An Analysis on Starbucks’ International Business Entry Strategies in China

Abstract

Marketing literature suggests that selection of an appropriate strategy is very much important to gain sustainable competitive advantage to be successful in the international business; however, literature detailing with international business entry strategies is scarce. This study is the outcome of an in-depth analysis of Starbucks entry strategies in China. The entry strategies of Starbucks in China followed the gradual incremental involvement of resource commitment. Considering all key influential factors like firm specific; industry specific; country specific; cultural; environmental factors, Starbucks started to follow high/majority equity joint ventures and wholly owned subsidiaries as a preferred entry mode to hold more control in the growing coffee market of a country with emerging economy but high cultural differences. Starbucks used the standardized product (coffee) and tuned promotional activities as per the requirement of the target market segments in China in order to position Starbucks’ coffee-café to the similar customer groups not only as a seller of high quality coffee but also as a provider of comfortable and relaxed atmosphere by providing customer a third place away from work or home to relax and socialize.