Ans1.

The idea for the original Starbucks format came from the company’s director of marketing at the time
right after Howard Schultz came back from an abroad trip Italy. He was influenced mainly by the Italian
coffeehouse experience and convinced the CEO at the time to experiment with the format. Lesson for
international business can be drawn from this scenario that due to travel outside of own country one can
learn different business strategies. Business idea can be found in any nook and corner. Also, people can
adapt with new culture anywhere in the world. Due to globalization in the world cross culture adaption is
becoming very normal and for the business people it is a great opportunity to improve their business. We
can also see that in business we can often find inspiration from abroad so it is best that we look towards
the global market for ideas and incorporate those ideas into a current business model to make profit.

Ans2
Starbucks started to expand internationally when their format led to spectacular success in the USA and it
became one of the best known brands in the country in a decade. The strategy of selling companies own
freshly brewed coffee along with varieties of pastries have become successful and people liked to hang
around in the coffeeshop. This idea has become so successful that people from all over the world wanted
to experience it. Therefore, the they had opened up 700 stores already and had very little remaining
options for new stores in the U.S and then they opened in Japan as a joint venture with a local retailer
Sazaby Inc. By opening stores in Japan they were able to open their company to new markets and have
the potential to increase profit. By expanding internationally, they create value for the shareholders by
increasing the value, and profitability of the company. Starbucks idea of cost effectiveness also added
value for the sharholders. This makes the stock of Starbucks rise and makes shareholders happy. Being
known as an international brand it adds value more because as a customers anyone would like to have a
touch of taste to that.

Ans3
I think a joint venture with a local company to launch starbucks initially in Japan was a smart move. It will
reduce a lot of work for branding in foreign market as well as it will reduce the cost. As a big local retailer
Sazaby Inc already had its own customer group. Starbucks easily penetrated the market with Sazaby’s
existing customers. It saved a lot of advertising and promotional costs. Aditionally, by joining venture
starbucks would naturally gain good reputation in the beginning and earn trust to the customers. It is
always better to introduce the brand locally no matter how good the brand is and its origin. It also
reduced its risk to 50 by sharing its business. Also, when entering to a county the culture is unknown to
the brand so joining as a venture can be an advantage to starbuck. Though Starbucks had revolutionized
the way americans consumed coffee in United States, it remained inexperienced on an international level.
So joining as a venture can be an advantage for both companies and this could serve as a valuable model
for conducting international business.
Ans4
Starbucks is a force of globalisation because it has expanded worldwide and is bringing American
ideals with it. Going to Starbucks was an American thing, but as it expanded it became a worldwide place
to gather and drink coffee. Through its expansion Starbucks brought American culture to many other
places by changing the way that people drink coffee. This not only unified the customers but also the
people working behind it. People from all different cultures are unified because of Starbucks. It promotes
the economic communication among different countries. By joining venture it also enable campanies to
learn about each other about the way their culture works. The international expansion not only brings its
own culture and its cooperative companies of benefit but also makes a huge impact on many corporations
globally. It is a prime example for other companies to follow and expand globally.

Ans5
Fair trade places restriction on farmers and producers. It forces them to pay minimum wages, adopt safe
working conditions. On the other hand, free trade removes all boundaries for all parties. It affords
unfettered international export and import free from all taxes, tariffs, worker protection or pesky
minimum wages. Globally, fair trade make things more expensive and earn more, free trade makes things
cheaper and earn less. In 2000 starbucks started to purchase fair trade certified coffee. The goal was to
empower small scale farmers organized in cooperative to invest in their firms and communities, to protect
environment and develop business skills necessary to compete in the global market. By following trade
policy starbucks created the positive public relation. It benefits them by giving them a more positive and
environmentally friendly image as a company. Customers will further trust starbucks for its responsibility
to benefit farmers. This affects company’s overall performance greatly and accomplish a corporate social
activity as well.