Starbucks Cultural Distance - Strategy

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Starbucks in Japan, United Kingdom and Morocco. Examining the role of cultural distances in Starbucks’ foreign expansion efforts. By - Jeremiah Taylor Karima Elghiyati Christopher Funk Global Strategy 6440 Professor: Yi Jiang Saturday, June 07, 2014 Intro The wild success of Starbucks in the United States has given the company a desire to expand into foreign markets. While the company is ubiquitous in American culture, it aligns itself with the fast-food coffee experience that Starbucks drives. This experience is at odds with many other cultures and the traditional coffee shop experience which provides a social nexus and central meeting place. In its selection of entry modes for foreign countries Starbucks must examine the cultural barriers that are present and determine if the Americanized Fast Food Coffee experience will align with the cultural and social needs of coffee consumers in different countries. Typically, the Non-United States entity known as Starbucks, LTD, utilizes 3 modes of entry when entering a foreign market. These include wholly-owned-subsidiary, partnerships, and licensing. Historically, Starbucks has utilized the method that matches the risk and profit return associated with market capitalization. In this paper we look to examine Starbucks’ entry into 3 different countries and effect of cultural barriers on entering a new market. About Japan: It must be understood that at face value and cultural analysis, the decision to enter the Japanese market would be foolish. At the point of their entry, they faced an extremely compacted market and faced the steep barriers associated with the massive diversity between American Culture and basic tenets of Asian cultures. Then, when amplified by the unique cultural phenomena of the Japanese subset, it would seem foolish. For the sake of reference, Japan is the most

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