What is a global entrepreneur?
Discussions of Global Entrepreneurship
A true global entrepreneur, Howard Schultz, who led the purchase of Seattle-based Starbucks Coffee in 1987 for $250,000, later boasted, “Starbucks is going to be a global brand, in the same genre as Coke and Disney.”
By 2003, Starbucks has grown from 15 stores and 100 employees in 1987 to more than 65,000 employees serving more than 22 million customers worldwide each week. It is the leading retailer, roaster and brand of specialty coffee in the world, earning more than $3.3 billion in revenues from 6,200 retail locations in 30 countries. It was recognized by Fortune magazine as “One of the Most Recognized and Respected Global Companies.” During the annual shareholders meeting in early 2003, Starbucks Corporation celebrated the worldwide acceptance of its brand by customers around the world. “Over the past several years Starbucks has become an integral part of customers’ everyday lives,” said Schultz.
In 1983 Schultz traveled to Italy, where he was impressed with the popularity of espresso bars in Milan. He saw the potential in Seattle to develop a similar coffee bar culture and a couple of years later he founded Il Giornale, a shop that offered brewed coffee and espresso beverages made from Starbucks coffee beans. In 1987, with the backing of local angel investors, Il Giornale acquired the assets of Starbucks and changed its name to Starbucks Corporation. By the end of the year they had 17 stores, with one in Vancouver, BC. In 1995 Starbucks Coffee International was created and formed a joint venture with SAZABY Inc., to develop Starbucks coffeehouses in Japan. A few years later they acquired the Seattle Coffee Company in the United Kingdom with more than 60 retail locations. Ten years after Schultz purchased the company, Starbucks had reached $1 billion in global sales and he transitioned from chairman and CEO to chairman and chief global strategist.
Global expansion favors smaller, entrepreneurial companies. It gives them access to capital, technology, talent, and markets that previously only big firms could reach. In fact, over 63,000 or 77 percent of all the companies involved in exporting from the United States had fewer than 100 employees. A global entrepreneur seeks out and conducts new and innovative business activities across national borders. These activities may consist of exporting, licensing, opening a new sales office, or acquiring another venture.
Benefits to Going Global
There are many benefits for entrepreneurs participating in global business activities. We group them in three categories: strategic, financial, and production related. Examples of strategic benefits are: enhancing domestic competitiveness, reduction of dependence on existing markets, capitalizing on the growth potential of the new country market and neighboring countries, protecting foreign markets, stretching and building marketing capability, global brand building and awareness, finding new talent, and transferring competitive information and new product ideas from those markets to other markets, or what we call “learning local and share global” activities.
Examples of financial benefits include: finding new customers, increasing profits and sales, earning a greater return from set of core competencies, increasing the universe of potential investors, capitalizing on tax advantages, and minimizing impact of seasonalities in local markets. Production-related benefits include: guaranteeing supply of raw materials, acquiring technology and R&D capabilities, cutting costs through global outsourcing, improving purchasing power for customers buying locally, realizing greater experience curve economies in production, extending lifecycle for current products or services, and selling excess production capacity.