2. Global integration has significant impacts for firms such as Starbucks that have built a strong brand based on a consistent product, no matter where the operation is. Global marketing integration demands that the marketing component of the company should also be integrated, and consistent. One of the major implications is with regards to product. Starbucks sought to expand into Asian markets, but their core product of coffee has very low penetration in tea-drinking countries like Japan and China. This major cultural difference could have been a significant impediment. However, Starbucks overcame this by shifting the focus of their marketing towards the other key product - the Starbucks experience. In Asia's densely-packed cities, the need for a "third" place, somewhere to socialize besides work and home, was strong. This was the means for Starbucks to win customers. Those customers have slowly become weaned on coffee, via the syrupy dessert-like coffee drinks on the menu.
Thus, the product did not change but the promotion saw a slight shift when Starbucks entered Asia. In order for this to occur, Starbucks needed to make some adjustments to its logistics systems. In North America, the inputs could be acquired and distributed from a central point of command. Asia's markets are too distant for this to be feasible, so new suppliers had to be found. Maintaining consistency - a Starbucks hallmark - would be more difficult.
Place and price, however, remained consistent. Place has long been a key component of the Starbucks business model. Finding the right location was considered essential. Starbucks has continued to emphasize this part of its marketing program when expanding overseas.
Therefore, the Starbucks strategy with regards to place was relatively easy to integrate on a global scale. Price did not represent a significant challenge. Starbucks price positioning is at the high end, and the Asian markets that they entered have ample high end consumers. A contributing factor to Starbucks' price...
In Asia, they solved this problem by forming a partnership with an existing food service group that had experience with Western franchises. This allowed Starbucks to leverage their partner's existing supplier relationships and economies of scale, allowing for Starbucks to hit the same price points overseas as they do in North America.
Maximizing synergy is an important issue for businesses expanding globally. For Starbucks to maximize synergy, it is recommended that they continue on their present course. The model for overseas expansion that they have adopted - in particular with regards to focusing on the Starbucks experience first and the coffee product second - has been highly successful. The company's ability to translate the Starbucks experience hinges on the store's atmosphere and on staff training, both of which can be easily transferred from North America even if their customers' coffee addictions cannot. The use of joint venture partnerships in order to maximize supply chain advantages cannot be understated - this has been a key element in the development of a consistent Starbucks experience worldwide. The company in future must continue to select their joint venture partners very carefully, in order to maintain this global marketing synergy that they have developed.
Works Cited
No author. (2008). Ford Motor Company will Re-Evaluate Strategic Options for Volvo Car Corporation. Ford Motor Company. Retrieved December 12, 2008 from http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-motor-company-announces-it-29498
Copper, John F. (1983) the GM-Toyota Joint Venture. The Heritage Foundation. Retrieved December 12, 2008 at http://www.heritage.org/Research/EnergyandEnvironment/bg288.cfm
No author (no date). Starbucks Coffee Japan: How Starbucks Perked up Japan's Coffee Culture. American Chamber of Commerce Japan. Retrieved December 12, 2008 at http://www.accj.or.jp/doclib/fdi/1069040679.pdf
