Starbucks: Foreign Market and Diversification

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Introduction This paper will provide an argument for diversification to be presented to board of directors for Starbucks. A strategy for diversification indicating the products and industries for diversification and how synergies may be gained will be provided. The identification and the discussion of the foreign market Starbucks should enter will be presented, along with the strategy it should use to enter the market. Challenges Starbucks may face in the foreign market will be discussed, as well how it might respond strategically to minimize the impact of these challenges. Also, this paper will encompass a scenario when it would not make sense for Starbucks to diversify or expand into a foreign market and how the company will create a business environment conducive to ethical behavior will be assessed. Argument for Diversification According to Investopedia website, “a technique that reduces risk by allocating investments among various financial instruments, industries and other categories is known as diversification. Diversification is the most important component of reaching long-term financial goals while minimizing risk” (“Investopedia”, 2011). “Fundamentally, this strategy is about creating new products with new product life cycles and making existing ones obsolete” (Olsen, n.d.). With diversification, Starbucks would be able to enter new markets with new products. By having a diversification strategy enforced, this will create a path for effective growth for the business. As with any company considering new products in new markets, there are risks associated with it and Starbucks would need to be prepared to respond accordingly. With diversification, Starbucks will have the opportunity to increase its growth. Also, this s... ... middle of paper ... ...t was delivered. A business environment conducive to ethical behavior for Starbucks was assessed. Works Cited “Investopedia”. (2011). The importance of diversification. Retrieved from Olsen, E. (n.d.). Strategic planning: Diversification. Strategic planning kit for dummies, 2nd edition. Retrieved from “Starbucks”. (2013). Starbucks coffee international. Retrieved from Thompson, A.A., Strickland, A.J., & Gamble, J. E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed.). New York: McGraw-Hill-Irwin

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