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Running head: STARBUCKS AROUND THE WORLD: BREWING SUCCESS
Starbucks Around the World: Brewing Success through Global Strategies
Caitlin Bowens
Central Michigan University – MKT560
23 September 2023
Starbucks Around the World
2
Introduction
Starbucks has established themselves as the largest coffee chain in the world. One way
that Starbucks successfully expanded globally was by moving into emerging markets and
educating that market about coffee. Starbucks also relied on local partnerships in those markets
to comprehend the local environment. Their adaptability to each country and each market has
been the key piece to their expansion efforts. Starbucks has been successful in many countries
such as Japan, Europe, China, South Korea, and Canada.
Most of their success is due to their global awareness. According to Cateora et al., (2023),
“to be globally aware is to have (1) tolerance of and a willingness to learn about cultural
differences and (2) knowledge of cultures, history, world market potential, and global economic,
social, and political trends.” Another word for global awareness is cultural intelligence. Cultural
intelligence is the ability to recognize, adapt to, and work successfully with people from different
cultural backgrounds. The key components that it takes to achieve cultural intelligence is cultural
awareness, cultural adaptability, and cultural communication.
Starbucks has three main approaches when it comes to market entry: joint ventures,
wholly owned subsidiaries, and licensing. Starbucks’ joint ventures have been with locals which
will limit financial exposure for the company. This method is used when companies look to each
other’s strengths and access new markets.
Licensing may be the least profitable way to enter the
market, but it also has a small amount of risk
(
Cateora, 2023). This strategy is where a company
will grant another company permission to use its intellectual property for a fee. Wholly owned
subsidiaries are companies who are entirely owned and controlled by another company. The
owning company also holds all the shares in the subsidiary. This method is generally used by
multinational corporations who expand into foreign markets. Due to these methods and
Starbucks Around the World
3
strategies, Starbucks’ decisions are closely aligned with their consideration of local partners in
each market. This allows Starbucks to adapt to local cultures, tastes, and consumers behaviors.
History of Starbucks
Starbucks, the world’s largest global chain of coffeehouses, is headquartered in Seattle. In
1971, the first Starbucks opened and sold only coffee beans. In 1982, in their fifth store opened,
they started selling brewed coffee. This year is when Howard Schultz was brought in and made
additions that would change the future for Starbucks, making them one of the greatest
coffeehouses. Mr. Schultz, after visiting Italy, returned to the states, and decided he would make
Starbucks a place where people could socialize in the coffee shop. By 1996, Starbucks had begun
its global expansion into Japan, followed by Europe and China by the year 2000. By 2010,
Starbucks had expanded to more than 42 countries, and by 2021, 80 countries (Birch, 2021).
Approach in Canada
Starbucks opened its first location outside of the U.S. in Vancouver Canada in 1987.
Starbucks in Canada wasn’t much different from those in the United States. They entered Canada
after focusing exclusively on the North American market. Starbucks has adapted their menu to
the preferences of Canadians. This is a feature they have deployed in all foreign markets that
make them culturally intelligent. They aim to adapt to regional tastes but also maintain brand
identity. Altogether, there is little difference between stores in the US and stores in Canada.
Starbucks is successful in both markets.
Approach in Japan
In 1996, Starbucks’ first international venture was the Japan market. One of the key
influences behind Starbucks’ decision to choose Japan for its initial major international
expansion was that it ranked as the world’s third-largest consumer of coffee. Another reason that
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