International Business - Starbucks Essay Example | Topics and Well Written Essays - 3000 words

world-wide Business - Starbucks - Essay ExampleThis has been the key reason, according to the case study, that managers in Starbucks decided to use substitute(a) internationalization strategies that could protect the degenerates interests more effectively. The inappropriateness of licensing, as the core internationalization dodging of Starbucks, can be understood by referring to the characteristics of licensing. Licensing, as a strategy for expanding internationally, can offer a series of advantages. In fact, licensing is considered as one of the most popular internationalization strategies (Czinkota et al. 2009). In the context of licensing a party can uses knowing property of another party paying compensation in the material body of royalty (Czinkota et al. 2009, p.244). The intellectual property the use of which can be allowed to third parties, under compensation, can vary, incorporating patents, trademarks and commerce skills (Czinkota et al. 2009, p.244). In general, lic ensing has related to the following benefits there is no need for capital investment, compared to other internationalization engagements (Czinkota et al. 2009). ... The licensing agreement is considered as an ideal strategy for testing foreign grocery stores as of their potential to offer high mesh (Cherunilam 2010). After testing a foreign market using the licensing agreement the licensor may decide to survive to a full-entry in the particular market, in case that prospects for high growth are identified (Cherunilam 2010). In other words, the licensing agreement can be used as a means for checking a markets prospects in regard to a specific product/ services before sustaining to the advertise promotion of this product/ service in the particular market (Stonehouse et al. 2007). Managers in Starbucks probably used ab initio the licensing agreement as a first tool for checking the perspectives of markets worldwide. It seems that the firm would prefer to avoid investing propert y on internationalization agreements in regard to markets the potentials of which were unknown. After testing these markets, the firms managers were ready to proceed to the next phase, i.e. to develop internationalization strategies that could offer full control over the firms intellectual property. At this point, reference should be made to the following fact the company had used licensing only in Asia, probably aiming to explore the local markets potentials in terms of the firms products. In Canada, the expansion of the firm was arranged differently the owners of Starbucks bought the stores in Canada so that a full control is secured. Of course, the use, directly, of another internationalization strategy in Canada was feasible, since the firms owners could have a better view of the particular markets prospects, meaning that there was no need for testing the Canadian market in regard to its responses to