1.Where did the original idea for the Starbucks format come from?

What lessons from

international business can be drawn from this?

The idea for the original Starbucks format came from the company’s director of
marketing at the time, Howard Schultz, after he came back from an abroad trip to
Italy. He was influenced by the Italian coffeehouse experience and convinced the
CEO at the time to experiment with the format. From this example we can see that in
business we can often find inspiration from abroad, it is best that we look towards the
global market for ideas and incorporate those ideas into a current business model to
profit.

The idea for the original Starbucks format came from the company's marketing
director at the time, Howard Schultz, after returning from Italy, from an overseas tour.
He was inspired by the experience of the Italian coffeehouse and persuaded the CEO
to try with the format at the time. From this example, we can see that we can always
find inspiration from abroad in business, it is best to look at the global market for
ideas and integrate those ideas to benefit in a current business model.

2. What drove Starbucks to start expanding internationally? How is the company

creating value for its shareholders by pursuing an international expansion strategy?

Starbucks expanded to Japan because it had exhausted its market in the U.S. They had
opened up700 stores already and had very little remaining options for new stores in
the U.S. By opening stores in Japan they were able to open their company to new
markets and have the potential to increase profit. By expanding internationally they
create value for the shareholders by increasing the value, and profitability of the
company. This makes the stock of Starbucks rise and makes shareholders happy.

As it had depleted its business in the United States, Starbucks extended to Japan. They
had already opened 700 stores and had very few remaining options in the U.S. for
new stores. They have been able to open their business to new markets by opening
stores in Japan and have the ability to raise profits. They produce value for
shareholders by growing the company's value and profitability by expanding globally.
This raises Starbucks' inventory and makes shareholders happy.

3. Why do you think Starbucks decided to enter the Japanese market via a joint
venture with a Japanese Company? What lesson can you draw from this?

Though Starbucks had revolutionized the way americans consumed coffee in United
States, it remained inexperienced on an international level. Partnering with a well
established Japanese retailer would allow them to be more successful in making the
American Starbuck experience appealing to the Japanese. Furthermore, Starbucks
would minimize the risk, because “the starbuck format was licensed to the venture”
and they would be responsible for its expansion in Japan. Since both companies we
incredibly successful in both expansion and creating profits, this could serve as a
valuable model for conducting international business.

While Starbucks had revolutionized the manner in which Americans consumed coffee
in the United States, it remained globally inexperienced. Partnering with a well-
established Japanese retailer would allow them to be more effective in making the
Japanese to b hooked to the American Starbuck experience. In addition, because "the
starbuck format was licensed to the venture" and they would be responsible for its
expansion in Japan, Starbucks would reduce the risk. This might serve as a valuable
model for conducting foreign business, because both businesses are extremely
successful in both expansion and profit growth.

4. Is Starbucks a force for globalization? Explain your answer.

Starbucks is a force of globalisation because it has expanded worldwide and is

bringing American ideals with it. Going to Starbucks was an American thing, but as it
expanded it became a worldwide place to gather and drink coffee. Through its
expansion Starbucks brought American culture to many other places, by changing the
way that people drink coffee.

As it has spread globally and takes American ideals with it, Starbucks is a force of
globalisation. It was an American thing to go to Starbucks, but it became a worldwide
place to meet and drink coffee as it spread. Starbucks has taken American culture to
many other countries through its globalization, changing the way people drink coffee.

5. When it comes to purchasing coffee beans, Starbucks adheres to a “fair trade”

program. What do you think is the difference between fair trade and free trade? How
might a fair trade policy benefit Starbucks

The difference between fair trade and free trade is that fair trade puts restrictions on
the factors of production of a product. These restrictions may do things like protect
worker’s wages and make sure working conditions are safe during the production
process. Free trade, however, reduces barriers between countries creating a more open
market where products can be more easily traded. Starbucks adheres to a fair trade
policy, which benefits them by giving them a more positive and environmentally
friendly image as a company. It also raises the working conditions of those they buy
their products from and “empowers small scale farmers” which helps to ensure future
business from those people and organizations

The distinction between fair trade and free trade is that the variables in the production
of a product are limited by fair trade. Such restrictions will do things such as
maintaining the salaries of employees and ensuring that working conditions are secure
during the manufacturing process. However, free trade eliminates barriers between
nations, creating a more competitive economy in which goods can be traded more
easily. Starbucks adheres to a fair trade policy that benefits them by giving them an
reputation of a business that is more optimistic and environmentally friendly. It also
improves the working standards of those from whom they purchase their goods and
"empowers small-scale farmers," which allows those individuals and organizations to
ensure future business.