Essay Instructions: Discuss how Starbucks downsizing in the USA impacts their global growth strategy.
Starbucks, the well-known coffee chain, pursues a very aggressive international strategy as it expands globally.
Please visit their web site and conduct research about their global expansion.
Note: There may be bandwidth restrictions prohibiting your use of Starbuck's website, if so it is OK to complete the assignment without it.
Assignment
Write a 3 page essay answering the following questions about Starbucks' global expansion strategy with a focus on China, and how Starbucks' downsizing in the USA impacts their global growth strategy:
1. What are some of the decision factors that Starbucks assesses?
2. What role does the Chinese government play in Starbucks' operations in China?
3. What are some of their entry strategies?
4. What strategic choices do they seem to make? Explain how downsizing in the USA impacts their global growth in China and elsewhere.
Go to the Library Portal in Coursenet to access: ( all links accessed 11/10/2010)
? Starbucks Calls China Its Top Growth Focus, Wall Street Journal, New York, N.Y.; February 14, 2006 from library portal via coursenet.
? Starbucks aims for new tier in China Cafes: Financial Times. London: February 14, 2006 from library portal via coursenet.
? The forbidden latte Business.view, Economist.com/ Global Agenda. London: July 17, 2007 p.1. from library portal via coursenet.
? n.a. (2009) "Starbucks pushes China sales with local brew"- Starbuck's in China grows while USA downsizes, accessed 11/10/2010, China Daily.
? Converting the masses: Starbucks in China http://www.globalpolicy.org/component/content/article/162/27615.html
Case 2 Assignment Expectations
? Write a 3 page report, include the following.
? State the problem(s) in the Starbucks case and module 2 materials.
? List and discuss the key international strategy and market entry issues faced by Starbucks and draw conclusions.
? List supporting references and cite sources.
? Please make sure to use APA style and to use an Introduction, Main Body, and Conclusions. Use Headings and Titles. Click here for Tips for Good Writing.
? Use appropriate writing style (organization, grammar, & spelling- see Writing Guidelines).
Tips for Writing the Case Paper:
? Please first read in-depth the background materials for this module
? Identify key concepts (of Strategy in Global Contexts), write a list, and study them
? Read the case in-depth and conduct additional research, if necessary
? Find facts in the case to match key concepts of global strategy that you had previously identified and studied.
? Develop arguments by applying the concepts of functions of management to facts in the case
? Again, use "Tips for Good Writing" and see Guidelines tab.
? See "library instructions".
A Global Strategy
Defining and understanding generic competitive strategies and formulating a strategy. How do managers deal with business on a global level contrasted with a domestic level in a rational and strategic manner?
Deciding upon a strategy in an international context presents many challenges. To do this, we begin by classifying the various approaches to overseas strategy. One way to do that is to divide strategies into the dispersed multidomestic, centralized international, integrated global, and transnational approaches.
Each approach has its own characteristics, imperatives, advantages, and disadvantages as follows:
The multidomestic approach locates the firm autonomously in separate countries; responds to national operational, product, and market requirements; and affords flexibility. It customizes products and marketing strategies to the local needs. It is advantageous when local pressures are high and cost pressures low. Philips NV uses the multidomestic approach.
The international approach transfers distinctive competencies to foreign markets; responds to national operational requirements and worldwide product and market requirements, and offers control, standardization, and choice locations for various functions that afford economies of scale. This strategy is appropriate when there is a high demand for that competency in a foreign country, while the need to customize it locally is relatively low. McDonald's Company is an example of an organization that uses an international approach.
The global approach responds to a low-cost strategy, with a standardized product and marketing worldwide. The costs of customization are thus avoided. This strategy does not apply to consumer goods markets. Intel Corporation is an example of an organization that uses the global approach.
The transnational approach is ideal; it customizes products and marketing strategies to local needs and demands; it transfers competencies; it takes advantage of cost savings. Caterpillar Inc. pursues the transnational approach.
Professor Michael Porter from Harvard University is a guru of strategic management. He is a major player in the field of strategy and established it as an essential business management discipline.
Michael Porter developed fundamental frameworks for use in strategic management, such as "Porter's Five Forces Model", "Generic Strategies", and ''The Porter Diamond" .
Required Readings
Ishida, M. (1999). Managing across borders:The transnational solution. International Labour Review, v138 n2, 201-207 from library portal via coursenet.
Sagebiel, N. (2009) Smart Communication Strategies in a Down Economy, accessed 5/23/2009 at:
Campbell-Hunt, C. (2000) What have we learned about generic competitive strategy; A meta-analysis, Strategic Management Journal, v21n2:127 from library portal via coursenet.