STARBUCKS ENTERTAINMENT CASE 5
Asa division of the Starbucks Group, Starbucks Entertainment (SE) is acompany that was established in 2006 to engage in production, marketand distribute entertainment products. The firm focuses on deliveringmusic globally among other products like films and books. The firmhas a strategy of increasing its sales and profits in theinternational market. To pursue this strategy, the firm has toestablish markets in different countries as a way of expandingbusiness in the global markets. The country selected for thisstrategy is Canada, a country with existing Starbucks stores, butwith only limited CD sales.
StarbucksEntertainment can increase profits and sales by increasing thevolumes of business done in the international business. As a companythat has business presence in global market through the StarbucksCoffee brand, the company can leverage from the existinginfrastructure to increase its markets. In addition, StarbucksEntertainment can increase sales and profits by gaining competitivemarket advantage through aggressive marketing. By marketing in thecountries that the firm operates in, the company can gain marketadvantage, especially with the integrity that it enjoys under theStarbucks coffee brand. Moreover, the company can increase profits byreducing the distribution and logistical costs through the use of theexisting Starbucks coffee infrastructure and platforms to market theentertainment products.
Withregard to the products, the company should sell music and filmsinternationally as the products. This is because the firm hasexisting stores that can appropriately identify with theentertainment products such as music and films. Chris Bruzzo arguesthat the music can be played in the coffee stores, just like the artthat is displayed on the walls of the stores(StarbucksEntertainment, 2008).Accordingto Chris Bruzzo, music that has global appeal can be a good productfor the company, in addition to the local music that is relevant(StarbucksEntertainment, 2008).
However,in establishing global market, the firm should consider culturalpreferences that shape the musical choices of the target audience.Religious believes form a strong cultural factor that influences thechoice of music listened in many countries. Therefore, StarbucksEntertainment should consider the culture of the target markets. Thepolitical factor of governance affects the success of the company asa good business environment exists in well-governed countries. At thesame time, political stability is a factor that affects the businessenvironment for the company because businesses do well in peacefulcountries. Therefore, Starbucks Entertainment should only establishmarkets in countries with political peace.
Thelegal factor of intellectual property protection falls directly underthe Starbucks Entertainment business operations. According toMcloughlin and Aaker (2010), his exists in terms of patent laws andcopyright laws that protect music, books and films produced andmarketed by the company. In addition, the tax laws for every countryare significant legal factors that affect business operations. Theseinclude taxation laws of marketing foreign music in the country ofthe target audience. The firm should therefore establish markets incountries where the law protects the intellectual property and lawsthat supports business operations.
Theselection of Canada is informed by the political stability that thecountry has enjoyed over time and the effectiveness of the country’slaws in protecting intellectual property. In addition, Canada hasStarbucks coffee stores and limited CD sales. Moreover, Canada has apotent market and environment for music industry as explained bySusanAbramovitch,anentertainmentlawyer in Toronto (StarbucksEntertainment, 2008).This affirmed the sale of around 3.6 million albums in the NorthAmerican market by the company. Withthese considerations in mind, Canada are the best option for aStarbuck’s business strategy.
Mcloughlin,D., & Aaker, D. (2010). Strategicmarket management global perspectives.Chichester: Wiley
StarbucksEntertainment: Global Delivery of Music. UWGlobal Business Center &Certificate Of InternationalStudies In Business (Cisb), TheIFPI Digital Music Report 2008, April7 – 12, 2008