Starbucks Strategic Issue in 2008, Term Paper

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Thus, achieving market saturation in Asia will give Starbucks a sustainable competitive advantage in those markets.

Implementation

To implement the recommendation, Starbucks should invest more of its money into the partnerships that are running the Starbucks franchises overseas. These firms need to be compelled to expand more rapidly and Starbucks should be willing to provide financial and logistical assistance if necessary.

The firm should double the pace of new store openings in Japan, China and the United Arab Emirates. They should also investigate other large markets, such as India. India has many of the same market characteristics of China. It has a large middle class in the hundreds of millions. India's cities are densely packed, necessitating the need for a "third place.

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" The nation's middle class looks to the West for cultural guidance, as do the Japanese. And while India is a tea-drinking nation, so are China and Japan. Thus, Starbucks has the experience now with respect to finding ways to attract tea-drinkers to its coffee shops.

Lastly, Starbucks should not ignore the domestic market to expand more aggressively into Asian markets. The domestic market, however, offers less potential in the future than do the Asian markets. Thus, Starbucks should divert resources from opening stores in North American (900 new stores have closed or will close quickly) towards opportunities in Asia.

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