Starbucks licensing agreement singapore

The Parties intend that Seller will not incur any cost or expense that is not reimbursed by Purchaser to operate the Starbucks under the Temporary Starbucks Agreements. Seller has provided true , correct and complete copy of the Starbucks License Agreement , as identified on Schedule 7. The Starbucks License Agreement is in full force and effect. Except as set forth in Schedule 7. License Agreements a Each Borrower and Guarantor shall i promptly and faithfully observe and perform all of the material terms, covenants, conditions and provisions of the material License Agreements to which it is a party to be observed and performed by it, at the times set forth therein, if any, ii not do, permit, suffer or refrain from doing anything that could reasonably be expected to result in a default under or breach of any of the terms of any material License Agreement, iii not cancel, surrender, modify, amend, waive or release any material License Agreement in any material respect or any term, provision or right of the licensee thereunder in any material respect, or consent to or permit to occur any of the foregoing; except, that, subject to Section 9.

No changes to the these terms and conditions may be made unless previously agreed to between Vendor and DIR. It is the licensee of various renowned brands including Starbucks Coffee, Genki sushi, ippudo and Cheesecake Factory in different territories.

This news content was configured by WebWire editorial staff. Linking is permitted. News and Press Release Distribution, Since When Starbucks decided to enter into Spain, the coffee company had a long.

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Therefore, managers needed to analyze every influential factor thoroughly in the. Our study has shown that internal and external factors influenced the choice of entry. Moreover, we have determined that external factors are often. As for the firm, it is significant to analyze the external factors first-hand.

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TOPIC When a firm seeks to enter a foreign market, the company must choose the most appropriate entry mode for that specific market. The decision of entry mode strategy is the most critical decision in international expansion. The choice of international strategy has long-term implication for MNCs. That means, entry mode strategies are often massive, irreversible, and can influence the performance of the firm in the long run.

MNCs can choose between six international entry mode strategies: exporting, licensing, a turnkey project, franchising, joint ventures and wholly-owned subsidiaries. The choice of method depends on the researcher and the research problem. In our master thesis, we have collected data through a qualitative method. As previously, mentioned the research method has to fit with the research problem.

We regarded that a qualitative method was the most suitable to understand entry mode decisions. We sought the flexibility of qualitative instruments to obtain findings more than the rigidity of quantitative methods.

We have focused our investigation on several established aspects and factors. However, we have ruled out the possibility to include other crucial factors that explain our phenomenon in our research. The qualitative method has allowed us not only to find the data we look for, but also to locate complementary information that was relevant for our study. We have chosen to develop our investigation through interviews particularly e-mail interviews and documentary research.

Both methods are suitable to obtain the data for our investigation. Interviews have provided us information directly from the company, and documentary research has provided information indirectly.

Interviews are the most reliable research instrument in order to obtain information for our case study. Furthermore, they provide us new and unknown information that would be impossible to get through other sources such as books or annual reports.

We had preferred to interview him face to face, but we were unable to do so because of his schedule and our physical distance from Spain. Therefore we obtained an e-mail interview See Appendix I. Furthermore, we tried to interview some managers of Starbucks in the United Kingdom, in New Zealand, and in Starbucks international subsidiary. Unfortunately the United Kingdom office refused our request. They informed us that they received a huge demand of enquires and were unable to respond to individual requests.

We also got in touch with the managers of Starbucks in New Zealand. They told us they could not provide the information we needed. The New Zealand managers did provide us the email address of the Starbucks international subsidiary contact, however when we sent our e-mail interview see Appendix II we did not receive a reply.

E-mail interview: There are several limitations to an e-mail interview. First of all, the interviewer cannot know with total certainty who will reply to the interviews. An e- mail interview might carefully crafted by public relations advisers or by someone who is posing as the person to whom we have sent the e-mail. In addition, an e-mail interview denies the chance to ask spontaneous questions or to immediately follow up on an answer.

Answers tend to be shorter than a face-to-face interview. Finally, the interviewer cannot see the visible reactions of the interviewee. An e-mail interview does have some advantages. Physical distances between interviewer and interviewee are eliminated. Additionally, the interviewee has flexible time to answer an e -mail interview Ros-Martin Interview literature distinguishes two types of interview: pre-code interviews and open interviews.

Pre-code interviews are developed using a specific structure. Open interviews are flexible. As our interviews were by e-mail, we chose to use pre-code interviews. We have asked precise questions in order to determine the exact information that we seek as provided by the interviewee. However, we have also added some open questions in order to provide an overview of our topic or another perspective See Appendix I and II.

Documentary research also has some advantages and limitations in research. The main advantage is that there are many sources which we can use to obtain information. The documentary research can also provide different perspectives from a number of different people.

However, this research instrument has some limitations such as the data might be unreliable. Also relevant information for a specific company is often difficult to find. We have chosen this data collection method because we considered that documentary sources could provide us relevant information for our research. This form of research offers a variety of means to obtain information such as journals, document files, reports, books and so on.

Starbucks is a successful company which has been the target of a huge amount of studies. There are many documentary sources concerning Starbucks and its strategies and policy. In addition, documentary research enables us to complement the scarce information available with our own interviews.

Information sources on the Internet: At the present there are a multitude of resources available on the Internet for many types of investigations. Among the numerous available sources for research are catalogues of important libraries, databases, e- journals and company homepages. In addition, we can consult and read completed versions of textual materials in virtual libraries and e-journals.

However, to use the Internet as an information source can be a double-edged sword. We have to be careful when choosing documents. We have to regard which documents are useful and which are not. Furthermore, the reliability and rigor of Internet sources should always be considered.

There are five main research designs: First is Experimental design, which consists of choosing some independent variables to determine if those influence a determined variable.

Second is Cross-sectional design, which refers to collecting quantitative or quantifiable data through questionnaires, interviews, surveys, etc within several cases at a specific point in time, establishing patterns of associations between two or more variables.

Third is Longitudinal design, which looks for specific alterations in contexts, organizations or industries. Fourth is Case analysis design, which describes a single case as a specific location, an organization, a person or an event. It uses different sources of data because a unique source of evidence is not enough to achieve validity Gillham Lastly is Comparative design, which analyzes two or more cases which are contrasted using more or less the same methodology.

When qualitative methodology is applied, the chosen focus is multi-case. Our aim is to study influential factors affecting the decision of entry mode. In order to analyze those factors we need to make a comparison between different examples. Therefore, we consider that using a single case study is not suitable for our research.

Using a multi-case study we will achieve a reliable finding in our thesis. Therefore, we have selected a set of locations that correspond with countries in which an MNC, Starbucks, has internationalized. In addition to comparative design, we have used cross-sectional design to determine our conclusions.

There are some criticisms to the use of multi-case. It is argued that researchers are less concentrated on the specific context of every case study and more focused on the contrast between different cases. We have tried to avoid the above effect in our thesis by dividing our empirical analysis into two separate phases: the first phase was to analyze in depth each case and second, after we had already reported the individual characteristics of each case, we started to compare our three cases.

The following picture depicts the research approach that we are going to follow in our literature. In the second phase, case studies are chosen based on the factors selected in the first phase.

After taking that into account, research and data collection methods are selected for our chosen case studies. Then the data for every study is collected, and an individual report will be written for each country.

In the third phase, a contrast process will be applied. When the contrast process is finished, we will describe the results. Finally, we will finish our thesis with the conclusions that can be determined from our research. We have chosen this company because we found that Starbucks takes different entry modes to internationalize.

Starbucks used three different entry mode strategies to internationalize: joint venture, licensing and wholly-owned subsidiaries Starbucks.

We decided to study three countries because of two reasons. First, we sought to obtain representative results. We considered that one unique country was not enough to reach reliable conclusions. If we explored more countries than a country we would obtain data from more sources and have the ability to contrast the reliability of our data.

In United Kingdom, we investigated that Starbucks only chose entry mode of wholly-owned subsidiary in this country from the early beginning. In the rest of cases where at present Starbucks is a wholly-owned subsidiary the company entered with a different strategy to wholly-owned subsidiary. We selected New Zealand case, because Starbucks used licensing and there was available secondary data to carry out our research. Last in Spain case, Starbucks decided to choose joint venture.

We selected this case because we knew that to obtain data from Spain it would be easy as Beatriz Santamaria, one of authors this thesis, is Spanish. With the analyses of three different countries, we thought it would carried out an interesting investigation and could draw a comprehensive contrast in order to make the conclusion for answering our research questions.

In case analyses, our aim is to explore which factors affect choice of each entry mode. In order to obtain results we are going to separately examine each country. Our research on factors represented in our conceptual framework.

We considered that our investigation has to follow a structure. Therefore we decided to use these depicted factors in our conceptual framework as guidance or structure within our research. In addition, we will determine if the factors developed in our conceptual framework were represented in our finding. Inside of our literature review, there are two differentiated parts related to above two main parts of our conceptual framework: literature about factors that affect the entry mode decision, and entry mode strategy theory.

Literature of entry mode factors describes factors may influence on entry mode decision. Another hand, entry mode theory shows a set of entry mode strategies that a company can carried out to go into a foreign country. He regards that entry modes help companies to determine goals, resources and policy in order to channel their international activities toward a sustainable international expansion.

In our thesis we draw our attention to the following theories: 3. Y and Mujtaba B. Non- Transaction Cost Economics Model consists of a set of approaches such as Ecletic approach, Bargain power theory and Resource-based theory.

In Ecletic Theory, Dunning developed three groups of factors that influence the entry mode choice: transaction-specific advantages, internationalization-specific advantages and ownership-specific advantages.

The resource-based approach considers that resource availability and utilization both play a part in the choice among modes of entry. They divided the entry mode factors into three groups of factors: firm-specific factors, country-specific factors and market-specific factors See Figure 1. It refers to firm-specific assets and skills that comprise ownership advantages. Chen and Mujtaba distinguish three types of firm-specific factors: asset specificity, international experience and firm size.

Asset specificity refers to products and technologies that tend to create dissemination risks because of the threat of opportunism. The authors posit that great asset specificity tends to favor a higher-control entry mode. International experience according to the TCE approach is local market knowledge accumulated to avoid hazards in international market transactions.

Chen and Mujtaba consider that great international experience favors a higher-control entry mode. Finally, firm size refers to the idea that larger firms have a greater capability than smaller ones to expend resources and absorb risks. Country-specific factors are a set of factors that include country-specific economic, political, legal, institutional and cultural factors.

Chen and Mujtaba divided country- specific factors into two variables: country risk and government restriction. Chen and Mujtaba posit that high country risk tends towards lower involvement entry modes. Government restrictions are laws and regulations that impact on the operation of a foreign firm Ibid. This theory supports that increased government restrictions leads to low involvement entry modes.

Market-specific factors: Several studies posit that factors specific to the market will influence the choice of entry mode. Chen and Mujtaba point out as representative variables: market potential, demand uncertainty and competitive intensity.

Market potential refers to the growth and size potential of the foreign market. When there is a great market potential MNCs preferr high-control entry mode. Demand uncertainty refers to the future demand of products and services in a foreign market that are difficult to predict. Chen and Mujtaba argue that when demand of uncertainty in a foreign market is high, firms tend to use a higher-control entry mode.

The authors show in their study that firms use a high control entry mode when the competitive intensity is high. Theory of Root Root develops a model of factors that affect entry mode decision. He distinguishes between internal and external factors. He states that the choice of entry mode for a product or target country is the result of several often conflicting forces.

See Figure 2. He divides influential factors affecting entry mode decision into two groups: external and internal factors. Target Country Market Factors: Root argues that the size of target country market influences entry mode choice.

In small markets companies use entry modes with low breakeven sale volumes such as indirect distributor exporting, licensing and contracts.

In a market with high potential sales the company uses entry modes with high breakeven sales volume. Root mentioned competitive structure of the market is an important aspect in considering the target country factors. When competitive structure tends towards monopoly, entry modes are high resource commitments to compete against competitors. Otherwise, if the competitive structure of the market tends towards perfect competition, entry modes are often low resource commitments such as exporting.

Target Country Production Factors: the quality, quantity and cost of resources in the foreign country, as well as the quality and cost of economic infrastructure influence the choice of entry mode. When the costs of production are low in the target country, local production is favored. On the other hand, if production costs are high in the foreign country, the company tends to export Ibid. Target Country Environment Factors such as political, economic and socio-cultural dimensions of the foreign country can influence the choice of entry mode.

In particular, government policies and regulations can be decisive in choosing the entry mode. Another important factor within country environment factors is geographical distance.

When there is a great distance between the home and foreign country, it is possible that transportation costs are high, thereby discouraging export entry modes and favoring another entry mode such as a wholly-owned subsidiary.

The economy of the target country can also influence the decision of entry mode. For instance, in centrally planned socialist economies, equity entry modes are not possible, and therefore companies only rely on non-equity entry modes such as exporting, licensing or other contractual modes. Other important factors are the size of economy gross national product , absolute level of performance gross national product per capita , and relative importance of its economic sectors percentage of gross national product devoted to the particular sector.

Finally, another relevant factor is cultural distance; the firms often prefer to enter those foreign countries that are culturally closest to the home country Ibid. Home Country Factors: These are the set of factors that have influence on entry mode choice such as home country market, production and environmental factors. If the home country has a big market, it enables a company to grow to a large size in the home market before going abroad.

The competitive structure also influences the choice of entry mode. Relative production costs of the home country versus the foreign country influence entry mode decisions. If there is a high production cost in the home country, the company will chose foreign market entry modes such as licensing, contract manufacture and investment. Another home country factor is the policy of the home government toward exporting and foreign investment by domestic firms.

Finally, geographic distance is an influencing factor in that a large distance will favor local presence in a foreign country Ibid. Product factors: when products are highly differentiated over those offered by their competitors; there is a degree of pricing discretion. As a consequence these products can absorb high unit transportation cost and high import duties and still remain competitive in a foreign market.

Otherwise, if products are weakly differentiated, they have to compete on a price basis. Therefore, high product differentiation favors export entry whereas a low differentiation tends to use entry modes as contract manufacture or equity investment. In order to provide services in foreign countries, the firm must train local companies as in franchising or deliver its service directly under contract with the foreign customers via technical agreements and construction contracts.

Firms with products using intensive technology often opt to license. In order to internationalize the product, a considerable adaptation is often necessary. Resource commitment factors: if a company owns a huge amount of resources management, capital, technology, production skills, and management skills , the company will have numerous entry mode options. However, companies with limited resources are constrained to use entry modes with small resource commitment Ibid. Theory by Brassigton and Pettitt Brassigton and Pettitt state two internal factors have influence on entry mode: payback and speed.

They define payback as the time that a company needs to create revenue from investment in a foreign country. They refer to speed as the time the company desires to dedicate in order to penetrate a target market.

Theory by Koch Koch posits that influential factors on market entry model selection MEMs can be divided into three groups: external, internal and mixture of external and internal factors.

In our literature review we only mentioned external and internal factors. Koch argues some entry modes such as wholly-owned subsidiary or joint venture may be excluded by law in some countries owing to that the particular industry might be considered strategic by the state.

This factor also refers to know-how dissemination risk, labor regulation, cost of labor, level of skill and taxes. Furthermore, Koch states that there are characteristics of the overseas country which are easy to obtain these days, but information about industry and company-specific information is often difficult to find. Knowledge of this information will influence the choice of international strategy.

Koch also regards that market growth rate can be influential in entry mode decision. When the market has a fast growth rate, the company seeks to exploit this opportunity by using entry modes of fast expansion.

Otherwise, when growth of demand is predicted to occur over a long time, the company tends to establish entry modes such as joint venture and wholly-owned subsidiary. Another external factor is image support requirements. In order to build and sustain their image, some companies may license their inventions to increase their role as global providers of the latest technology, thereby enabling the company to influence global industrial standards.

Koch also points out global management efficiency requirements as another external entry mode factor. Some companies choose a diversified, multinational mode of operation in that case.

The popularity of individual MEMs in the overseas market factor refers to the particular nature of individual country markets. Country markets may have certain entry modes with more popularity than others. New entrants in this kind of market are influenced by the experience and degree of success of the former entrants, as well as the product market situation. Finally, Koch states that market barriers such as tariff barriers, governmental regulations, distribution access, natural barriers, exit barriers and level of country development can have influence on entry mode choice.

Koch argues that the freedom of selection of entry mode and their relevant preference depends on the company size and its resources. Another internal factor is management locus of control. This refers to manager perceptions, intuition and management style. Koch also states that experience in using MEMs is an internal factor affecting the entry mode decision. It refers to the management culture which will influence the behavior of decision makers.