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Starbucks

After becoming the leading coffeehouse in America, Schultz took Starbucks into international markets. Starbucks had three objectives: to prevent competitors from getting a head start, to build upon the growing desire for Western brands, and to take advantage of higher coffee consumption rates in different countries (7). In opening coffeehouses abroad, Starbucks established joint ventures, selecting local business partners to help recruit talented individuals, set up supplier relationships, and understand market conditions. Attributes of each partner include shared values and corporate culture, strong retail experience, dedicated human resources, commitment to customer service, creativity, local knowledge, brand building skills, and strong financial resources (8). The chosen partner is granted the right to develop and operate coffeehouses throughout a defined region.
Asia was targeted first. By choosing a region in which there was not a strong base of coffee drinkers, Starbucks had a first-mover advantage and the opportunity to create a new perception of coffee, as it had in the United States. Schultz explained, “The maturity of the coffee market in Europe was very strong and was not going to change much over the years. The Asian market was in its developmental stage and we had an opportunity to position Starbucks as a leader in a new industry, and in a sense, educate a market about the quality of coffee, the experience, and the idea of Starbucks becoming the third place between home and work in those countries (9).”
Starbucks chose President Group as its local partner to expand into the vast Chinese region, splitting it into four markets: Taiwan, Shanghai, Beijing, and Southern China. The people of Taiwan enjoyed their first cup of Starbucks coffee on the island in 1998. Two years later, the people of mainland China shared in this experience with the opening in Shanghai (10).
Well-known to multinational corporations (MNCs) is the ‘One Face to China’ principle...