Standardization And Localization Case Study

1938 Words 8 Pages
Question 3) How much standardization or localization strategy an MNC should adopt while expanding their business in emerging markets?
Answer: Starbucks has plans to cross 2500 retail outlets in China in next five years and then it will plan to enter Vietnam. In India it is not going all out in terms of the number of new outlets, but the Starbucks’ management has always thought that potential of India market is no less than China. Poor Indian infrastructure has discouraged the management, Starbucks knows its reputation of high prices and is therefore consciously attempting to keep prices in India lower than Chinese market also. As compared to Central China, Starbucks charges US $ 2.14 in India as compared to US$ 4.34 for a 12-ounce cappuccino.
…show more content…
The company has decided to send its few employees to Taj SATS, the catering division of Tata Group to learn unique food choices for local Indians. This has led Starbucks to introduce locally inspired dishes like tandoori chicken sandwiches, Chiken tikka, Paneer Tikkas, Murg Samosas etc. The food is changed within India in different cities in view the local food preferences in different states and cities of India. Whatever may the adopted paradigm of Starbucks may be, customer Centricity, high quality customer service and unique Starbucks experience is never ever compromised. Young recruits and retail outlet managers are being sent to Singapore and Thailand for training and development efforts. During 2000-2007 period Starbucks globally was doing great business and was on the new outlet opening spree in Asia as well as in South America. At one point of time it was opened two outlets per day pan global. However, this led to a situation where the layout designs of the retail outlet became almost monotonous and routine. Post global meltdown in 2008, the company was forced to shut down at least 600 outlets. This jolted the management and the whole process was rethought and reworked. New strategies in different markets were drawn, leadership changes were drawn and change in designs of retail outlets were also thought of. In one of the surveys across many markets, it was conclusively found that customers are slowly drifting away and connect Starbucks to fast food …show more content…
included moving to Japan followed by China, U.K. other European nations and Asian countries. First move was to focus on those cultures are less entrenched in coffee consumption. The mature coffee loving markets like France and Latin American are planned to be moved little late. In most Asian nations, Starbucks played a lead role in educating the customers about the coffee consumption, different quality of coffee beans, the advantage of café experience and to make Starbucks as the third place between the office and the home in these nations. Whichever market Starbucks entered, it involved local business partners. Joining hands with local players has a crucial role in understanding the local conditions, consumer preferences and gives greater confidence to global player to play long term. The business partners were engaged in hunting local talent, their training and development and retention policies. Another major challenge before Starbucks is to develop deeper understanding of local taste especially food. Japanese and Chinese had a strong market of local teas and a strong tea-drinking legacy. Starbucks offered items like green tea, soy with Chinese food items to fulfil local taste buds. In Turkey, Turkish coffee was served. In Spanish market, locally developed and preferred orange juices were offered. In China, Starbucks is investing considerable energy and efforts to educate customers about the benefits of coffee

Related Documents