1. RESUMING INTERNATIONALIZATION AT STARBUCKS Group:2 Aravind Uppala 122 Dasari Pradeep 126 Sangam Lalsiva Raju 138 Rajesh Mishra 151

2. PACE 1/PERFORMANCE YearPacePerformanceReason1993ModerateLowIncrease of assets 115% led to second roasting plant estb1997&98HighModerateAcquisition of Seattle, added 65 stores2001High10.85%75% Of pace from Europe2008LowLowGlobal recession & Increase in price of coffee 3. REGULARITY PERFORMANCE YearRhythmPerformanceReason2006-09More regular than 2002-05Lesser than Global ROA of 2002-05 economic recession & Competition 4. SCOPE 1/PERFORMANCE YearScopePerformanceReason1998HighModerateAcquisition of Setattle coffee2008&09LowLowGlobal economic recessionTHREE MOTIVES TO GO ABROAD Industry-based view: increase profitability, and the target countries chosen usually have real potential in size of population and with high disposable income (western nations had great impact on Americanization) 5. Resource based view: purchasing only the highest quality of coffeebeans from ideal coffee- producing climates. ( upgrading its SCM) it makes starbucks price and quality more competitive ( differentiation strategy) in the new markets and world wide coffee industry. Unique strategy of key locations helps to attract foreigners. This promotes starbucks brand image and raises prominence. Institution bases view: shareholders expectations for high returns, as domestic market is saturated , the managers are pressurized by the shareholders to internationalize thus analyzing coffee industry in order to leveraging their core competence. MAIN REASONS: reaching saturation point in U.S High potential of new emerging markets Brand recognition in many countries Customer loyalty and security in the SCM 6. STARBUCKS- TOO AGGRESSIVE ???? One of the best ways to increase market share is to internationalize (started doing when the home market become saturated in 1996) Lots of countries lots of shops lots of countries many shopsless countries less shops But, after fast internationalization starbucks always back off to slow the pace, rhythm and scope to do its market penetration in existing markets and market development in new markets. Localizing starbucks provides new products to cater different cultures of countries by product development strategy. But, strabucks is criticized for growing too fast which led to decrease in product quality and company image, cannibalizing turnover in closely located stores, driving out small independent competitors International StrategyGlobal standardization strategyLocalization Strategy 7. How should Starbucks approach internationalization going forward ? Mergers and collaboration for expansion proved beneficial in thepast. We recommend that Starbucks continue to work with McDonalds to prevent cannibalization. Improve the service and experience within each existing store instead of focusing on geographic spread. Need to explore countries with the highest per capita coffee consumption. Consider penetrating the hospitality markets globally through hotel chains (Marriot, Hilton) which offer in room brewing as well as hospitality counters in the main foyers. Already have a presence in many airport terminal locations and could continue to expand in this way. When entering a foreign market, Starbucks' strategy was to retain its core service and product offering as much as possible, while adapting to local demands in the host country. I think this is a good way to survive in foreign markets. They have to follow this policy.