International Business Strategy Essay Example | Topics and Well Written Essays - 1750 words - 1

International Business scheme - Essay ExampleHoward Schultz turned come out of the closet to be the see success factors of the lodge. Such decision is discussed in this section. Product diversification to client surgical incision (Explanation Using Ansoff Model) Throughout the 90s and the 00s In order to target new customer segments Starbucks decided to go for product diversification. In 1994 Starbucks and PepsiCo entered in to a joint venture, which is now known as the North-American Coffee Partnership to sell product closely related to coffee in cans and bottles. Thus the Starbucks catered to a whole new customer segment. In 1998 the company allowed Kraft foods to become a licensed provider of the Starbucks ground coffees and whole bean across US. In this case Starbucks ensured product quality, while Kraft foods took plow of promotion and distribution. In 2008 Starbucks struck a partnership with Apple iTunes and started providing pick of the week music taunt in the 7000 store s (Henry, 2008, p.131). The diversification strategy can be well explained by using the Ansoff Product storage-battery grid matrix. The four key elements of the product matrix grid are market penetration, Market information, Product Development and Diversification. Among these Starbucks went for diversification as the company launched new product in a new market. Here it may be added that although Starbucks provided new products, but the core product remained the same. Rather the company went for augmentation. This also meant that the company apply concentric diversification instead of conglomerate diversification, because the company added new product s hat was interchangeable in nature keeping the core product i.e. Coffee in mind. Store Expansion Strategy to achieve Market Expansion (Explanation Using Different Market Entry Modes and Strategic Actions) Even in the lead becoming the President and CEO of the company Mr. Schultz had a vision to expand the business of the compan y. This was one of the key reasons for which Mr. Schultz bought the company. In the early 90s the company began the geographic market expansion strategy. The management of the company decided to work on a hub and spoke model to expand the market. In this case the major cities acted as a hub. It had specialist aggroups of professionals located in the hub. As a number of stores opened in the hub the company decided to open additional stores in the surrounding cities. The stores in the surrounding cities were monitored by the team of professional located in the hub cities. Due to such strategies very soon the company had a concealment of retail stores in the major as well as surrounding cities of the country (Wenderoth, 2009, p. 145). In the middle 90s as a part of the expansion strategy the company got in to licensing agreements to poke out those locations where the company may not able to have own outlets. The company entered into a licensing agreement with Marriot military int ernational hotel operates in airport locations. Once the company had established a strong store net income in United States the company decided to venture internationally. There were various options available in effort of the company which