The globalization of StarbucksThirty years ago, Starbucks was a single store in Seattles Pike Place Marketsellingpremium-roastedcofee. Todayitisaglobal roasterandretailerofcofeewithsome!,"##stores, $#percent of whicharein%#countriesoutsidethe&nitedStates. Starbucksset out onitscurrent courseinthe'(#swhenthecompanysdirector of marketing, )owardSchult*, cameback from a trip to +taly enchanted with the +talian cofeehouse e,perience.Schult*, who later became -./, persuaded the companys owners toe,periment with the cofeehouse format0and the Starbucks e,perience wasborn. The strategy was to sellthe companys own premium-roasted cofeeand freshly brewed espresso-style cofee be1erages, along with a 1ariety ofpastries, cofee accessories, teas, and other products, in a tastefullydesignedcofeehousesetting. 2romtheoutset, thecompanyfocusedonselling a 3third place between work and home4 e,perience, rather than 5ustthecofee. Theformulaledtospectacular successinthe&nitedStates,where Starbucks went from obscurity to one of the best-known brands in thecountry in a decade. Thanks to Starbucks, cofee stores became places forrela,ation, chattingwithfriends, readingthenewspaper, holdingbusinessmeetings, or 6more recently7 browsing the 8eb.+n ''%, with "## stores across the &nited States, Starbucks began e,ploringforeign opportunities.9ppro,imately ( years ago, in the mid-''#s,Starbucks opened up their :rst location outside ;orth 9merica< =apan.Thecompany established a 5oint 1enture with a local retailer, Sa*aby +nc. .achcompany held a %# percent stake in the 1enture, Starbucks -ofee of =apan.Starbucks initially in1ested ># million in this 1enture, its :rst foreign directin1estment. The Starbucks format was then licensed to the 1enture, whichwas charged with taking o1er responsibility for growing Starbucks presencein =apan.Today, Starbucks =apan has become the largest cofee chain in =apan with amarket share of $(.#?. Their aggressi1e e,pansion plan pro5ects a goal of#? annual growth in their locations not to mention, re1enue has grown by$."?inthepast :1eyears. +t seems that morethanafew=apaneseconsumers are choosing Starbucks o1er the other cofee shops, like @etour,Saintmarc, or Tullys -ofee .+ts clear that Starbucks =apan is a great successstoryA and the secret may lie in the balance Starbucks has found betweenmaintaining the trendiness of being an 9merican brand and adapting to the=apanese market.2irstly they ha1e managed to identify certain cultural shiftsA the country wasslowly mo1ing away from certain traditions of collecti1ism towardsindi1idualism. 2or global brands such as Starbucks, this change in 1alues hastranslatedintomanypersonswhocanbothafordandwishtobeseenconsuminganupscalecofee-baseddrinkinitsown distincti1e packagingandcup, Starbucksbeingmerelyone8esternlu,uryorstatusbrandtowhich people can aspire. 2or at least as long as the no1elty or cachet of sucha famous 9merican brand is in efect, many young people are willing to breakwith any traditions of 1isiting teahouses or =apans pre1iously e,istingcofeehouses, thelatterofwhichStarbucksdiferedfromgreatlybybeingclean, smoke-free, family-friendly, andwell lit. Secondly, althoughcertainculturalchanges were noticed but those were not enough to support suchforeign 1enture and while many businesses fail to understand the e,tent towhich=apaneseculturecherishestradition, Starbuckshastakenthee,trastep to become familiar with =apanese culture. 9n e,ample is the importanceof top Buality customer ser1ice in =apan. Starbucks has also remo1ed theirsignature ser1ice of asking for a customers name when writing down theirorder as a result of the =apanese highly 1aluing their pri1acy. To address the=apaneselo1eoftraditionandnational festi1als, Starbuckshasde1elopedlimited-time seasonal drinks such as the Sakura 6cherry blossom72rappuccino. They ha1e also implemented 3concept stores4 that arespeci:cally designed to complement the atmosphere of certainneighborhoods,and whose product oferings ha1e been changed to reCect=apanesetraditionmorethoroughly./ntheotherhand, tomakesurethe=apanese operations replicated the 3Starbucks e,perience4 in ;orth 9merica,Starbucks transferred some employees to the =apanese operation.The licensing agreement reBuired all =apanese store managers andemployees to attend training classes similar to those gi1en to &.S.employees.TheagreementalsoreBuiredthatstoresadheretothedesignparameters establishedinthe&nitedStates.Thus it couldbesaidthatStarbucks has successfully managed to combine their e,citing 9merican Cairwith the underlying 1alues of the =apanese to create an unbeatablee,perience.9fter =apan, thecompanyembarkedonanaggressi1eforeignin1estmentprogram. +n 9sia, Starbucks most common strategy was to license its formatto a local operator in return for initiallicensing fees and royalties on storere1enues. +n ''(, it purchased Seattle -ofee, a Dritish cofee chain with!#retail stores, for >($ million. +n the late ''#s, Starbucks opened stores inTaiwan, -hina, Singapore, Thailand, ;ew Eealand, South Forea, and Malaysia.)ence it could be said that although originally they were concentrating onthe franchising method of e,pansion and licensing of its products, Starbuckslater pursued other options such as 5oint 1entures, wholly ownedsubsidiaries, and acBuisitions to retain tighter control o1er operations.9sithasgrownitsglobal footprint, Starbuckshasalsoembracedethicalsourcingpoliciesanden1ironmental responsibility. ;owoneof theworldslargestbuyersofcofee, inG###Starbucksstartedtopurchase2airTrade-erti:ed cofee. The goal was to empower small-scale farmers organi*ed incooperati1es to in1est in their farms and communities, to protect theen1ironment, and to de1elop the business skills necessary to compete in theglobal marketplace. +n short, Starbucks was trying to use its inCuence to notonly change the way people consumed cofee around the world, but also tochange the way cofee was produced in a manner that bene:ted the farmersandtheen1ironment. DyG##, some"%percent of thecofeeStarbuckspurchased was 2air Trade -erti:ed, and the company has a goal of increasingthat to ## percent by G#%.H&.ST+/;S. 8hat dro1e Starbucks to start e,panding internationallyI 8hat lessonfor +nternational Dusiness can be drawn from thisIG. )owcultureplayedadominant roleinStarbucksforeignoperationstaring fromchoosing location to entry mode to changed marketofering, e,plain J. 8hy do you think Starbucks entered the =apanese market 1ia a 5oint1entureI 8hat lessons can you draw from thisI$. 8hich theory of 2@+ best e,plains the international e,pansion strategyadopted by StarbucksI%. 8hen it comes to purchasing cofee beans Starbucks adheres to a fairtrade program. 8hat do you think is the diference between free tradeand fair tradeI )ow might a fair trade policy bene:t Starbucks