Managers' Forum ~ Business Case Reviews
Starbucks Coffee: Expansion in Asia
Business Case Review by: Andrés
Gutierrez-Meca
The case of Starbucks coffee
expansion can give me the background that
I need in order to create a successful business in the Asian market.
It
is a good example of how a medium company that started as a small local
business has reached nation wide stability and is looking to expand
into
new positions in the Asian market.
One of the reasons for Starbucks´
domestic success is based on their
commitment to high quality products and rigorous standards. The company
continued this strategy when they entered Japan and Singapore.
Therefore, my product has to have high standards of quality to satisfy
the Asian consumers. Starbucks entered Japan and Singapore as
a first
step. During the second phase they will be looking to include
Taiwan,
South Korea, Hong Kong, Malaysia, and Indonesia. By then, they will
process the coffee at some Asian location, instead of sending weekly
shipments of the final coffee product as they are doing right now.
The most important idea that
I am going to apply to my project is
something that I was already considering: the use of a joint-venture,
a
domestic partner that is going to help my company to negotiate local
regulations and other country-specific issues. The two joint-ventures
that Starbucks have in Japan and Singapore are a great success.
They
gave the company an understanding of the consumer market, government
regulations, and the local real estate market. From there, they
just
have to continue the same steps to increase their presence in those
countries and enter some new markets. Getting bigger will be the right
formula to fight against competition by reducing their cost.
References:
Masaaki Kotabe, Kristiaan Helsen "Starbucks Coffee: Expansion in Asia"
Global Marketing Management John Wiley & Sons, Inc., 1998
(Pg. 558)
ISBN 0-471-59288-9
