Chapter 9 Assignment: Starbucks vs. McDonald’s Strategies | 1. How does Starbucks enter foreign markets? Do you agree with its rapid growth strategy? (Consider what has happened to the number of stores and locations during the last few years in answering this question). Consider where Starbucks is located, and markets that will be advantageous to Starbucks in the future in answering this question. Discuss how Starbucks entry approach is different/similar from strategies that McDonald’s uses to enter foreign markets. Are both companies currently competing head-to-head in certain markets? Explain. Be specific in your explanation and consider recent press releases and information from annual reports in responding to these questions. (9 points)
Starbucks expands into global markets through joint ventures. A joint venture is, “an agreement under which two or more partners own or control a business” (Luthans & Doh, 2012 p. 625). Two businesses partners come together to pursue the same goal and opportunity. Starbucks entered a joint venture with Tata Global Beverages to begin opening and operating Starbucks cafes throughout India. An article titled Strategies for Researching Global Markets says, “In the U.S. close to two-thirds of Starbucks cafes are owned by Starbucks while outside the U.S. about two-thirds of their stores are partnerships” (Virginia’s Community Colleges, p. 1). We agree that Starbucks rapid growth strategy to join international joint ventures is beneficial. With a joint venture in foreign markets Starbucks gains improvement of efficiency, access to knowledge, mitigating political factors, and overcoming collusion or restriction in competition. Starbucks is able to align themselves with partners who already have knowledge of what it takes to run a business outside the United States. Joining a joint venture can also help Starbucks