[HOW CULTURE EFFECT MULTINATIONAL CORPORATION]
[Starbucks in china and Maggi in India ]
Abstract
It is a globalized world, people consume similar types of food, and wear similar styles of cloth, more and more companies choose to have their business outside of its countries. Because having a business outside of its own country could not only could bring a huge profit for the company but also increase the fame of the company. However, some of them turn out to be extremely successful, some of them turned out to be a disaster. What are the key factors for those companies that succeed in the foreign countries? How does culture affect business? In this paper, we are going to discuss how a MNC (Multinational Corporation) do business in a foreign …show more content…
Starbucks has highly localized menu of beverages that is particularly tailored to Chinese consumers. It even gives each store the flexibility to choose from a wide variety of its beverage portfolio that fits the customers at its particular location.
Establish "Guan Xi"
China is not one homogeneous market. We have 56 minorities, so the culture from northern China is very different from that of the east. Consumer spending power and the minimum wedge for the northern part of are not on the same level as coastal cities. Moreover, China is a high context culture, a foreign company has to have some "guan xi-relationship" inside the market. To address the complexity of the Chinese market, Starbucks partnered with three regional partners as part of its expansion plans:
In the north, Starbucks entered a joint-venture with Beijing Mei Da coffee company. In the east, Starbucks partnered with the Taiwan-based Uni-President. In the south, Starbucks worked with Hong Kong-based Maxim's Caterers. Each partner brings different strengths and local expertise that helped Starbucks gain insights into the tastes and preferences of local Chinese …show more content…
In the following paragraphs, we will talk about the successful story of Maggi in India. Maggi is brand owned by Nestle. It is an incredible brand that created a category for itself in the Foods market in India. The brand is famous for the Noodles, seasoning, and Instant soup.
Nestle launched its noodles in the Indian market in the early 1980's. Nestle wanted to explore the potential for such an Instant food among the Indian market. It took several years and lot of money for Nestle to create the a new demand for its Noodles brand in India. Now it enjoys around 63 percent of the market share in this segment.
Indian Psyche
Maggi has faced a lot of obstacles in its journey in India. The basic problem the brand faced is the Indian Psyche. Indians have a very conservative mind about their meals. When they first saw Maggi, most of the Indians are not willing to try the new taste. So, this kind of new product with a new taste which from a different culture has an extremely bad
[Starbucks in china and Maggi in India ]
Abstract
It is a globalized world, people consume similar types of food, and wear similar styles of cloth, more and more companies choose to have their business outside of its countries. Because having a business outside of its own country could not only could bring a huge profit for the company but also increase the fame of the company. However, some of them turn out to be extremely successful, some of them turned out to be a disaster. What are the key factors for those companies that succeed in the foreign countries? How does culture affect business? In this paper, we are going to discuss how a MNC (Multinational Corporation) do business in a foreign …show more content…
Starbucks has highly localized menu of beverages that is particularly tailored to Chinese consumers. It even gives each store the flexibility to choose from a wide variety of its beverage portfolio that fits the customers at its particular location.
Establish "Guan Xi"
China is not one homogeneous market. We have 56 minorities, so the culture from northern China is very different from that of the east. Consumer spending power and the minimum wedge for the northern part of are not on the same level as coastal cities. Moreover, China is a high context culture, a foreign company has to have some "guan xi-relationship" inside the market. To address the complexity of the Chinese market, Starbucks partnered with three regional partners as part of its expansion plans:
In the north, Starbucks entered a joint-venture with Beijing Mei Da coffee company. In the east, Starbucks partnered with the Taiwan-based Uni-President. In the south, Starbucks worked with Hong Kong-based Maxim's Caterers. Each partner brings different strengths and local expertise that helped Starbucks gain insights into the tastes and preferences of local Chinese …show more content…
In the following paragraphs, we will talk about the successful story of Maggi in India. Maggi is brand owned by Nestle. It is an incredible brand that created a category for itself in the Foods market in India. The brand is famous for the Noodles, seasoning, and Instant soup.
Nestle launched its noodles in the Indian market in the early 1980's. Nestle wanted to explore the potential for such an Instant food among the Indian market. It took several years and lot of money for Nestle to create the a new demand for its Noodles brand in India. Now it enjoys around 63 percent of the market share in this segment.
Indian Psyche
Maggi has faced a lot of obstacles in its journey in India. The basic problem the brand faced is the Indian Psyche. Indians have a very conservative mind about their meals. When they first saw Maggi, most of the Indians are not willing to try the new taste. So, this kind of new product with a new taste which from a different culture has an extremely bad