LEVEL 7 ASSIGNMENT

SPECIFICATION DRAFT
Student Student number:
name:

Programme: MBA

Module: International Business Module Level: 7

Module code: 100%

Contribution to
Overall
Module
Assessment (%):

Lecturer: Internal Verifier:

Starbucks Foreign Direct
Assignment Assignment No : 1 of 1
Investment
Title:

Hand Out 11/11/2016 Submission

Date: deadline:
Referencing: In the main body of your submission you must give credit to authors
on whose research your work is based. Append to your submission a
reference list that indicates the books, articles, etc. that you have
read or quoted in order to complete this assignment (e.g. for books:
surname of author and initials, year of publication, title of book,
edition, publisher: place of publication).
Disclosure: I declare that this assignment is all my own work and that I have
acknowledged all materials used from the published or unpublished works of
other people. All references have been duly cited.

Students (Only where hard copies required)

Signature: Date:

Turnitin: Lecturer to tick to YES

indicate if an electronic
version of the assignment
must be submitted to
Turnitin. Note: the Turnitin
version is the primary
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submission and acts as a receipt for the student. All students MUST submit their
assessments by the specified deadline. Late submissions may be subject to

Learning Outcomes tested Assessment Criteria to achieve each

outcome a student must demonstrate
(from module syllabus) the ability to:

1. Critically analyse and evaluate Question 1-Demonstrate a critical

the theories, concepts and analysis of the internal and external
contexts which frame the environmental variables of a MNEs
international institutional trade through the application of relevant
and multi-national investment business models.
environment including political,
economic, social, technological
and environmental factors

2. Analyse and critically evaluate Question 2 and 3-A critical

the modes of engagement, key evaluation of different modes of entry
decision and strategy and key management choices
frameworks applied within available to MNEs
international markets and the
interconnectedness between
these and the economic, legal,
governmental, political,
regulatory, cultural and other
environments in which
international companies
operate;

DO NOT put this form into Turnitin or it will match many similarities with other
students submissions.

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 TASK DESCRIPTION
Indicative Assessment Requirements for the Module;

Read the following case study and answer ALL three questions:

Starbucks Foreign Direct Investment

Thirty years ago, Starbucks was a single store in Seattles Pike Place Market selling premium
roasted coffee. Today it is a global roaster and retailer of coffee with some 13,000 stores,
more than 3,750 of which are to be found in 38 foreign countries. Starbucks Corporation set
out on its current course in 1980s when the companys director of marketing, Howard Schultz,
came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz,
who later became C.E.O., persuaded the companys owners to experiment with the
coffeehouse format- and the Starbucks experience was born.

The strategy was to sell to the companys 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 also focused on
providing superior customer service. Reasoning that motivated employees provide the best
customer service, Starbucks executives devoted a lot of attention to employee hiring and
training programs and progressive compensation policies that gave even part-time employees
stock option grants and medical benefits. The formula led to the spectacular success in the
United States, where Starbucks went from obscurity to one of the best known brands in the
country in a decade.

In 1995, with 700 stores the United States, Starbucks began exploring foreign opportunities.
Its first target market was Japan. Although Starbucks had resisted a franchising strategy in
North America, where its stores are company owned, Starbucks initially decided to license its
format in Japan. However, the company also realised that a pure licensing agreement would
not give it the control needed to ensure that the Japanese licences closely followed
Starbucks successful formula.

So the company established a joint venture with a local retailer, Sazaby Inc. Each company
held a 50% stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10
million in this venture, its first foreign direct investment. The Starbucks format was then
licensed to the venture, which was charged with taking over responsibility for growing
Starbucks presence in Japan.

To make sure the Japanese operations replicated in the Starbucks experience in North
America, Starbucks transferred some employees to the Japanese operation. The licensing
agreement required all Japanese store managers and employees to the Japanese to attend
training classes similar to those given to U.S employees. The agreement also required that
stores adhere to the design parameters established in the United States. In 2001, the
company introduced a stock option plan for all Japanese employees, making the first company
in Japan to do so. Sceptics doubted that Starbucks would be able to replicate its North
American success overseas, but by the end of 2007 Starbucks had over 700 stores in Japan
and planned to continue opening them at a brisk pace.

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After Japan, the company embarked on an aggressive foreign investment program. In 1998, it
purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An
American couple, originally from Seattle, had started Seattle Coffee with the intention of
establishing a Starbucks-like chain in Britain. In the late 1990s, Starbucks opened stores in
Taiwan, China, Singapore, Thailand, New Zealand, South Korea and Malaysia.

In Asia, Starbucks most common strategy was to licence its format to a local operator in
return for initial licensing fees and royalties on store revenues. As in Japan, Starbucks insisted
on an intensive employee training program and strict specifications regarding the format and
layout of the store. However, Starbucks became disenchanted with some of the straight
licensing arrangements and converted several into joint-venture arrangements or wholly
owned subsidiaries.

In Thailand, for example, Starbucks initially entered into a licensing agreement with Coffee
Partners, a local Thai company. Under the terms of the licensing agreement, Coffee Partners
was required to open at least 20 Starbucks coffee stores in Thailand within five years.
However, Coffee Partners found it difficult to raise funds from Thai banks to finance this
expansion. In July 2000, Starbucks acquired Coffee Partners for about $12 million. It goal was
to gain tighter control over the expansion strategy in Thailand. By the end of 2007 the
company had 103 stores in Thailand.

By 2002, Starbucks was pursuing an aggressive expansion in mainland Europe. As its first
entry point, Starbucks chose Switzerland. Drawing on its experience in Asia, the company
entered into a joint venture with a Swiss company, Bon Apptit Group, Switzerlands largest
food service company. Bon Apptit was to hold a majority stake in the venture, and Starbucks
would licence its format to the Swiss company using a similar agreement to those it had used
successfully in Asia. This was followed by a joint venture in other countries. In 2006, Starbucks
announced that it believed there was the potential for up to 15, 000 stores outside of the
United States, with major opportunities in China, which the company now views as the largest
single market opportunity outside of the United States. Currently the company only has 350
stores in China. (Hill, 2011)

Answer all three questions:

1. Using suitable business tools carry out a foreign market analysis and assess the
reasons why Starbucks chose to embark on a foreign market expansion strategy
outside of the USA.

2. Assess the strategic suitability of the different market entry strategies employed by
Starbucks specifically those used in the entry of Starbucks to Japan, Thailand and
Britain.

3. Critically assess the suitability of the staffing approach that Starbucks utilised in Japan
in relation to their corporate strategy.

Note: Please refer to Guidelines on Page 6 and the Marking Criteria on Page 7
regarding the expectations and how the assignment will be graded.

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 Guidelines for undertaking the Assessment
1 All assignments must be word processed in Microsoft Word (or similar) format with
size 12 and line spacing 1.5.
2 The maximum word count for the assignment is 3000 words.

Report structure and word count for each question:-

Title Page
Table of Contents
Executive summary-Not more than 200 words (does
not count towards the overall word count)
Introduction
Question 1
Question 2
Question 3
Conclusions
References
Bibliography
Appendix-use sparingly

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 GUIDANCE FOR STUDENTS IN THE
COMPLETION OF TASKS
NOTE: The guidance offered below is linked to the five common assessment criteria
overleaf and specifically aligned to the exceptional outcome category to which
we anticipate students aspire.

1 Research-informed Literature
Your work must embed and be informed and supported by relevant and credible scholarly
material that is accessible in the learned journals listed on the module schedule. You should
refer to at least 10 such sources. Additionally, you should refer to text books, current news
items and benchmark your organisation against other organisations to ensure your
assignment is current and up-to-date. High-level referencing skills using the Harvard Method
must be demonstrated throughout your work and all sources listed alphabetically within your
bibliography.

2 Knowledge and Understanding of Subject

Your work must demonstrate the growing extent of your knowledge and understanding of
concepts and underlying principles associated with the subject area. This means that within
your work, you should provide evidence of your growing mastery in critical awareness of
current challenges, new insights and the constant need for innovation within the field.
Furthermore, a critical awareness of the ambiguities and limitations of knowledge and even
understanding, should be considered and examples of such, illustrated within your work.

3 Analysis
To be considered masters worthy, your work must contain evidence of analysis, evaluation
and synthesis. This means not just describing What! but also justifying: Why? How? When?
Who? Where? And at what cost! At all times, you must provide justification of your arguments
and judgements. Evidence that you have reflected upon the ideas of others on matters
occurring in the real world of business is crucial to you providing a reasoned and informed
debate within your work. Your choice of methodologies to gather data and information must
be rigorously defended. Furthermore, you should provide evidence that you are able to make
sound judgements and convincing arguments in the absence of complete data, since within
the real world of work, we rarely have access to, or know all the information! Persuasive
conclusions are especially necessary and must be derived from the content of your work
there should be no new information presented within your conclusion. Your work should
aspire to resemble work which is of journal publishable quality.

4 Practical Application and Deployment

It is essential that you rationalise how you decided upon certain methods, materials, tools and
techniques to inform and complete your work. You must demonstrate what informed your
decision(s) to apply certain concepts that enabled you to formulate innovative and creative
solutions to the challenges presented to you or that you identified for yourself. Plausible,
costed and justifiable recommendations are demanded and where these are absent, your
work is undermined. Your work should provide evidence that you are growing in mastery in
developing cutting edge processes and techniques within the subject area.

Skills for Professional Practice

Your work must provide evidence of your attributes in the application of professional practice.
This includes demonstrating that you are highly capable of individual and collaborative

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working. Regarding the presentation of your work, you must demonstrate your ability to
select and deploy the appropriate media that is fit for purpose. Additionally, you must exhibit
your ability to: communicate with an exceptionally high level of professionalism; work
professionally, autonomously and within a team; develop leadership skills; and
produce/present work that is coherent, cogent and specifically addresses the challenges set
for you or you have set yourself. Importantly, your work should be easily understood by
specialists and non-specialists in the field.

MARKING CRITERIA AND STUDENT

FEEDBACK
This section details the assessment criteria. The extent to which these are demonstrated by you
determines your mark. The marks available for each criterion are shown. Lecturers will use the space
provided to comment on the achievement of the task(s), including those areas in which you have
performed well and areas that would benefit from development/improvement.

available
Marks
Common Assessment Criteria (applied to all parts of the project)

Marks
1. Research-informed Literature 25
Extent of research and/or own reading, selection of credible sources, application of appropriate referencing conventions.
%
A critical review of contemporary academic literature related to the
concepts and frameworks of international business under investigation
from a range of academic sources;

2. Knowledge and Understanding of Subject 25

Extent of knowledge and understanding of concepts and underlying principles associated with the discipline.
%
The level of demonstration on the grasp of these concepts/theories or
models and their use in relation to the assignment tasks;

3. Analysis 20
Analysis, evaluation and synthesis; logic, argument and judgement; analytical reflection; organisation of ideas and
evidence
%
Critical analysis, evaluation and synthesis of the relevant
concepts/frameworks of international business to the assignment tasks;

4. Practical Application and Deployment 20

Deployment of methods, materials, tools and techniques; application of concepts; formulation of innovative and creative
solutions to solve problems.
%
Critical application of the relevant tools and frameworks of international
business to provide solutions to the assignment tasks;

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5. Skills for Professional Practice 10
Attributes in professional practice: individual and collaborative working; deployment of appropriate media; presentation
and organisation.
%
Presentation and structure of the assignment including referencing of
sources as per the Harvard style of referencing;
TOTAL 100%

Late Submission Penalties (tick if

appropriate)
Assignment Mark (Assessment marks are subject to
ratification at the Exam Board. These comments and marks are to give
%
feedback on module work and are for guidance only until they are
confirmed. ) Up to four weeks late

PG COMMON ASSESSMENT AND MARKING

CRITERIA
OUTRIGHT UNSATISFACT
FAIL SATISFACTORY GOOD EXCELLENT EXCEPTIONAL
FAIL ORY

Assessment
Criteria 80-100%
0-29% 30-39%* 40-49% 50-59% 60-69% 70-79%

1. Research- Little or no Poor evidence References to a Inclusion of Inclusion of a A Outstanding

evidence of of reading limited range of research- wide range of comprehensive knowledge of
informed reading. and/or of mostly relevant informed research- range of research-
Literature reliance on sources. literature, informed research informed
Views and inappropriate Referencing including literature, informed literature
Extent of research findings sources, and/or conventions not sources including literature embedded in
unsupported indiscriminate always applied retrieved sources embedded in the work.
and/or own reading,
and non- use of sources. consistently. independently. retrieved the work. Outstanding
selection of credible Some omissions independently. Excellent selection of
authoritative.
sources, application Referencing and minor selection of relevant and
of appropriate conventions errors. Selection of relevant and credible
Referencing
referencing used relevant and credible sources. High-
conventions
conventions inconsistently. Referencing credible sources. High- level
largely ignored.
conventions sources. Very level referencing
mostly good use of referencing skills
consistently referencing skills, consistently and
applied. conventions, consistently professionally
consistently applied. applied
applied.

2. Knowledge Major gaps in Gaps in Some evidence Knowledge is Knowledge is Excellent Exceptional
knowledge and knowledge, with of knowledge generally extensive. mastery of a mastery of a
and understanding only superficial and accurate with a Exhibits complex and complex and
Understanding of material at understanding. understanding satisfactory understanding specialised area specialised area
of Subject this level. Some of current and understanding of the breadth of knowledge of knowledge
Substantial significant relevant of the field of and depth of and skills, with and skills, with
inaccuracies. inaccuracies. concepts and study. established and an excellent an exceptional
Extent of systematic underlying contemporary critical critical
knowledge, principles but views. awareness of awareness of
understanding and with gaps or current current
critical awareness of errors. problems and/or problems and/or
concepts and new insights at new insights at
the forefront of the forefront of
underlying
the field. Clear the field. A
principles awareness of critical
associated with the challenges to awareness of
discipline. established the ambiguities
views and the and limitations
limitations of of knowledge.
the knowledge
base.

3. Analysis Unsubstantiated Some evidence Evidence of Evidence of Evaluates Excellent critical Exceptional
generalisations, of analytical some logical, some logical, methodologies, evaluation of critical
made without intellectual critical thinking analytical, current research methodologies, evaluation of

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Analysis, evaluation use of any skills, but for and some critical thinking and ideas current research methodologies,
and synthesis; logic, credible the most part attempts to and synthesis. critically and, and ideas and, current research
evidence. Lack descriptive. synthesise, Can analyse where where and ideas and,
argument and
of logic, leading Ideas/findings albeit with new and/or appropriate, appropriate, where
judgement; to sometimes weaknesses. complex data proposes new proposes new appropriate,
analytical reflection; unsupportable/ illogical and and situations hypotheses/idea hypotheses/ proposes new
organisation of missing contradictory. Some evidence without s. Evaluates and ideas. hypotheses/
ideas and evidence conclusions. Generalised to support guidance. synthesises Evaluates and ideas.
Lack of any statements findings/ views, complex issues synthesises Evaluates and
attempt to made with but evidence An emerging both complex issues synthesises
analyse, scant evidence. not consistently awareness of systematically systematically complex issues
synthesise or Conclusions interpreted. different and creatively. and creatively. at a high level
evaluate. lack relevance. stances and Makes sound Makes excellent of mastery.
ability to use judgements and judgements and Makes
Some relevant
evidence to proposes proposes outstanding
conclusions and
support the convincing convincing judgements and
recommendatio
argument. arguments in arguments in proposes highly
ns, But not
the absence of the absence of convincing
always well
complete data. complete data. arguments in
linked to other Some
Sound, Strong, the absence of
material. conclusions and
convincing persuasive, complete data.
recommendatio
conclusions / conclusions, Highly
ns, where
recommendatio justifiable persuasive
relevant
ns. recommendatio conclusions.
ns. Work is of Work is of
conference journal
publishable publishable
quality. quality.

4. Practical Limited or no Rudimentary Some A satisfactory A very good An advanced Outstanding

use of methods, application of awareness and and appropriate application of a application of a levels of
Application and materials, tools methods, mostly application of range of range of application and
Deployment and/or materials, tools appropriate standard methods, methods, deployment
techniques. and/or application of methods, materials, tools materials, tools skills.
Effective techniques but well-established materials, tools and/or and/or Assimilation and
Little or no without methods, and/or techniques. techniques. development of
deployment of
appreciation of consideration materials, tools techniques. cutting edge
appropriate and and/or processes and
the context of Very good The context of
methods, materials, the application. competence. techniques. Satisfactory consideration of the application techniques.
tools and Flawed appreciation of the context of is well
techniques; extent appreciation of Some the context of the application, considered, with
of skill the context of appreciation of the application, with perceptive extensive use of
the application. the context of with some use use of relevant
demonstrated in the
the application. of examples, examples, examples.
application of
where relevant. where relevant.
concepts to a
Application and
variety of processes
Evidence of deployment
and/or contexts; some extend beyond
formulation of originality, established
innovative, original innovation and conventions.
and creative creativity. Originality,
solutions to solve innovation
and/or creativity
problems.
evident
throughout.

5. Skills for Communication Media is poorly Communication Can Can Can Can
media is designed and/or is not clear. communicate communicate communicate communicate
Professional inappropriate or not suitable for effectively in a well, confidently professionally with an
Practice misapplied. the audience. Limited suitable format, and consistently and, confidently exceptionally
independent but may have in a suitable in a suitable high level of
Demonstrates Little or no Poor work and minor errors. format. format. professionalism.

attributes expected evidence of independent or limited

autonomy in the collaborative involvement in Can work Can work very Can work Can work
in professional
completion of initiative. group activities. effectively well professionally exceptionally
practice including: tasks. autonomously autonomously autonomously well and
individual initiative and as part of a and as part of a and within a professionally
Work lacks Work lacks
and collaborative Work is poorly structure, coherence in team, with team, with very team, showing autonomously
working; structured organisation, places and is in some good leadership skills and within a
deployment of and/or largely and/or need of involvement in contribution to as appropriate, team, showing
incoherent. coherence amendments to group activities. group activities. managing advanced
appropriate media
the structure. conflict and leadership skills.
to communicate
Mostly coherent Work is meeting
(including written obligations.
work and is in a coherent and Work is
and oral); clarity suitable fluent and is exceptionally
and effectiveness in structure. well structured Work is coherent, very
presentation and and organised. coherent, very fluent and is
organisation. fluent and is presented
presented professionally.
professionally.

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