The Starbucks Threat

1. What are Starbucks CSAs and FSAs? How do these advantages explain the chain’s success in the United States?

Starbucks is a company that believes that great product and service are the keys to great success. It is extremely important in their firm that they have this attitude throughout the organization and every shop they open. Having their coffee shops in the United States is an advantage in itself. There are many opportunities here in the United States, and Starbuck has taken advantage of this. Most of the citizens in the United States are on the go people. With Starbucks offering many different coffees and espressos with the to go option gives the people what they want. Another thing that gives Starbucks an advantage in the States is their name. Starbucks is known all over the country for great coffee and service. The reputation that Starbucks has built for themselves speaks for itself all over. This has helped Starbucks be very successful in the United States.

2. How internationally mobile is the Starbucks concept? Any barriers to entry?

In the 1990s, Starbucks began expanding internationally in Japan, Hawaii, Singapore, the Philippines, Taiwan, Thailand, New Zealand, Malaysia, China, Kuwait, Korea, Lebanon, and the United Kingdom. This showed that Starbucks was aggressive in going international with their company, especially when new CEO pushed for more retail locations internationally in 2000. In 2004, Starbucks opened its first shop in Paris, whose culture is known as lovers of coffee (Johansson, 2009).

Although Starbucks was having luck with international shops and sales, there were some barriers to entry to overcome. In some countries, startup costs were extremely high in order to keep foreign companies from coming in and taking over. This forced Starbucks to weigh their options and determine if the startup costs would be worth it in the future. Another barrier was cultural resistance. Some cultures were against coffee to go and coffee in Styrofoam cups. This would cause sales to plummet if stores were opened in these regions. These barriers caused Starbucks to think about where the best locations were for international expansion when moving forward (Johansson, 2009).

3. Franchising would seem a natural entry mode for Star-bucks, but the chain sometimes owns the shops even abroad. What could be the explanation?

Franchising is a great method of entry for most companies because it allows you to grown and expand at a greater