Franchising Starbucks in South America
Starbuck is one of the most well-known brand in the world with a huge number of stores worldwide.
Current growth strategy
- The development based on an internal growth strategy. In fact, Stacrbucks employs 182000 employees all over the world who are always well-cared by the company.The vast majority of stores are company owned and company runs.
- Within 27 years, it is estimated that Starbucks opens two stores a day on average. The number of stores in UK and US is quite tremendous (700 stores in UK and 6700 stores in US).Thus, the coffee market in these two countries are believed to reach saturation in the near future.
- Up to now, Starbucks has operated more than 20 000 stores in 65 countries. They are focusing on a fast-developing region: South America
Franchising
- According to Peru this week, by the end of 2015, Starbucks aims the target of operating 100 stores in Peru. A new strategy is applied instead of owning and operating stores, Starbucks is seeking to expand by rising a franchise model. Both company and franchises have advantages:

Challenge
According to opening in new market, the company has to face 2 key challenges: 1. Conduct market research to access both customer preferences and potential of market 2. Focus on building brand awareness and customer loyalty.
It means that to make profit in a new market, the company has to have a huge investment on marketing.
PEST Analyse
Political influences: Political issues in Peru is still complicated as corruption and excessive bureaucracy are widely ripe. They tend to adopt strict regulation so as to increase costs and stop companiesfrom potential and profitable opportunities.
Economic influences: In the past,hypeninflation destroyed economy but it has recovered stability and GDP rate has grown. Ultimately, living standard and incomes are also stable.