Estonia. Such that:
 Market analysis: In order to enter into new market, company has to identify the
GDP, political and economic factors of a country. This in turn helps to examine the
feasibility of company’s expansion (Li, Liu and Bustinza, 2019).
 Distribution channels: This assists to determine how company expands in market
such that Starbucks may use internet to sell the products and through local distributor
it can start its new business. Demand analysis: The demand of beverage is high in Estonia such that there are
small business who operated in this industry (Bruyaka and Prange, 2020). Therefore,
expanding the business in chosen country will be more beneficial for the company in
order to establish new brand image.
Selection process:
Marketing objectives: The main objective of Starbucks is to expand its business
operation at each and every country with an aim to offer high quality of products to their

customers. Thus, to achieve the same, it is necessary to conduct a country selection process to
examine the best out of many.
Parameter for selection: For proper evaluation, company considered different
parameters such that resources (company have effective human, financial and technological
resource), market stable situation, government policy is also stable etc.
Preliminary screening: To meet the defined aim, Starbucks should eliminate the
market which are not potential (Panwar and Malhotra, 2018). For the same, different factors
are considered such that political (Estonia has a stable political situation), income (country
have medium and upper class people).
Evaluation and selection: In this, market is further evaluated by Estonia that helps to
examine the attractiveness. Therefore, Starbucks is also perform internal and external
environmental audit in order to evaluate the selected country’s performance.
Final selection: In this, company made a final decision where all the parameters were
considered that helps to make better decision for a company. Therefore, in this stage,
company also launch a product on trial basis in order to identify whether the products is
affordable by customers or not (Del Giudice and et.al., 2017). Hence, it will help to evaluate
the decision on the basis of different parameters.
Market entry strategy
A market entry strategy refers to the channel of distribution that are used by the
company to successfully deliver its goods and services in the target market. It can be in
reference to the domestic as well as international markets where the potential customer of the
products of Starbucks are present. With the growing trend of globalization, these strategies
facilitate the expansion program in the global markets by establishing the market presence for
the company and its products.
Some of the major market entry strategies are: -
Licensing- It is a type of market entry strategy that can be used by the companies to enter the
markets across borders. This can be done by providing the rights to use the intellectual
property of the licensor for a period of time that it has granted permission (Hollender, Zapkau
and Schwens, 2017). In this the licensee company who gets the permission can use the
trademark or copyright protected products, processes and technology of the company. In

return for this the licensor pre-decided fees or royalty payments as per the terms of the
contract.
Advantages
• The licensor company can expand its operations in restricted foreign markets and
boost their profitability.
• In order to enter new market, it does not have to carry out much research as the
licensee company belongs to the local market and already possesses the required
knowledge.
• The major advantage is that the company does not need much finance to plan the
expansions.
Disadvantages
• The contract has to be formed with due diligence and need to be enforced by the
licensor company.
• This might leak the necessary information of the licensor company and can benefit the
competitors in the industry.
Exporting- Exporting is a way to enter the foreign markets in an easy and convenient manner
which is by delivering the goods to the global countries. This is the cost-effective way of
expansion where not much marketing is required by the company (Ahi and et.al., 2017).
Advantages
• Helps the company in achieving economies of scale and reduced per unit of cost to
improve the profitability of the company.
• Marketing strategies are not required to be designed.
Disadvantages
• The various export duties and taxes can levy high burden on the operational costs of
the company.
• Also the export regulations have to met and also stay updated with the changing ones.
• It does not help with targeting the specific markets of customers or focusing on the
niche market.
Joint ventures- This is also a major entry strategy in which the two existing companies are
combined together to form a third independent company. It is a kind of partnership where the
risk and the returns shall be shared (Tulung, 2017).

Advantages
• It provides the benefit of synergy.
• Reduces the amount of market research as one of the companies is well aware of the
local market.
Disadvantages
• Clash of the cultural diversity in both the company’s working environment.
• Flexibility of operations are restricted.
Starbucks has been entering in the foreign markets with the help of joint ventures or creating
wholly-owned subsidiaries in the market. This shall help the company in acquiring expertise
in the foreign market through the knowledge of local market that is held with the local
company. Expansions can be successfully planned in less costs.
CONCLUSION
By summing up above report it has been concluded that international marketing is a
broad concept that helps a business to run effectually in other countries. The section also
summarized that there are different concepts of international marketing such as globalization,
global marketing, international market etc. Further, franchising as an international route has
been adopted by Starbucks in order to operate at Estonia. Also, there are different key criteria
and process which can be used by company to enter in new market.
Recommendations
 It is to be recommended to the company to use franchising as a market entry mode in
which different marketing tools must be evaluated that helps to enter into market. In
this, Starbucks may use social media in order to promote the business at global level.
 Further it is also suggested to the company that company must conduct the market
research in which all external and internal factors should be considered. This in turn
helps to examine whether the chosen country helps a company to derived best output.
 On the other side, it is also recommended to the company that it can used Joint
venture as a market entry method in order to generate better revenue. This method is

little risky as compared to franchising because all the profit and losses are bear by
both parties, chances of brand successfulness is less.
TASK 2
Enclosed in PPT

REFERENCES
Books and Journals
Ahi, A. and et.al., 2017. International market entry: how do small and medium-sized
enterprises make decisions?. Journal of International Marketing. 25(1). pp.1-21.
Ahi, A. and et.al.,2017. International market entry: how do small and medium-sized
enterprises make decisions?. Journal of International Marketing. 25(1). pp.1-21.
Bruyaka, O. and Prange, C., 2020. International cultural ambidexterity: Balancing tensions of
foreign market entry into distant and proximate cultures. Journal of Business
Research. 118. pp.491-506.
Del Giudice, M. and et.al., 2017. Influences of cognitive dimensions on the collaborative
entry mode choice of small-and medium-sized enterprises. International Marketing
Review.
Gomes, E., Sousa, C. M. and Vendrell-Herrero, F., 2020. International marketing agility:
conceptualization and research agenda. International Marketing Review.
Hollender, L., Zapkau, F. B. and Schwens, C., 2017. SME foreign market entry mode choice
and foreign venture performance: The moderating effect of international experience
and product adaptation. International Business Review. 26(2). pp.250-263.
Li, R., Liu, Y. and Bustinza, O. F., 2019. FDI, service intensity, and international marketing
agility. International Marketing Review.
Panwar, A. and Malhotra, A. K., 2018. A study on entry methods in international market for
service sector based Indian public sector undertakings. SMART Journal of Business
Management Studies. 14(1). pp.69-81.
Patsiaouras, G., 2019. Marketing concepts can have a life of their own: Representation and
pluralism in marketing concept analysis. Marketing Theory. 19(4). pp.559-566.
Sozinova, A. A., 2018. Marketing concept of managing the reorganization of entrepreneurial
structures using the latest information technologies. Quality-Access to
Success. 19(S2). pp.118-122.

Tulung, J. E., 2017. Resource availability and firm’s international strategy as key
determinants of entry mode choice. Jurnal Aplikasi Manajemen. 15(1). pp.160-168.
Watson IV, G.F. and et.al., 2018. International market entry strategies: Relational, digital,
and hybrid approaches. Journal of International Marketing. 26(1). pp.30-60.
Online
How to enter a foreign market. 2020. [Online]. Available through:
<https://www.workspace.co.uk/content-hub/growth-and-strategy/how-to-enter-a-
foreign-market>.