Starbucks Entry Strategy

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Used the Right Marketing Strategy:
When entering China, Starbucks executed a brilliant market entry strategy. It refrained itself from using those type of advertisements that the Chinese could have thought could be a threat to their historic tea drinking tradition. Hence, Starbucks focused on selecting major locations to project its brand image to the Chinese. Then Starbucks capitalized on the tea drinking tradition of the Chinese. Starbucks introduced such beverages, using local ingredients such as green tea, so that it suited the taste of the Chinese consumers. This strategy effectively turned potential obstacles into Starbucks’ favour. One of Starbucks’ key marketing strategies was also to provide their customers with an exceptional experience,
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Anil Patil, who is the founder of 23.5 Degrees, and his company was also supported by another company Santander Corporate & Commercial with £3.8 million. (The Business Magazine) Two outlets were opened, one in Dorset and the other Hampshire, creating over a hundred jobs. Other franchises were opened in Portsmouth Lakeside, Bournemouth and Farnborough. (Starbucks opens first UK franchise, 2013)
Starbucks used the Joint Venture as a Market Entry Strategy in India, whereas in the UK, it used Franchising as a Market Entry Strategy. However, Starbucks does not have any franchise yet that it doesn't completely own. It has full ownership of every outlet. There are 45 franchisees in the UK and just 9 franchisers have the privilege to work with Starbucks. (How To Buy A Starbucks Franchise)

Starbucks In Japan In October 1995, Starbucks entered into a joint venture with Sazaby originating from Tokyo. This joint venture amounted to approximately $2.5 million. The Joint Venture was equally owned by Starbucks and Sazaby. Sazaby was believed to be a leader in bringing exclusive and unique goods to the Japanese people and had already developed a goodwill in the Japanese Market. (Starbucks Corporation (A),
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Many of these stores are operated by the company itself. The others are big retailers who stock Starbucks coffee and teas. Starbucks has entered into licensed agreements with these stores. Starbucks stores in the United Kingdom have been franchised to lower risks and improve efficiency. Total revenues from licensing fees and royalties accounted for only 9% of Starbucks’s revenues in 2013. Starbucks mostly owns its stores so that it can keep complete control over customer service and quality of product, which have been its characteristic features. Starbucks’ operating margins have hovered around 12% between 2008 to 2013, mainly due to the load of controlling all its operations directly throughout the World. For its most recent quarter, the company reported 9.4% year-over-year (YoY) However, Starbucks has a number of solid reasons for retaining store ownership. The company’s revenues have grown at an average annual rate of 9.2% in North America from 2010 to 2013, and 22.4% in China and the Asia Pacific. The company is looking to expand aggressively in this region. Its operating margins, are not as high as they could have been, because it did not franchise a sizable number of its stores, but are still healthy and established, keeping in mind that the effects of the 2008 financial crisis have yet not vanished. Starbucks falls under another league altogether: its main offering, coffee, is frequently touted for health purpose. The
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