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

International Business - Starbucks - Essay ExampleThis has been the key reason, according to the case study, that managers in Starbucks unyielding to use alternative internationalization strategies that could protect the slosheds interests more effectively. The inappropriateness of licensing, as the core internationalization strategy of Starbucks, can be dumb 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 intellectual airplane propeller of an other party paying compensation in the form 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 business skills (Czinkota et al. 2009, p.244). In general, lice nsing has related to the following benefits there is no need for capital investment, comp ard to other internationalization agreements (Czinkota et al. 2009). ... The licensing agreement is considered as an ideal strategy for testing foreign markets as of their potential to offer high profits (Cherunilam 2010). After testing a foreign market using the licensing agreement the licensor may decide to proceed 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 obedience to a specific product/ services before proceeding to the further promotion of this product/ service in the particular market (Stonehouse et al. 2007). Managers in Starbucks credibly used initially the licensing agreement as a first tool for checking the perspectives of markets worldwide. It seems that the firm would prefer to avoid investing funds on internatio nalization 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 anaesthetic 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(prenominal) 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