Starbucks' Foreign Direct Investment Case Study Example | Topics and Well Written Essays - 500 words

Starbucks' Foreign Direct Investment - Case Study Example rbucks experience† in a foreign country, the company decided to consider entering into a â€Å"joint-venture† agreement with the foreign business partners. By doing so, it was easier on the part of Starbucks to transfer its business culture and practice to Japan. This was done by instructing some American employees to train the newly hired workers in Japan. By teaching the foreign workers on how Starbucks is making their coffee, the company was able to extend the Starbucks atmosphere in a foreign land. Starbucks decided to enter into a joint-venture agreement with its pre-selected foreign business partners. As a common knowledge, Starbucks is new in a foreign country. Therefore, it would be very difficult on the part of Starbucks to gain sufficient knowledge about the business licensing requirements in Japan, its existing labor policies, and the business culture in Japan among others (Morrison et al., 2008, p. 56). By taking advantage of the joint venture agreement, it will be so much easier on the part of Starbucks to learn more about the Japanese market. Likewise, joint-venture will also help the company remove barriers related to cultural and language differences (Kreitner & Cassidy, 2011, p. 96). Without losing Starbucks’ control over its foreign business partner, the joint-venture agreement will make it easier for Starbucks to establish a strong business relationship with its potential suppliers. Q.3 What are the advantages of a joint-venture entry mode for Starbucks over entering through wholly owned subsidiaries? On occasion, Starbucks has chosen a wholly owned subsidiary to control its foreign expansion (i.e. in Britain and Thailand). Why? Among the advantages of joint-venture agreement includes allowing Starbucks to share the risks of operating its business in a foreign market like the Britain and Thailand (Schermerhorn, 2010, p. 383). In case Starbucks’ target consumers in a foreign land do not patronize Starbucks’ products and services, the