Globalization and Starbucks Coffee

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GLOBALIZATION AND STARBUCKS COFFEE A. ANALYSIS 1. According to the text, there are three levels that political risk encompasses. And they are firm specific, country specific and global specific risks. Starbucks is considered a thriving global enterprise. Although Starbucks has successfully entered, penetrated, and saturated many global markets, not all attempts have been successful. Starting in 1996, Starbucks has hastily moved into 41 countries fruitfully. However, Starbucks had to pull out of Israel market after opening only 6 stores. According to our research (Richey, Brenda, July 2006), the following will describe Starbucks unsuccessful venture into Israel; the four main contributors to Starbucks failure in Israel: politics,…show more content…
When Starbucks removed themselves from Israel in April 2003, they stated that it was due to operational challenges and not the current economic and political status in the Middle East (Coussin, n.d.). Starbucks was probably just trying to save their reputation by making this comment and did not want to sound offensive. “Globalization” is an invented term used to show a combination between the local and global approaches. In theory, they maintain the main features of the brand, but they modify it to meet the local cultures needs. Starbucks should have looked at KFC’s failure entering is Israel as an example of what not to do. KFC did not realize that the slaughtering of chicken in Israel was totally different from other countries. On top of that, they were a kosher society that did not eat pork, so KFC attempted to adapt their pig gelatin chicken coating. A successful example that Starbucks should have followed was McDonald’s success in Israel. McDonalds understood that in Israel food was very important and they needed to adjust food preparation in order to be embraced. They decided to grill their hamburgers instead of frying them (Coussin, n.d.). Starbucks didn 't manage to adapt themselves to the regional coffee culture. Starbucks did not modify any of their existing beverages, food products, or pricing. They should have introduced unique food items like falafels, blintzes, and mandelbrot (Thompson, 2006). Global

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