International business-Starbucks

Nowadays,companies use different ways to expand overseas market in order to maximum their profitable growth. One of these methods is franchising. It is quite similar with licensing. 

Franchising is the practice of extending a business by giving other organizations, in return for a fee, the right to use your brand name,technology or product specifications(Body 2012) For instance, Starbucks,Subway,McDonald's and

 so on.

It is clearly that this model are flexible and there are advantages and disadvantages.Take the example of Starbucks, it is founded in 1971.In North America, most of the Starbucks stores are company-operated.The mission statement of Starbucks is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Starbucks is not just cup of coffee.Because of globalization,this name has been translated,spoken and known as hundred different languages. 



At the beginning it is just a little coffee shop in Seattle, now Starbucks are risen to be one of the largest organization in the world. Global expansion is significant to a successful company,Starbucks is no exception. While the domestic market of Starbucks was quite successful,  they decided to expand this brand to the foreign countries. In 2013 , it already evolve into worldwide company as we all know.        
However,while the impact and profit of globalization bring to Starbucks is internationally,the way they should operate should be internationally as well. Since the whole world has different culture and different habits of drinking coffee, Starbucks has had to establish ways to adapt to foreign nations and seek the support of the residents of those countries. For instance, in China, the peak hour of selling coffee is in the afternoon, not in the morning. What is more.the company sometimes enters into licensing arrangements with companies who provide the right to use particular locations that would otherwise not be accessible such as airports, grocery chains, and colleges/universities.

But the way Starbucks use, I mean franchising has several advantages and disadvantages.
The first advantages of it is you do not need to set up the whole thing and do not have to pay massive investment cost to receive the revenue.For example,The Starbucks franchise value leads to a very good financial results. 
Between 1997 and 2001, it has increased from $975,389,000 to over $2,648,980,000. The number of Starbucks stores is about 4 times than before. And the sales have 

been up 5%-9% annual for the past 5 years. There is no doubt that it will also help expansion of this brand.

However, if they do not train them well or the franchisees are performing poorly it might damage the brand because consumers have no idea about which one is franchise, so if they think it is not good they might choose Costa 

next time since the switch cost is very low.

All in all, globalization brings us, organization so many advantages but also some bad impacts.I mean when I in Brighton Starbucks shop,the taste of cup of coffee will be exactly the same with my friend in Beijing. (Not exactly but all most haha), aren't they amazing? I also watched a video which are talking about the franchising advantage and risk are quite helpful.

resource form: 

http://www.youtube.com/watch?v=ZC-ndm0LR80