The year 1995, having established about 700 stores in the United States alone, Starbucks coffee house actively began exploring existing foreign opportunities. Despite having initially resisted using a franchising strategy during its expansion into North America, where most of its stores are actually company owned, Starbucks opted to enter into the Japanese market by implementing a strategy that would see the company license its format in the country (Aswathappa, 2010). Starbuck coffeehouse was seen to be increasingly worried that the pure license agreement that it was using would ultimately lead to its loss of the necessary control that was vital in ensuring that all its various licensees would strive to follow the time-tested formula that had been successfully implemented in the United States market with very positive results.
It was perceived that Starbucks feared that if these foreign licensees did not keenly follow the laid out Starbucks formula, the company’ s first venture into these foreign markets would eventually be less successful as compared to how the company hoped the ventures would be. The Starbucks Coffeehouse company was also concerned that their Japanese Licensees would not be able to expand as rapidly as Starbucks wanted.
The quick expansion is one of the company’ s strategies, the expansion allows new customers to quickly build up customer habits while Starbucks’ Coffeehouse Company is still trendy (Enz, 2010). As such, Starbuck’ s Coffeehouse Company was apprehensive of licensing as licensing would cause the coffeehouse company to have limited control of the company’ s expansion rate (Drexler, 2007). The term “ Starbucks success formula” is a casual reference to the company’ s basic success strategy of always ensuring that the various Starbucks shops only sell the company’ s very own premium roasted coffee beans.
These coffee beans should be sold alongside various freshly brewed espresso-style beverages, teas, coffee accessories and pastries. The various Starbucks coffee houses should ensure that they always do this from a tastefully designed coffee house setting irrespective of the location of the coffee house.
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