International Marketing Strategy Analysis: Starbucks' Market Entry

This report provides an analysis of Starbucks' international marketing strategy, focusing on its market entry approach. The report highlights Starbucks' use of franchising as a key strategy for entering new markets, emphasizing the importance of market research to understand cultural nuances and competitor strategies. It examines the factors that influence Starbucks' franchising decisions, including motivation, speed of growth, profitability, and improved valuations. Furthermore, the report delves into the behavioral theory of Starbucks, discussing its assumptions of profit maximization and perfect knowledge, and how these influence decision-making. It also explores the distribution channels employed by Starbucks, particularly the indirect system and online distribution, to maintain quality and manage supply chains. The report concludes by mentioning Starbucks' multiple distribution channels, including direct retail, supermarkets, and shopping centers, which enable them to reach a broader customer base and expand into new markets effectively.

INTERNATIONAL
MARKETING
STRATEGY

TABLE OF CONTENTS
6 Market entry strategy and factors which affect to it.................................................................3
REFERENCE...................................................................................................................................5
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6 Market entry strategy and factors which affect starbucks
Market entry strategy
When Starbucks enter new market they use franchising strategy which enables to grow
their business in different markets. Before entering into new market they conduct research that
helps them to identify culture, strategies which are used by competitors. Further, research helps
them to raise their market share and enable them to identify different regional store in which they
can expand their business through franchising (Tayar and Jack, 2013). This is because research
provides market knowledge, capital requirement and person involvement in managing
expansion..
Factors which influence franchising of Starbucks
In term of market entry strategy, following factors that influence Starbucks are as
follows: Motivation: Manager of the organization get opportunity to provide newly hired manager
with proper training. In franchising, new market is selected where new workers are hired
and they conduct their work effectively because they are provided training before
carrying out the task. This thing motivates them and with this they will be able to achieve
their set targets effectively (Kaustia and Knüpfer, 2012). Speed of growth: In order to achieve growth of the business, franchising is suitable
method for Starbucks. This is because; problems are distributed among the different firm.
Thus, organization can achieve quickly growth for their business (Eysenck, 2013). Increasing profitability: Starbucks have the opportunity to increase their profits from
franchising their business in different countries. They can get revenue from different
business franchising which will help them to grow their market share as well as profits of
business (Grant, 2016).
 Improve valuations: From franchising, cited organization can achieve faster growth,
increase profitability and increased organizational leverage which will assist in increasing
value of the firm.
Theory of firm behaviour
Behavioural theory of Starbucks consists of two assumptions such as profit maximization
and perfect knowledge. It helps to analyze basic unit of cited organization. It attempts to predict
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behaviour with respect to price, output and response allocation decisions. It emphasizes on the
decision-making process which help to take decisions in the organization. It also assists in
collecting proper information which will help in maximizing profits of Starbucks (Bradshaw and
Killeen, 2012).
Distribution channel used by Starbucks
In many organizations, distribution is not always carried out for the physical products
sometimes it is used for developing relations with people. Starbucks use indirect system channel
as in this they use online distribution which help to spread message at the marketplace. They
provide the highest volume of coffee in market through the systematic process. In this context,
they follows process where coffee beans are handed from farmer to collector, collector to miller,
miller to exporter and then to the importer. Importer sells the coffee beans at very large mass
market (Davies, 2012).
Starbucks make use of online distribution to maintain quality of coffee and supply
accurate quantity demanded. In this context, company works to maintain good relations with the
suppliers. Thus, Starbucks uses multiple channel of distribution for their products. They firstly
sell their product through direct retail system in the company’s owned stores. Further, they also
sell their products in supermarket and shopping centres. This is because; it helps to expand their
business in the outside boundaries. Through this, they can enter new market in a country at a
time. In order to use multiple distribution channels, organization can reach all the customers in
less time (Karray, 2013).
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REFERENCE
Books and Journal
Bradshaw, C. M. and Killeen, P. R., 2012. A theory of behaviour on progressive ratio schedules,
with applications in behavioural pharmacology. Psychopharmacology. 222(4). pp.549-
564.
Davies, R., 2012. Marketing Geography (RLE Retailing and Distribution): With special
reference to retailing. Routledge.
Eysenck, H. J., 2013. Learning Theory and Behaviour Therapyf. Readings in Clinical
Psychology.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Karray, S., 2013. Periodicity of pricing and marketing efforts in a distribution channel. European
Journal of Operational Research. 228(3). pp.635-647.
Kaustia, M. and Knüpfer, S., 2012. Peer performance and stock market entry. Journal of
Financial Economics. 104(2). pp.321-338.
Tayar, M. and Jack, R., 2013. Prestige-oriented market entry strategy: the case of Australian
universities. Journal of Higher Education Policy and Management. 35(2). pp.153-166.
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