International Business: Expansion of Starbucks in Japan

This report analyses the expansion of Starbucks in Japan, discussing the rationale for going international, country selection, academic theories/models related to international market selection and entry strategies, typical barriers faced by organisations expanding internationally, and a critical evaluation of implementation approach.

International Business

Table of Contents
INTRODUCTION ..........................................................................................................................5
TASK ..............................................................................................................................................5
Literature review.........................................................................................................................5
Provide a brief overview of the chosen organisation and the rationale for going international.
.....................................................................................................................................................6
Critically discuss which country you would recommend them to enter.....................................7
Demonstrate application of the relevant academic theory/models related to the process of
international market selection and entry strategies.....................................................................7
Discuss typical barriers that will be faced as the organisation expands internationally...........10
Based on your analysis, critically evaluate a relevant implementation approach for the
internationalisation process for the specified target market......................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

EXECUTIVE SUMMARY
The level of increasing or expanding business across the borders or beyond the
boundaries of a nation leads to conducting the business on an international level.
The availability of opportunities across the borders helps in expanding and
increasing the business on a global platform which allows the business to get
recognition on an international level. The expansion across the borders in business
with its increasing revenue allows the organisation to gain name, fame with
monetary benefit. The rise in growth of business thus boosts the confidence of the
authorities of the organisation. The most important factor in dealing with
international business is to consider the social, economic and geographical
conditions of the place. The coffee house chain of Starbucks will be analysed
considering its expansion in international market.

INTRODUCTION
The expansion or collaboration of an organisation across the borders, with intention of spreading
business on an international level refers to International Business. It is basically the expansion of
business of a particular organisation on a global platform where trade takes place between the
associations, organisations and regulations of the country. There will also be exchange of
currency, resources, culture and so on. The act of doing business on an international level
involves certain risks in relation to acceptance of their rules, policies, culture and economic
demands. International business also involves the combination of creative ideology in conducting
the business smoothly with innovative methods and ideologies for expanding the business
globally. It should mainly focuses on the demands and needs of the the consumers with the
changing culture(Szkudlarek and et. al., 2021). This expansion mainly helps in generating
revenue and increasing the value of the organisation and also raising the name and fame of the
organisation in business. The business is conducted by various increased and technological
methods in order to give it a global approach. International business also opens the doors for
various opportunities with profits and benefits by having friendly relations with other countries.
It also gives an international recognition to the organisation by increasing its value and
productivity across the borders. This report will cover the coffee chain of Starbucks in the
country of United Kingdom. It is an American company that is running successfully all over the
globe with its successful business in UK. The renowned coffee chain intends to expand its
business across the borders of Japan. The strategies and barriers involved in doing the business
with its models and theories will be covered in this report.
TASK
Literature review
According to John D. Daniels and Lee H. Radebaugh, International business is the transaction of
business between the private and government organisations between two countries. The
transaction of private business is mainly in consideration to profit in the business, whereas there
is no such condition of having profit in government organisation(Das, 2021). International
business involves the transactions of business activities on a global front by going beyond the
social, economic and geographical limits of the country. The activity of international business

not only includes the exchange of goods and services but also the exchange of intellectual
property rights along with the revenue of the international nation. It is opening the doors of
opportunities for large group of organisations by enabling the people to have access to different
cultures, which helps them in having the taste and knowledge of international nation in their own
place. The ability to have access to international products develops the growth of the country.
The exposure of various multi national companies across the borders helps in development of
international business.
Analysis and Discussion:-
Provide a brief overview of the chosen organisation and the rationale for going
international.
The company of Starbucks was founded by Jerry Baldwin, Zev Siegl and Gordon Bowker in the
year 1971. It has its headquarters in Washington, United States. It is mainly involved in the
business of serving beverages of Coffee, which has gained an international popularity all over
the globe(Posthuma, 2022). It specialises in crafting a perfect cup of coffee with different
varieties by perfectly roasting the coffee beans and freshly blending them on every order which
makes it stands out from other coffee chains of the world. They deliver highest quality of
services by considering the value of each and every customer. The highlighted part of this brand
is that it makes each and every customer feel special by in-scripting their names on the coffee
cup. The best part of this brand is also the quality of their coffee which has rich aroma taste of
actual coffee with qualitative added whipped cream and other products. Starbucks believes in
making customers its central focus by providing them a valuable and memorable experience. It
runs various stores in different countries all over the world by feeding millions of people. The
goal of the organisation is to serve the mankind with its well approached quality services. It
believes in laying a strong positive impact on the community by serving the humanity with its
commitment to provide the people one of the best experience in sipping a cup of coffee. They are
mainly committed in investing in the health of the customers by serving the people and making
their partners proud in collaborating with them. The company gained its reputation in the market
by serving its customers quality products that resulted in hike in the business of the organisation.
The organisation should focus on imposing reasonable prices so that the common people are able
to consume its products on a large level(Morales and et. al., 2021). The more consumption will

be done by the people, the more increase will be in the revenue of the organisation considering
its value in the market. The popularity of its products is helping in generating its revenue and is
also considered to be consumed by most of high class customers who contribute in increasing the
market value of the organisation. The organisation mainly focuses on serving qualitative
products to its customers considering the health and safety of its consumers.
Critically discuss which country you would recommend them to enter.
The company of Starbucks intends to expand its chain in the country of Japan in the upcoming
years for its extensive growth in the food and beverage industry. Japan has a very strict culture
when it comes to following of rules, regulations and protocols. It is very much known for its
punctuality behaviour which is the best factor for working or collaborating with an organisation.
The business culture of Japan is very unique and efficient as it follows the rules and regulations
in an efficient manner and have common respect for the people. The main priority of the people
is their immense believe in the value of the product rather than its price. The main focus of the
people is on the quality, reputation and value of the brand in imbibing the organisation in one's
own country. The company of Starbucks believes in maximizing its revenue from the current
market by focusing on the expansion across the borders on an international level. It believes in
establishing coffee oriented stores in the market promoting the beverage culture among the
people(Dhewanto and et. al., 2021). The chain of coffee house also believes in expanding its
business by availing equipments of coffee and also providing packed coffee powder with other
products like cookies, sandwiches, etc. The lifestyle of the people of Japan is very workaholic
and being so focused and punctual in their work, they require quick breaks with refreshment
drinks in order to enhance the productivity of their work. The quality of Starbucks coffee can
provide refreshment in such time which can help the people in doing their work efficiently. The
country of Japan is a very beneficial option in consideration of expansion of business of
Starbucks. Starbucks can increase its revenue in the country of Japan considering its population
and also due to the excessive availability of working class people.
Demonstrate application of the relevant academic theory/models related to the process of
international market selection and entry strategies.
The procedure of selection into the international market is mentioned below:-

 Indifferent procedure:- This type of approach mainly refers to the requirements of its
customers according to their wants and needs. The availability of products in the market
can help in fulfilling the needs of the customers with the availability of different products
in the market. The requirements of the customers will be fulfilled by the particular area of
market.
 Different procedure:- This approach refers to the requirements of the customers with
introduction of various and different brands into the market.
 Procedure of concentration:- The marketing strategy of the organisation is to lay its
major focus on extraction from other areas of the market. The establishment of quality of
the product is the main reason for increase in value of the product in the market. A
particular region must be focused by the organisation in consideration to expansion
across the borders on a global platform (Sebastian and Louis, 2021) The availability of
raw materials and resources can help in making strong position of the organisation on an
international level.
 Niche:- This approach refers to the concentration of big organisations on specific areas of
market that are engaged in the expansion of their business on a global front. There can be
evaluation of competition in the market with the help of these type of strategies which
will also enable to decrease the competition with other big companies.
The procedure of selection in the international market:-
The criteria of selection of the market plays a significant role across the borders on a global
front. The resources and goals of the organisation lays the foundation of an organisation in
establishing marketing strategies and helps in strengthening the base of an organisation. There
are various steps that include the process of selection in the market which are mentioned below:-
 International market objectives:- The objections of an organisation plays a major role
in deciding the parameters for a business to be spread globally with the aid of various
methods and strategies(Tanoto and et. al., 2021). There are other factors that need to be
considered for expansion of business in the market which will help to achieve the goals
of an organisation. Starbucks has to focus on the objectives and goals of the organisation
for establishing its business on international level.
 Parameters for selection:- The establishment of the coffee house chain in the market by
evaluating the areas for selection procedures will help in expanding the organisation

globally. There conditions and situations of the market should be analysed considering
the social, economic and environmental perspectives.
 Preliminary review:- The evaluation of potential customers is done through the process
of pre screening by considering the needs and demands of the customers. The social,
economic and political factors in consideration with the economic growth is also to be
foreseen to evaluate the procedure preliminary review(Viana and Carvalho, 2021).
 Market shortlist:- The area of the market is shortlisted in order to meet the demands of
the customers according to their requirements for the development of the organisation.
The procedure of shortlisting the market is done after evaluation of preliminary review.
 Selection and Evaluation:- The process of selection and evaluation is one of the
important aspect in order to focus on the development of the organisation. The
application of different techniques by applying cost friendly strategy is one of the main
aspect to determine the requirements of the customers.
 Commercial production:- There is usage of different products at certain stage which
helps in conducting the process of manufacturing of the product in international market.
Methods of entry into the market:-
 Exporting:- The products are exported to parties at different levels in order to eradicate
or remove the linking parties. This method of exporting by which products are
transferred from one place to other deals in expansion of business(Silva, da Rocha and
Advogados, 2021). In this, there is direct delivery of products to the customers in order
to reduce the cost of transportation. The main focus is on the competitive market by
delivering products at reasonable prices or rates.
 Franchising and Licensing:- The process of licensing involves in offering royalty to
other organisations enabling smooth entry in the international market. It basically
provides the access to products in exchange to certified usage of products and services.
The needs of the customers are by the process of licensing. The companies on
international level provides the process of licencing by giving access to patent and
copyrights.
 Joint venture:- It is basically the amalgamation of different companies at one place for
the aim of generate benefit in the business. There is an exchange and collaboration of
ideas and ideologies with the process of collaboration of organisations(LONGO, 2021).

The risk with the generation of profit is also shared in the process of joint venture which
helps in increasing the cost and value of the organisation.
Discuss typical barriers that will be faced as the organisation expands internationally.
There are various barriers that are faced by an organisation in expanding the business on an
international level. There are many challenges and problems faced by the company of Starbucks
that are mentioned below:-
 Language and Cultural barriers:- The main issue in expansion of international
business is the gap of language and culture in the market. The company need to examine
and evaluate the differences in order to bridge the gap of such barriers. Starbucks applies
the strategy of having knowledge of the people of Japan in order to deliver them
qualitative services according to their taste and requirements. There should be a brief
research about the place in order to avoid future risk for the development of the
organisation.
 Difference in culture:- There is a different approach in every culture considering its
tradition, taste and act of dealing in business. The company should provide qualitative
products with services considering the particular taste and preference of the people.
Starbucks applies the strategy to evolve in the participation of cultural traditions to have a
deep and clear knowledge of the tradition of the country.
 Global teams management:- The procedure of management is very important for
analysing the structure of business on an international level. The lack of management will
lead affect the productivity and growth of the organisation. The combination of various
people with inclusion of their taste, language and culture helps in dealing with the
management system for the organisation(Drummond Jr, 2021). Starbucks deals in having
active management for the benefit of productivity of the organisation by having a
transparent and effective working culture.
 Legal and regulatory compliance:- There are various obligations with legal
compliances for dealing with the expansion of business on an international level. The
procedure of employee related policies, regulations of trade with the process of taxations
deals in the applicability of legal compliances. It is very necessary for Starbucks to
enforce legal compliances in dealing with the expansion of business on an international
level.

Based on your analysis, critically evaluate a relevant implementation approach for the
internationalisation process for the specified target market.
The Uppsala model is taken into consideration for the internationalisation of the business
organisation, this is the most suitable for the companies in order to tackle the various aspect of
the internationalisation processes. This represents that it is very important to have a successive
approach and means that the business organisation will gradually become internationalized. This
is the model which states that it is very important for the organisation to have a proper
information of the international market. The lack of the knowledge of the international market
can impact in the negative way for the organisation. It is identified that it is very important for
the organisation to established in the effective way in their home country then it can think of
gradually expanding its market in the international market (Azmi, Rosman and Omar, 2021). The
various target customers need to be identified for the company in order to increase the
profitability of the company. It is very important for the marketer to understand the market and
analyse the different perspective in order to improve over the services in the international
market. There are four stages in this model which presents the high degree of global
involvement market commitment. The discussion of the various stages is explained below:
Stage 1: - No regular export activities (sporadic exports)
Stage 2: -Export through an independent agency (export mode)
Stage 3: -Establish a foreign sales office
Stage 4: -Foreign production / manufacturing unit
The stage one is the most important step for the Starbucks in order to expand its market
in the Japan market. It is very important for the marketers to analyse the market in the effective
manner in order to perform the various business operatisations.
In context of the Starbucks it is identified that the company exports through agents. this is
defined as indirect export which helps the companies in gaining the knowledge about the market
of the Japan which is very important in order to understand the customers effectively.
In the next step the the company has to mange export effectively for which the company has to
be aware of the information in order t target the right set of customers. The final step is related to
setting the production of the organisation in the market where the market is already exporting. It

is very important that the company has an advantage of exporting in the different location in
order to increase its profit.
CONCLUSION
From the above report it has been concluded that it is very important for the organisation to
expand globally in order to increase its market share. It is very important for the organisation to
analyse its market of the country in which it has to expand. It is suggested that the chosen
business organisation which is Starbucks can expand its market in Japan in order to increase
market share and profits.

REFERENCES
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