Question

In your own words, how does Starbucks deal with potential cross-cultural issues when entering the China market. Propose your own solutions as well.

These are some cultural problem between USA and China:

• Hierarchy is more dominant in China than in the USA

• Americans way of talking can be found rude to the Chinese culture

• The Chinese are more inclined to foster a stronger relationship

• Social media influence in China is lower than the USA

• Status is very important in Chinese culture

Give some solutions to the problems.

Answer 1

It is true that Starbucks was never expected to win while acquring the business in China. Everybody thought that China having such a different culture won't accept Starbucks to be successful but actually it did by opening 1500 stores till 2015 in more than 48 cities. The solutions that Starbucks used for tacking the problems are:

1. It is true that Heirarchy is very prominent in China having various levels of officials governing the country. It was seen that the market was divided into various levels where no homogenity exists within the people. Thus, to solve this problem Starbucks partnered with three regional partners as part for their expansion plan. It entered as a joint venture in the north, partnership in the east, worked with Maxim' Carteres in the south which helped to acquire all the different levels of heirarchy effectively.

2. The culture difference is very prominent between both of two countries. To solve this problem, Starbucks essentially trained its employees and recruited the best employees from China as well to speak and traing the people about their native culture and language to make people adapt and feel interactive by doing the free communication with the people to maintain the ethical standards.

3. Chinese people go for the committed relationships. Thus, an important strategy to cover this was to invest in the employees. Starbucks has essentially done a great job in training the employees to make the people of China feel the personal touch and adapt with the environment. Employees are the heart for delivering the starbucks experience and thus are the best marketing ambassadors as well which did pretty good job for sustaining continuity.

4. Yes true, Social media influence in China is way lower than that of USA. And Starbucks understood this very well. Thus, apart from the digital marketing techniques, the company again adopted the traditional ways to make people attract towards this venture. By exposing the global brand name in the televisions, newspapers, billboards etc Starbucks made the people realize that this new opening in China would make them revolutionised their living.

5. At last, social status is very important for the people in China and Starbucks did understand the relevance. The creation of a happy environment where people could come, relax and have their favourite beverages is what Starbucks marketed about. And it didn't even harm the culture where people would be offended by them because that would challenege their traditional Tea culture. They basically targeted only the high class people where they know people would love to have different beverages and taste and thus, it was success in China.