Manufacture the product at home and let foreign sales agents handle the marketing.



Details of Task: Read the case “Starbucks: global brand in emerging markets and answer the following questions:


Critically evaluate factors influencing Starbucks entry mode choices.

·        Briefly define concept of entry mode/entry mode choices.

·       Highlight factors influencing entry mode choices. You are expected to discuss the theoretical underpinning behind choice of entry mode. Integrate empirical evidences where relevant.


·        600 words

·        Intensive research of academic journal articles (at least 3) and company/industry/country reports

·        Creative and well supported arguments

·        Proper referencing system

Sample was done by student for different company

3.0  Mode of Entry

Vitamax has three options for its international venture as follows:



1.      Manufacture the product at home and let foreign sales agents handle the marketing.

2.      Manufacture the product at home and set up a wholly owned subsidiary in the US to handle marketing.

3.      Enter into an alliance with an established Mexican pharmaceutical firm where the product would be manufactured in Mexico through a 50/50 joint venture and  marketed through its existing sales agents in the US.


This part will assess all three options’ advantages and disadvantages, and also through factors influencing entry mode choices, namely internal, external, transaction-related, and desired mode characteristics. Through the assessment, the best mode of entry which is believed to deliver optimum benefits for Vitamax will be chosen.


3.1Factors affecting mode of entry

3.1.1  Internal factors

Internal factors include firm size, international experience, product complexity, and product differentiation advantage. In terms of internal factors, Vitamax is a small size company so its resources may be limited and it does not have international experience as  well, therefore making use of an external partner’s expertise may prove advantageous. The product complexity and product differentiation advantage is high since they are manufacturing a drug that eradicates cancer cells. Therefore, internalization and intermediate mode of entering a foreign market are encouraged, and in this case, option two or three.

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