Q1

:I
ni
ti
al
l
yStar
buc
kse
xpan
dedi
nt
ern
ati
ona
ll
ybyl
i
cen
si
ngi
tsf
orma
ttof
ore
igno
per
ato
rs.
Its
oonb
eca
med
is
enc
han
ted
wi
tht
hi
sstr
ate
gy.
Why?

S
tarb
ucksneedstomeettheexpecte
ds t
andar
dsofcust
ome rscannotdosocauseofl
ackincontroli
nthef
orei
gn
s
tore
s.Withli
cen
sin
gagreementsdepr
ivei
ttheri
ghtofke
ep i
ngas tr
i
c tcon
trol
onfore
ignma rk
etope r
ati
ons
.
S
tarb
ucksi
sinarushtoexpandthei
rmarketbu
tli
cens
eeslacktheabil
it
ir
storepl
i
cateorme etth
ere qui
r
edstan
dar
dsby
t
hecorpo
rati
onareasonsh
ifti
ngtojoi
ntvent
urean
dwh ol
l
yo wn edsubsi
di
ar
iesi
nste
ad.Starbuckswa n
tsuni
f
orm
b
etweeni
tslocal
stor
esandinter
nati
onals
tore
s.Theysen
tt hei
rexperi
ence
dlocale
mploye
e stot r
ainfo
rei
gnst
ores
t
hatwil
l
me ett
hec o
rpora
ti
o n'
sstan
dard.Thepur
poseofthes hi
f
tinbusi
nessar
rang
ementswa stog ai
ncont
rol
onthe
o
perat
ion
ssot ha
tthecust
o merswereprovi
dedaexpe
ctedan dexce
ll
e n
tcoff
eeexper
i
encea tal
ltheoutl
et
sacros
sthe
g
lobe
.

Q2:
Whydoyo
uthi
nkSt
arb
uck
sha
sno
we l
ect
edtoe
xpandi
nt
ern
ati
ona
ll
ypr
i
mar
i
lyt
hro
ughl
oca
lj
oi
ntv
ent
ure
s,t
owh
om
i
tl
ic
ens
esi
tsf
orma
t,a
soppos
edt
oapur
eli
cen
si
ngs
tra
tegy
?

St
arb
uckst r
ansi
ti
onstoj
oi
ntven
turesbecau
seo ft
wor e
asonsth
elackofcont
rol
onforei
gnoper
ati
onsandli
mi
ted
kn
owledgeaboutthel
oca
lmar
ket.Starb
uckscansharet
hethecos
tsa n
dri
sksdeve
lop
ingi
tsf
orei
gnma r
ketswith
pa
rtn
ers.S t
arb
uckscanha
veaccesstol
ocalkn
o wl
edgethr
oughpa
rtner
sandcanadap
tp r
oduc
tio
n.Havi
ngk n
owledge
ab
outthelocal
ma r
ketwi
l
lmaket
h ecorpor
ati
onles
senit
sfai
l
urer
iskandwasabl
etoprese
ntthecus
tomerswiththe
be
stcoff
e eexp
e r
i
enceth
atmeet
st hei
rexp
ectat
ions.Pa
rtn
eri
ngwithal
rea
dyesta
bl
ish
edfi
rmsinth
erespecti
ve
mar
ketsthrou
ghjoi
ntven
tur
esmadeS ta
rbuc
ksab l
etoexpa
ndinf
oreig
nma r
ket
ssucces
sful
l
y.

Q3:Whatar
etheadv
ant
ageso
fajoi
nt
-ve
ntu
reen
trymodef
orSta
rbu
cksove
rent
eri
ngt
hro
ught
hewhol
l
y-owne
d
su
bsi
di
ari
es?onocca
si
on,
Star
buc
kshasc
hose
nawh o
ll
y-
owneds
ubsi
di
ar
ytocon
tro
li
tsf
orei
gne
xpa
nsi
on(
eg:i
nBr
it
ai
n
an
dT h
ai
lan
d).
Wh y
?

T
hrou
ghb u
sin
essjoi
ntventu
resStar
buckscantakea d
vanta
geo fs
har
ingth
eris
ksa ndcostswi
thal
o c
alpar
tnerwhen
e
nter
in
gafo r
ei
gnma r
ke t
.Thecomp a
nycanlear
na ndunde
rsta
ndmo r
ea b
outthel
o cal
ma r
ket,
peopl
e,cu
lt
urethr
ough
t
hegui
deofloc
a l
par
tner'
sknowled
gea n
de x
pe r
i
ence.Withthehel
pof al
ocal
comp any
,itcane
xpandSt
arbuck
s
e
conomi
cc ap
abil
i
ti
es.E v
enjoi
ntvent
urehadli
mite
dc ontr
oli
tisst
il
lg
iveSta
rbucksabi
li
tytocont
rola
ndma n
agedthe
l
oca
lsto
res.Star
buckswa n
ttoe s
tabl
is
hthei
rstoresqui
ckl
yingl
obalmar
ketstha
tswh ytheypr
efe
rwho l
l
yown
s
ubsi
dar
ies
.On erea
sonwh yStar
buckssel
ectswholl
y-ownedsubs
id
arybecaus
ethereisal
read
yawe l
les
tabl
is
hed
c
off
eechai
no u
ttherethati
sverysi
mil
artothei
rsthatif
theyaqui
r
esitmakeseasi
ertoe nt
erth
ema r
ketasi
teli
mina
tes
t
hedi
ff
icul
t
yo fpr
esenti
nganewp r
o d
uct.Theotherreaso
nisthej
oin
tv e
ntur
ed o
n '
thavethemean
so fca
pit
alf
o r
e
xpans
ionofSt
a r
bucks.Aqui
ri
ngthel
ocalcompanyg i
vemorecont
roltoSta
rbucksonex p
ansi
onst
rat
egyinth
ea r
ea.
Q4
:Wh
ic
hth
eor
yof
FDI
bes
tex
pl
ai
nst
hei
nt
ern
ati
ona
lex
pan
si
ons
tra
teg
yad
opt
edb
ySt
arb
uck
s?

S
tarb
ucksadop
tedInt
ern
ati
onal
theor
y.Theyhadaha
rdti
mewithl
ice
nsi
ngthatdoe
sntgi
vethemf
ul
lcon
tro
lofth
e
o
preat
io
ns.Als
otheli
cens
eedoesntha
vetheprer
equ
isi
te
saccept
abl
ebythec o
rpor
ati
on.Thi
smadet
hedeci
si
onto
s
hi
fttof
o r
ei
gndir
ecti
nvest
ment.Sta
rbuc
kswa nt
edtohav
eac on
tro
loveri
tsbusi
nes
sstra
tegya
ndoper
ati
onsi
nord
er
t
oma i
nt
ainbr
andandpro
ductqu
a l
i
tyi
nter
nati
onal
l
ytobeseenbydi
ff
ere
ntcul
turean
dpeopl
einsa
megoodway,to
c
ontai
ni
tsworkethi
corhabi
tsandwaysofbu
sine
ssacr
ossth
eglob
e.