Is conservation international exploiting Starbucks why or why not?
In every organization, it is always a challenge to maintain effective processes in place for both in its people and its product, and Starbucks is one company that knows and handles it well. But, is conservation international exploiting Starbucks? In my opinion and based from my research and understanding, it is no. There are two main reasons for these: (1) the company has effective management control, and lastly, (2) the company also does efficient equity control in running its business, most specially in other territories. In terms of management control, there are two approaches that the company applies: shared entry mode and full control mode. In shared entry control mode, the company also makes sure that they also formed some partnership in offering and selling product, this helps them be known in performing business in other territories, but this does not mean that they would allow local companies exploit their business; it should only be done for marketing strategies.
The other mode of control is full control mode, where this is usually the way Starbucks works, they make sure that the processes are well implemented and put in place. They would even send their workers on site if needed in order for the business performs the right quality standards. In the second reason, equity perspective, just like in the management control mode, equity perspective also has two sub modes: equity control mode and non-equity entry mode, but before the company choose what mode to be done, extensive studies are being done by the company’s executives. In the equity entry mode, it is more of a joint venture, most especially if Starbucks sees that many competitors are present and market penetration is really difficult. So what they do is to form partnership and exportation of products are the only once being done. While non-equity entry mode, this is simply forming business in other territories, most especially if they see that superior quality product may be provided to that market. One of the most common approach done here is franchising, but Starbucks is always careful on its quality standards, with that they still would insist sometimes to have most of its people be assigned on site since these people are well trained about the processes, particularly in quality standards. There are some of the key areas that Starbucks does to prove that they are not being exploited in the international market or foreign territories when they do business, which also done when they study about the opportunities that they may be given by the foreign territory:
· Commitment and level of involvement in international business
· Always make sure to address technology issues
· Product type and product adaptation
· Product weight and size, in order to control inventory
· What effective after sales service needed to be perform
· Lastly, and one of the most important is market entry cost.
With all these information, it only proves that the company always makes sure that they are in control of the business and will not allow to be used by foreign market since this is where quality standard of the business is being affected. (The Company, 2008).
Alexandrides, C.G. & Bowers, B. (2005). Market Entry Strategies – Choosing A Foreign Entry Market Mode. Retrieved June 30, 2008, from http://www.tuckpartners.com/Iba/docs/marketing/mkt_entry_strategies_alex.pdf
The Company. (2008). Starbucks Corporate Website. Retrieved June 30, 2008, from http://www.starbucks.com/aboutus/overview.asp