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In the Starbucks case, only the first of these three is a valid motivation for multinational expansion. Experience and location economies are primarily concerned with cost economies derived from minimising manufacturing costs, vertical internalisation and overcoming transactional market imperfections. In the Starbucks case however I am primarily concerned with the utilisation of Starbucks' intangible core competencies and the horizontal expansion of multiple retail outlets into foreign markets where structural market imperfections exist.
To some extent, Starbucks is already vertically integrated across national borders with significant bargaining power downstream in the value chain over farms, coffee mills and coffee exporters in countries such as Guatemala, Costa-Rica and Indonesia (Carolis research)...
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