The Case Discusses the Turnaround of Japanese Automobile Major Nissan Motors Ltd

STARBUCKS INTERNATIONAL ENTRY STRATEGY Starbucks International has gone beyond the normal philosophy of Starbucks, to create a re-birth of their product line in foreign countries. Typically in the Unites States, Starbucks owns its entire line of coffee-bar stores outright with no franchise investments or partnerships. However, their international operations are quite the opposite. Starbucks International has adopted a strategy of partnerships to create its line of international coffee-bar stores. These joint ventures create an increased ease of entry into the foreign market.

Starbucks International choose to be involved with partnerships for the benefits these relationships offered over their typical wholly owned subsidiary philosophy. However, choosing the right partner, poses a potential problem for the company. Although Starbucks uses multiple lines of distribution to saturate to US coffee market, its international operations consist only of coffee-bar restaurants. Therefore, they only have one channel of distribution internationally. Through this, Starbucks had to choose a partner that would facilitate their creation and expansion of coffee bars in the international arena, specifically Asia and Japan their primary target. Starbucks developed a series of criteria to which they evaluated different potential partnerships in Japan and other foreign countries. First, they sought to implement the idea of "partnership first, county second," as a means of developing partnerships that focuses on the companies goals, and not the countries goals. Second Starbucks noted six additional criteria they used to narrow and conclude their partnership search. (1) They looked for companies with similar ideas about values and corporate life. (2) They wanted companies that had experience in the multi-restaurant business. (3) Potential partners had to have enough financial resources to help saturate a given market so as to counter the possibility of imitations. (4) Starbucks sought partners that had the ability and experience to locate prime real estate for coffee-bar locations with a (5) knowledge of the retail market. Finally, (6) Starbucks looked for partners who had the manpower available to make a full commitment to the project. It was this selection criterion which aided Starbucks in implementing the benefits of partnerships to their international operation expansion.

When looking at Starbucks international entry strategy, three main potential benefits arise from the development of the partnership. These benefits had and have the potential to be varying in their degree of usefulness dependent upon the entry strategy Starbucks chooses, in this case Joint Venture (partnership). The three main potential benefits of a joint venture entry strategy are: protection of the sustainable competitive advantage, reduction in the financial risk incurred by the firm (Starbucks), and the benefit of knowing how well the US product will do in the foreign market through local adaptation. We will examine each of these more fully from the viewpoint of Starbucks entering into the Japanese foreign market.

In a company where coffee is a way of life, Starbucks had to fully deploy the creativity of its originator to develop a sustainable competitive advantage and be a focused differentiator.