Significance of Starbucks' Market Entry Strategies: Case Study

This report is a comprehensive analysis of the strategies employed by Starbucks to enter emerging markets. It begins with an introduction outlining the research's background, rationale, and objectives, setting the stage for an in-depth exploration of Starbucks' market entry approaches. The literature review delves into the significance of various entry strategies, including franchising, and examines the importance of market development strategies, such as the Ansoff model, for Starbucks' expansion. It also addresses the potential risks associated with entering emerging markets, such as navigating foreign laws and regulations, and assesses the relationship between market strategies and Starbucks' overall business success. The research methodology section details the use of interpretivism, an inductive approach, and a descriptive research design. Data collection relies on primary sources through questionnaires. The report aims to provide insights into how Starbucks leverages different strategies to achieve growth and success in international markets, considering factors like market development, risk management, and the impact of various entry modes.

Unit 11

Table of Contents
TOPIC: “A study of the significance of different strategies employed by businesses to enter
into emerging Market: A Case study on STARBUCKS”...........................................................1
Chapter 1..........................................................................................................................................1
Introduction......................................................................................................................................1
Introduction of research..........................................................................................................1
Background of research..........................................................................................................1
Research rationale with justification......................................................................................1
Research Aim.........................................................................................................................2
Research objectives................................................................................................................2
Research questions.................................................................................................................2
Chapter 2..........................................................................................................................................3
Literature Review.............................................................................................................................3
Chapter 3..........................................................................................................................................6
Research Methodology....................................................................................................................6
Chapter 4..........................................................................................................................................9
Analysis and Findings......................................................................................................................9
Chapter 5........................................................................................................................................16
Conclusion.....................................................................................................................................16
References......................................................................................................................................18

TOPIC: “A study of the significance of different strategies employed by businesses to
enter into emerging Market: A Case study on STARBUCKS”.
Chapter 1
Introduction
Introduction of research
Strategies are formulated by organizations to carry out their operations in effective way.
By this they are able to furnish their services in trenchant way. For this they consider certain
factors related with country in which they are operating but mostly they are aware about their
political, economic, societal factors (Avraham and Ketter, 2012). But when Starbucks is looking
forward to expand their services in other country they need to take into consideration various
factors like currency rates, methods by which they can enter into specific country, political risks,
worldwide environmental issues and many others. By taking into account these factors they can
ensure that which country they have to enter and which method (licensing, franchising,
exporting, joint venture and many others) can be used by them to enter into a emerging market.
Background of research
With the enhancement in market and competition, it is necessary for an organization to
expand themselves by which they can enhance their customer base and generate high profit. For
this organization need to take into consideration various aspects by which they can enter into a
new market. This comprises of laws and regulations which are formed by specific country, their
political, economic situations, currency rates and many others (Barney, 2012). By taking them
into account Starbucks can ensure that they have relevant strategies which will lead them
towards growth. Starbucks is American coffeehouse chain and operates their services in more
than30,000 locations across the world. It is considered as major representative of of second wave
coffee. They are renowned for their darkly roasted coffee. To increase their profit and revenue,
they are entering in new market.
Research rationale with justification
The major purpose behind selection of this topic is to determine significance of various
entry strategies which are used by Starbucks to enter within emerging market (Beamish, 2013). It
is a multinational coffee company which renders their services worldwide. Both organization and
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topic is large, it will provide learner with more aspects to acknowledge peculiar research filed.
By this researcher can improvise their research skills which comprises of collection of data,
tabulation and their evaluation. This will also enable researcher to improvise their data
interpretation skills, knowledge related with this aspect by going through literature review and
creation of transferable skills in systematic way.
Research Aim
“A study of the significance of different strategies employed by businesses to enter into
emerging Market: A Case study on STARBUCKS”.
Research objectives
 To explore about the concept and significance of market entry strategies employed by
Starbucks to enter into emerging market.
 To examine the importance of market development strategies for company to enter into
emerging market.
 To analysis the different risks for Starbucks while they enter into emerging market.
 To accelerate the relationship between different market strategies and business success of
Starbucks.
Research questions
 What are the concept and significance of market entry strategies employed by Starbucks
to enter into emerging market?
 What is the importance of market development strategies for company to enter into
emerging market?
 What are the different risks for Starbucks while they enter into emerging market?
 What are the relationship between different market strategies and business success of
Starbucks?
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Chapter 2
Literature Review
Literature review refers to critical as well as in depth assessment of previous research. It is a
broad summary of research on a specific topic. It comprises of books, scholarly articles, surveys
and other sources which are linked with peculiar area of research (Bock and et. al, 2012). In this
section, all the objectives and questions are addressed in suitable manner.
Concept and importance of market entry strategies employed by Starbucks for entering
within emerging market.
According to Boons (2013), There are various types of entry modes which can be used by
organisation to enter within emerging market. These strategies comprises of licensing, joint
ventures, franchising, outsourcing, strategic alliances and many other. These strategies provides
some or other benefits to organisations which comprises of reduced cost , risk involved is less,
optimum usage of resources and many more. Starbucks is making use of franchising entry mode
to enter within rising market. The reason behind its usage is that there is less risk which is
involved in failure of business (Boons, and et. al, 2013). Products (coffee, juices, sandwich,
salads, etc.) which are being offered by Starbucks will have implanted market share. Apart from
this, no prior experience is required and franchisee makes sure that skills which are needed for
operating franchise are constituted. Starbucks by making use of franchising can expand their
capital as franchisees will pay for buying outlets by which they can grow in many locations
without taking loans from investors or banks. Buying a franchise is less costly with respect to
starting up a new business which is of same type. Franchises provide high rate of success as
compared to start up businesses (Boso, Story and Cadogan, 2013).
Importance of market development strategies for Starbucks to enter within emerging
market.
According to Christensen, (2013), Ansoff model can be taken to design the market
development strategies as it provides organisation with focussed approach and growth potential.
Starbucks can use this strategy to enter into emerging market (Christensen, 2013). This model
can be used by them to look forward at opportunity which can lead them to growth by
developing new services and products within new market. It comprises of market penetration,
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market development, diversification, product and development. They will assist Starbucks to
answer questions like how they can sell more services or products to existent customers, how
they can enter within new market, ways by which they can enhance their services and how they
can enter within new market with their new services and products. By answering this question s
they can analyse how they can enter within emerging market as well as develop strategies for the
same. This will help management of Starbucks to develop strategies as per current market
conditions. By considering these four elements Starbucks can drive enhanced sale as well as
identify practicality of business to make sure their chances of survival within new market (Gee,
2018). Apart from this, they will be able to enhance their market share of their existing products
and restructure their market by driving their competitors out, this needs that Starbucks must have
strong promotional campaigns for this along with this effectual pricing strategies. This will assist
them to identify ways by which they can gain loyalty of customers and retain them for lifetime.
By this they will be able to acquire amended results within stipulated time duration.
Various risks for Starbucks while entering within emerging market.
According to Gereffi, and Lee, (2012), expansion of business implies that new customers
as well as clients are reached and thereby boost up profits of business. There are various risks
which are associated with Starbucks while they are entering within emerging market (Gereffi,
and Lee, 2012). Major challenges linked with this are foreign laws and regulations, international
accounting, international company structure, global pricing strategies, communication and
cultural differences and many others. It is necessary for management of Starbucks to understand
local laws and regulations which are associated with target market. These laws can vary from tax
laws to trading laws and they must be followed by Starbucks so that they do not fall into any
legal trouble. Tax compliance is very crucial while conducting operations in international
market. This can be challenging as there tax systems, compliance needs and rates can vary.
Setting prices of services and products while carrying out services overseas can be risky and it
must be focussed on while creation of strategies. This will assist Starbucks to remain competitive
within market and ensure the profit. These all factors will have strong impact on functionalities
and operations of Starbucks, therefore while formulating their strategies they must consider all
these points before entering in new market (Jarillo, 2013).
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Relationship among assorted market strategies and business success of Starbucks.
According to Kapferer, (2012), foreign entry strategies are mandatory for success of any
organisation. Licensing, joint venture, franchising, etc. are considered as entry modes which
assist organisation evolve their business functions as well as operations (Kapferer, 2012). In case
of licensing, an agreement occurs in which one country permits their firm to operate their
activities in other country to use their intellectual property like marketing skills, copyrights,
patents, etc. Franchising is form of licensing, where franchiser grants right to organisation to
conduct their operations to another franchisee in specific manner. They are considered as best
entry mode and this will assist organisation to develop their functions and operations. Supplier
put their skills which render incorporated services to clients which will benefit ownership as well
as eliminate risks of ownership. By this Starbucks can commercialise their experience which has
been created by usage of important investments (Luthans and Doh, 2012). If strategies formed by
Starbucks are not good and id they do not take into consideration different aspects then it will
lead to failure. Therefore, they need to consider formulation of effective services as well as all
the laws and legislations of particular country, Starbucks can have desired growth. Apart from
this, the need to make sure that quality of their products is high which signifies that they can
have high profit and create a competitive edge within a new market.
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Chapter 3
Research Methodology
Research is defined as a process which increases in depth knowledge of specific topic.
Research methodology comprises of various techniques and tools by which researcher can attain
affirmative results (Perry, 2012). There are various techniques which can be used by researcher
to carry out research in ethical way:
Research philosophy: It is an necessary tool which comprises of various factors like
source, development and nature of knowledge. Research philosophy is categorised into
interpretevism, realism, pragmatism, positivism, etc. In this research, researcher has opted to use
interpretevism as it will assist to attain required results within stipulated time frame (Rothaermel,
2015).
Research approach: This factor focuses on techniques which will assist in complete
analysis of subject or topic. There are different approaches; they are inductive, deductive and
abductive. In this research inductive approach is used by researcher to gather information related
with this aspect.
Research Design: Conducting a research is a lengthy as well as essential process. It must
be planned in such a way that it becomes easier for reader to interpret information provided by
researcher. Therefore, it is mandatory for a researcher to design research in efficacious and
proper manner. Researcher has made use of descriptive research design so that elaborated
information can be presented to reader. It will also improvise knowledge base of reader
(Sadgrove, 2016).
Research Method: They signify basic ways in which research is carried out. They can be
either quantitative or qualitative. In this research, researcher has opted to make use of qualitative
method as it contains different processes and theories through which elaborated information can
be presented.
Data sources: Sources which are used to acquire data and information are referred to as
data sources. Basically there are primary and secondary methods for collecting information. In
this case primary source of data collection is used by researcher as it provides fresh data.
Secondary source provides information which is published either in books or journals.
Questionnaire has been used to gain knowledge related to this aspect (Schaper, 2016).
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Data Analysis: It refers to process which is used for conversion of information into
useful and meaningful form. This information is gathered from respondents and is presented in
the form of recommendation which will assist to develop understanding of research. In this
research thematic analysis has been utilized for analysis of data (Shenkar, Luo and Chi, 2014).
Normally, it is qualitative and focuses on scrutiny of different data pattern which assists in
accomplishment of research.
Research Sampling: It is inbuilt process which comprises of selection of respondents
from whole population. It is normally done randomly. It comprises of non-probability as well as
probability for selection of sample size. Non-probability sampling method is used by researcher
as it do not need more cost, time and resources with respect to probability sampling. In this
research, sample size of 40 respondents is taken by researcher.
Ethical Consideration: It implies that research must be carried out in fair and free
manner by making use of ethical practices (Storey, 2016). Apart from this, it is suggested that
research must be legitimate and ethical. Information which is furnished to readers is fair which
will intensify reliability and validity of research.
Questionnaire
Q1. Are you aware about the concept new market entry?
 Yes
 No
Q2. What is the importance of market development strategies for company to enter into
emerging market?
 Easily attract customers
 Create new market position
 Increase business income and growth
Q3. What are the different challenges faced by Starbucks while entering into new market?
 Culture differences
 Technological changes
 Political influence
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Q4. Is there any requirement of conducting training session for employees while organisation
emerging into new market?
 Yes
 No
Q5. Do you think, Starbucks can easily attract large number of customers by offering variety of
goods and services?
 Agree
 Disagree
Q6. What are the various ways through company can enter into new market place ?
 Licensing
 Franchising
 Joint venture
Q7. Does Globalisation assist in attracting domestic as well as international customers towards
the business services?
 Agree
 Disagree
Q8. Any suggestions to Starbucks for further improvements.
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Chapter 4
Analysis and Findings
Theme 1: Concept of new market entry
Q1. Are you aware about the concept new market entry ? Frequency
Yes 32
No 8
Interpretation: From above graph, it is interpreted that according to 32 respondents they
are aware about concept of new market entry and 8 respondents are not aware about this concept.
This means that most of people now that businesses can enter within new market with their
existing goods and services or by introducing new products. This will assist organisation to
enhance their profitability as well as productivity. But they need to take into consideration
different aspects associated with the same like laws in which they want to operate and many
other factors. Apart from this, researcher need to carry out accurate research by which more
people can get to know about this concept.
9
Yes No
0
5
10
15
20
25
30
35