Please read this case and answer only this question: Where did the original idea

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Please read this case and answer only this question: Where did the original idea for the Starbucks format come from? What lesson for international business can be drawn from this? Thirty years ago, Starbucks was a single store in Seattle's Pike Place Market selling premium-roasted coffee. Today it is a global roaster and retailer of coffee with some 16,700 stores, 40 percent of which are in 50 countries outside of the United States. Starbucks set out on its current course in the 1980s when the company's director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company's owners to experiment with the coffeehouse format-and the Starbucks experience was born. The strategy was to sell the company's own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. The company focused on selling "a third-place experience, rather than just the coffee. The formula led to spectacular success in the United States, where Starbucks went from obscurity to one of the best-known brands in the country in a decade. Thanks to Starbucks coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the web. In 1995, with 700 stores across the United States, Starbucks began exploring foreign opportunities. The first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50 percent stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 lion in this venture, its first foreign direct investmen. The Starbucks format was then licensed to the venture, g Starbucks' presence in Japan. To make sure the Japanese operations replicated the "Starbucks experience" in which was charged with taking over r esponsibility for growin

Explanation / Answer

Original idea for the Starbucks Format came from the visit of Starbucks's director of marketing to Italy who got mesmerised with Italian Coffeehouse experience. Howard Schultz suggested the company management to experiment with the coffee house format in United States. This experience gave the original idea for Starbucks Coffeehouse format.

Lessons for International business drawn from its successful international expansion and business are Starbucks manages its international operations through Joint ventures in some countries and giving licenses to partners in other countries with experience in retail and food or beverages business. It prefers licensing its format to local operators who have experience in food and beverages retail and are capable of delivering the high quality products and premium service as per the brand reputation It also enters into joint ventures in some countries and trains the staff and operations to successfully manage maintaining identity and experience of Starbucks format.

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