Starbucks development strategy adapts to different markets addressing local needs and requirements. They currently use three business strategies: joint ventures, (A joint venture is an arrangement in which a foreign company and a local firm invest together to create a local business. Ownership, control, and profits are all shared in a joint venture.) licensing, (A contractual agreement whereby a company allows another firm to use its brand name, patent, trade secret, or other property for a royalty or fee)and company-owned operations. Starbucks initially turned down franchising agreement because of concerns about maintaining quality. As it moved into the international markets, however, it utilized licensing agreements with local partners in addition to having company-owned stores – a departure from its original channel strategy. Starbucks even has licensed stores in North America. There were over 4,303 Starbucks stores in place globally as of May 2001. Roughly, one third of the international stores are company-operated, compared to almost 70 percent operated by licensees. The percentages are reversed for the North America market with only about 20 percent of store licensees. Starbucks' positioning hinges on the idea to provide unique Experience, along with quality products. Experience means providing the atmosphere of peace of mind, where customers can do either individual activities (reading, listening to music) or socialize with friends. This positioning ties with such basic consumer values, as self-fulfillment, sense of belonging and fun. The international market works well with Starbucks as airports, hotels, and malls are all locations for their coffee bars. The company purposely opens stores near one another in order to ensure intensive distribution coverage in attractive markets.
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