Operating in 72 countries and territories with more than 20,000 locations, Starbucks has unprecedented global brand recognition. The white cup with the green logo and brown sleeve is on the forefront of international expansion as stores open every day around the world. While coffee is the fuel of most Americans and Europeans, it is not necessarily the beverage of choice for other global citizens. So, how did Starbucks gain acceptance with more than 70 cultures and erect stores on every populated continent? There is more to international expansion than simply copying and pasting your original business plans with new addresses. Localization is a necessary tool for every company aspiring to expand into international regions.
Starbucks’ utilization of localization is a staple of their success because they focused on the local culture, their own product, and resolving mistakes.
BLENDING THE CULTURES
Cultural nuances vary wildly around the globe. A client in New York is going to have a different set of expectations than a client in Malaysia. Understanding the culture is necessary for a localized product to be successful in a new region.
Starbucks began to feel the culture shift when they expanded to Europe, particularly France and Austria. There is a deeply ingrained café culture in Europe, and patrons are known to linger in the coffee shop well after their beverage is purchased and consumed, typically enjoying leisurely chats, business meetings, or just reading books alone. On the other hand, in the United States, patrons rush in and out, preferring drive-throughs and short lines.
Starbucks caught on to the difference between European and American customers and renovated stores to create a comfortable, luxurious space with more seating and free wifi. Culture will shape how and when things get done and understanding that process will make the transition into a new environment easier for a company’s expansion.
LOCALIZING THE PRODUCTS
When growing internationally, a company must tailor products and services for a new clientele, while still maintaining brand identity. Starbucks explored this delicate balance when expanding into the Chinese market. The Frappucino, a Starbucks original, is a popular blended beverage usually containing caramel, chocolate, vanilla or mocha flavors. After researching the cultural trends and preferences, they created the Red Bean Green Tea Frappucino as an alternative flavor. Starbucks altered their product to fit the clientele rather than expecting the clientele to adhere to their product, harnessing a successful localization strategy.
Understanding and resolving localization mistakes is a big step in improving public perception on a global scale. When Starbucks expanded into India, they didn’t enjoy the kind of rapid growth they were used to in other global regions.
Over a three year span, the coffee chain only opened 75 stores, which is relatively low considering India is home to over 1 billion people. At first, Starbucks continued their global strategy of selling primarily coffee, in a country that predominately chooses tea as their beverage of choice. Starbucks acknowledged this error and plan to bring their recently acquired tea company, Teavana to the region to increase sales.
IMPROVING THE PROCESS
Starbucks has (almost) mastered the extensive project of international expansion. Understanding the intended client and admitting to mistakes is crucial. Localization services providers offer assistance with these tricky tasks and make the process of global growth smoother.