International Business and Culture: Starbucks’s Australian Experience

As we all know, culture changes from one place to another. Similarities may exist between cultures; however, there are no cultures that can be described as identical. National and regional cultures not only differ from others, but also define the respective societies and their people. Culture, a complex concept, defines the way of life in a given society and its people, incorporating the language, social activity, ideologies and thoughts, arts and sciences, as well as their norms and social mores (Johnson & Turner, 2009). As such, consumer behavior becomes a direct derivation from the prevailing culture. Multinational business organizations with the intention of venturing into international market need to know the existing culture and how it would impact on their operations, to ensure they operate in accordance to their customers’ culture. This essay discusses Starbuck’s failure to succeed in the Australian market as a result of carrying over western culture into the foreign market without paying adequate attention to the Australian coffee culture.

Starbucks corporation has established itself as the world‘s largest coffee house chain with over 17,000 stores in fifty countries across the world. With its headquarters in Seattle, Washington, the international coffee company has more than half of its stores in the United States, over 11000, with Canada having more than 1000 (, 2011). The company opened its first coffee store outside the united states in Canada in the middle of the 1990s, and has gone on to establish an impressing number of stores in Europe, with the Germany and the united kingdom accounting for about 1500. A world class service is what the company offers, with “commitment to the highest quality of coffee in the world” (, 2011). The US based business corporation sells a wide range of products across all its stores around the world including espresso hot drinks, brewed coffee, coffee beans, salads, pastries, sandwiches, Starbucks branded ice cream and coffee mugs among others. All these are offered within an amiable environment characterized by entertainment and music in the background. Starbucks believes in unique connection interaction with its customers. One would wonder why the company has failed in some of its international ventures in spite of having such credible attributes. Having attained great success within the United States since its establishment in the early 1970s, Starbucks has not been able to replicate similar results in most of its foreign stores. The Australian case is notable among its failure to succeed in another national culture (Berg, 2008).

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