joint venture offers the lowest possible protection of the sustainable competitive advantage (SCA). Therefore, Starbucks will have to implement strict guidelines to be able to keep their SCA alive and well in the Japanese market. Starbucks partnership with Sazaby, Inc., an upscale retail and restaurant operating company, they did just that, protected their SCA with a company that shares the same type of SCA while being a focused differentiator.Still, a joint venture relation ship does offer a moderate reduction in the financial risk Starbucks must incur. When Starbucks developed it 50/50 partnership with Japanese based Sazaby, Inc., they cut their financial risk in half. However, the financial risk for the entire partnership is inflated due the a higher priced product, compared with other coffee’s available in the market, and because of the possible risk factors associated with local adaptation of their product.Finally, it is that local adaptation which serves as the greatest benefit of the partnership. Local adaptation looks at how well a US product will sell in the foreign market. A partnership allows for the collaboration between foreign and US partners to develop a product that will functionally be similar to the original US product yet also appeals to the consumers of the foreign market. Starbucks coffee bar design seems to have been a good match for the Japanese market. The coffee culture in Japan is that of a kissaten, coffeehouses with a formal sit down atmosphere. However, the largest and most well known coffee in the Japanese market place is the Doutor Coffee Company, the “McDonald’s of coffee houses” in Japan. These coffeehouses are quite the opposite of the traditional kissaten. At Doutor, seating is scarce, but standing bar room is ample. Starbucks, through their normal structure, struck a common ground. With a more casual atmosphere, Starbucks offer patrons ample seating areas and dine i...
