Starbucks: Issues and Solutions in International Business Strategy

This report provides an in-depth analysis of Starbucks' international business strategy, exploring the various challenges the company faces in its global operations. The report begins with an overview of Starbucks, followed by a detailed discussion of the key issues encountered, including foreign laws and regulations, cost calculation and global pricing strategy, communication difficulties and cultural differences, political risk, supply chain complexity, labor exploitation, environmental concerns, international company structure, local competition, and unfavorable economic conditions. For each issue, the report offers insights into how these challenges impact Starbucks' operations. Furthermore, the report proposes potential solutions to address these issues, offering a comprehensive understanding of how Starbucks can navigate the complexities of international business and maintain its global presence. The report concludes with a discussion of relevant international business theories that can support the company's strategic decision-making.

International Business
Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Overview of company..................................................................................................................3
Issues in international business strategy......................................................................................3
Solution for resolving these issues..............................................................................................7
Theories for company..................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
International business strategy, it is a strategy that every business or company needs to
developed which runs its business operations at the international level. There are various issues
also has faced by different businesses while making their international business strategy. In this
situation, existing management within businesses and companies should be taken different
productive decisions towards systematically dealing with the impact the of various issues of
international business strategy. In this dynamic world, every business wants to run its business
operations at the international level, so before running business operations internationally, every
business should be learnt about how to deal with different issues of international business
strategy. This is report discusses issues of Starbucks’ international business strategy. This is
basically a popular coffee café company which currently has very large customer base in across
the world. Headquartered of Starbucks is, Seattle, Washington, United States. There are some
key theories of international business strategy also has been provided in this report which can
support this coffee café company to properly deal with different issue of international business
strategy.
MAIN BODY
Overview of company
Starbucks is basically an American coffee café company which was founded in 1971.
Currently headquartered of this company has situated in Seattle, United States. currently operates
in approx. 79 countries in across the world with 28,220 employees. It generally has different
coffee café shops in different cities and towns of countries (Yavas, Grave and Vardiabasis,
2019). From establishment to date, upper management of this company has highly focused on
more and more expanding its business operations by entering in the new market segments. So
that, this company has always required to make different business strategies for systematically
running its business operations internationally. Of course, this company faces different issues in
its international business strategy. However, upper management of this company now able to
properly deal with these all issues in its business operations.

Issues in international business strategy
There are lots of issues has faced by Starbucks in its international business strategy, so
that some key issues of international business strategy have been discussed below;
Foreign laws and regulations: Currently Starbucks run its business operations in many
countries, so identify and adhere laws and regulations of each and every country is very
complicated task to this coffee café business. That’s why this factor has considered by upper
management of company as an issue of international business strategy. Basically, foreign laws
and regulations has influenced Starbucks for making its business strategy accordingly. However,
company faces different challenges while making for business strategy to that kind of countries
which has very strict laws and regulations. So, this very big issue to Starbucks to formulate such
business strategies which are appropriate according to the government of existing countries.
Cost calculation and global pricing strategy: This is another key issue of the Starbucks,
because tasks of cost calculation and global pricing strategy are very complicated at the in
international level (Dahms, 2019). That’s why this factor also has considered as an issue of
international business strategy. Currently many of multinational companies has hired different
people or employees within their respective workplace for systematically dealing with issue of
cost calculations and global pricing strategy. Basically, every country has its own currency, so
currency exchange is also something hard task to this company. Application of global pricing
strategy is also very tough task to company, because there are company has to fulfil different
formalities according to legal system of different countries. That’s why cost calculation and
global pricing strategy also can be considered as an issue in international pricing strategy.
Communication difficulties and cultural differences: This is also another key issue in the
Starbucks’ international strategy. Basically, while running business at the international level,
company has to leant about different languages of different countries to communicate properly.
On the other side, there are company needs to be completely aware about the cultures of different
countries, in which it is necessary to company for making an excellent relationship with all the
customers. In this situation, deeply understanding communication and cultural differences is not
a small task to this company, because company has required to put its huge efforts to do this. For
perfectly communicate with customers of different countries, there are company has hired local

people as employees. So that, these all procedures are very challenging for the company, in
which this is also considered as an issue in Starbucks’ international business strategy.
Political risk: Political risk is one of the key issues in the company’s international busines
strategy. Basically, many times political environment of a country become very risky for the
company (Cheong and et.al., 2019). There are company get always influenced to maintain its
great relationship with existing government of a country by fulfilling their obligations in very
proper manner. Otherwise, local governments of many countries not give permission to those
MNCs in their business environment to run their business activities. In this situation, taxation
also a major obligation to company that company has to fulfil to systematically deal with
political risk issue. Currently this coffee café company runs its business operations within many
countries, in which local government of many countries are not favourable to Starbucks, because
these countries’ local government has imposed such obligations and duties of this company
which are very tough to fulfil. This is the main reason that, political risk also should be
considered as issue for the Starbucks’ international strategy of business.
Supply chain complexity: Supply chain complexity is another key issue for the company,
because manage supply chain at the international level is not a small task to a company. Many
times, company faces huge damages also while transporting its different goods from one place to
another through cargo ships, planes and road vehicles. So that, company always has to make an
effective strategy for perfectly managing its distribution channel in all around the world. Many
times, Starbucks has to pay very high amount in custom for getting permission to reach its goods
in any country. On the other side, when company supply its goods or items internationally, on
that time it has required to fulfil very complicated paper work formalities. Basically, company
invests its huge funds for successfully running its supply chain at the international level, because
it is a leading coffee café business which always need to deliver its products from one place to
another in very systematic manner (Bıçakcıoğlu, 2018). In this situation, this also an issue in the
global business strategy of Starbucks.
Labour exploitation: Many times, Starbucks has required to deal with this issue as well.
Basically, this company runs its business operations in many countries, so sometimes upper
management faces issue of labour exploitation also in its large business environment. However,

top-level management of this company has created special policy against employee or labour
exploitation, but still Starbucks’ many managers and leaders exploits their employees in the
workplace, so that this factor has negatively affected to employees’ performance and
productivity. This issue always negatively influences to Starbucks’ great reputation in the
market. In this situation, this company has required to make some strict policy against its those
leaders and managers who exploits different employees in the workplace. According to many
business experts, most people or employees always like to work in that kind of workplaces where
existing management has successfully controlled issue of exploitation. So that, top-level
management at Starbucks is required to properly deal with the issue of labour exploitation while
using international business strategy.
Issue of global environment: Currently the whole world is suffering from the global climate
change, in which this is not favourable to out earth (Soltanizadeh and et.al., 2016). This company
always focuses on opening its shops in those zones where less chances of natural disasters. In
this situation, identification of safe and secure place to open a new coffee café shop is very tough
task to this company. On the other side, some countries which are highly active towards taking
decisions for protecting the natural environment. In this situation, while running own business in
such countries, the Starbucks needs to be focused on avoid those activities and attempts in its
business environment which can be negatively affected to the natural environment. Issue of
global environment many times stops company to open its new coffee café shop in the decided
place or zone. That’s why this is also a big issue within the Starbucks’ global business strategy.
International company structure: Currently the company’ international structure is very large,
so that it is tough task to company for systematically handling it’s all business operations at this
scope. Due to the large scope, company always has required to conduct its different HRM
practices to hire many new employees for successfully running its business operations at the
international level. Due to large structure of business, Starbucks has required to put its huge
efforts in the comparison of other companies. Top-level management responsible to every
moment ensure that, everything is going well or not its operations of different countries. Reason
is, different coffee café shops can face different challenges in its existing places as well
(Gerasimov and et.al., 2019). This is the main reason that, upper management of company

mostly requires to take quick action resolving challenges and difficulties of its any coffee café
shop.
Local competition: This is also a big issue in Starbucks’ international business strategy.
Basically, when company enters in any new segment of market by opening a new coffee café
shop, in which this company always issue of local existing competitors. Local existing
companies of coffee café shop mostly give very tough competition to this company at the
international level. In this situation, coffee café manager of company needs to systematically
handle and manage all things to get proper results (Klarin, 2018). On the other side, company
need to take some patience also for getting better outcomes in that market place where already
many coffee café’s companies have existed. So that, top-level management at Starbucks should
some appropriate business strategy to systematically dealing with the impact of the issue of local
competition.
Unfavourable economic conditions: Everyone knows that Starbucks always offers premium
range of coffee to different customers within the market, so that company has required to open
its new shops in those such countries or places where existing economic conditions are
completely well and favourable to the company (Hosseini and Farooq, 2019). This issue mainly
stops to company for more expanding its business operations. Basically, company avoid to open
its stores in those countries which has un-developed economic conditions. Mainly people who
lives within the developed and developing countries are able to easily afford the premium coffee
of company. That’s why unfavourable economic condition is big issue for this company.
These all are some key or prime issues in the Starbucks’ international business strategy.
So that, upper management of this company has required to take some appropriate steps towards
properly dealing with these all issue. However, company mostly takes very appropriate steps
towards making its international business strategy too much effective, because Starbuck expects
very excellent outcomes from its international business strategy there are some favourable
solutions has been discussed below which can support to this company for systematically dealing
with these all issue of international business strategy.

Solution for resolving these issues
There are various appropriate solutions available to company which can support in
systematically dealing with different issues of its international business strategy (Alizadeh and
Sipe, 2016). Top-level management of this company has highly required to follow these all
solutions within its daily operations for gaining very appropriate outcomes from own
international business strategy. Some key solutions for issues have been discussed below.
There are company need to choose the right market place for expanding its business
operations, because it is necessary to this company for gaining huge profit from different other
countries as well. While choosing the market place, top-level management of company has
required to ensure that, existing market place is favourable for the company or not. Reason is,
when company has favourable market place, then it can easily gain appropriate outcomes without
facing any issue. On the other side, company should be learnt from its previous experiences as
well, because it is necessary to Starbucks for not repeating those mistakes which it has does
before, by considering this thing, this coffee café company will be able to gain very excellent
results within international business operations. At the end, company has required to innovate
new business tactics for leading the international coffee café sector.
Theories for company
There are international trade theories can be completely supported to Starbucks for
solving its different issues in international business strategy (Alcácer, Cantwell and Piscitello,
2016). The company has required to follow the concept of these different theories of
international trade. These all theories will definitely enable to this company for gaining very
appropriate outcomes from its international business strategy, in which some key theories of
internal business or trade has been discussed below;
Theory of competitive advantage: This is theory is very favourable to the company, because
with the support of this theory, Starbucks will completely achieve an excellent profit within the
international market. According to competitive advantage theory, Starbucks has always required
to take such steps which can provide it the great competitive advantage in different countries. For
example; company can provide exclusive products and services to customers for highly attracting
them towards own brand. On the other side, company can run some productive market
campaigns for taking attention of lots of people within the international market. With the support

of this theory, Starbucks can able to generate huge revenue by using its international business
strategy in the internal market.
Theory of HRM: The company has required very trustable workforce in different countries for
gaining very appropriate foreign exchange (Ubong, 2018). In this situation, company should
apply the theory of HRM, because theory enable to company for gaining effective workforces
within many of countries within the international market. According to theory of HRM, company
should be focused on hire those people within its workplace who are really capable for putting
great efforts in the workplace. At the end, this company of coffee café shops will be able to gain
very appropriate outcomes through its international business strategy by considering this theory
of international trade.
CONCLUSION
It can be concluded that there are various issues can be faced by Starbucks in its
international business strategy. So that, upper management of this company required to use some
appropriate tactics or techniques to resolving these all issues. Of course, running business
operations within lots of countries is not an easily task to company, but by taking few activeness
within existing job role, top-level management will be able to gain excellent outcomes from its
strategy of international business (Sapkota, 2019). Every time, company needs to be focused on
new growth opportunities. By considering these all mentioned factors, Starbucks will be able to
achieve great competitive advantage within the international market.

REFERENCES
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subsidiaries. Canadian Journal of Administrative Sciences/Revue Canadienne des
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