Posted: May 25th, 2022
Starbucks wants to enter South Africa, the “Rainbow Nation,” and learn about doing business in Africa for future expansion across the continent. It has the conditions for success, but critical will be managing a multicultural team of employees in every store. There are 11 major languages in South Africa, highlighting the diversity of the country, and it has also become a magnet for immigrants from other African countries as well. Starbucks needs to implement programs such as employee groups in charge of multicultural initiatives and it should track the demographics of its workforce to ensure that they are diverse. Management teams should also be diverse. The company should have a multicultural management training program as one of its major controls.
The corporation to be discussed in this paper is Starbucks, and they wish to enter the South African market. Starbucks operates in dozens of countries worldwide. Its largest markets remain in the West — the U.S., UK and Canada — and Asia, where it has a large presence in many countries. The major growth initiatives right now are in China and India, but Starbucks is seeking large new markets and believes South Africa has strong potential. Another carrot for the company is that it feels that South Africa can be a base of operations and a learning ground for other African countries as well. In other words, Starbucks hopes to learn about the cultural aspects of doing business in Africa from a fairly easy African culture and apply that knowledge to an eventual expansion across the continent. This paper will discuss both the company context and country context of such a strategy.
Corporate & SWOT Analysis
Starbucks changed ownership and began expanding in 1986 and went international almost right away — the company’s 10th store was in Vancouver. Since that time, Starbucks engaged in a period of rapid growth domestically through the 1990s to the mid-2000s before a brief period of contraction. Many foreign markets were entered during this time. There is considerable saturation in many of Starbucks’ major markets, so it is seeking growth opportunities in large and economically powerful emerging market nations.
A SWOT analysis provides an opportunity to examine both the internal and external environments of the company. The basic SWOT for Starbucks globally is:
Competition from other coffee companies
Reliant on Schultz
New products/store concepts
Political risk in emerging markets
The company’s success owes to a few things. It has a lot of strengths, both financially and in terms of its proven ability to translate its operations around the world successfully. Starbucks has learned a lot about doing business in foreign countries. It has excelled at this, for example in Japan and China where it adapted well to the needs of the consumers in these tea-drinking companies (Japan Today, 2013). Overseas markets are one of the company’s major opportunities, if it can counter the threats posed by political risk and competition in particular.
Environment of Country Selected
South Africa is a large country (pop. 50 million) and one of the largest economies in Africa. It has racially mixed demographics with 11 national languages, multiple major African groups and two major white cultural groups as well. The country is known as the “rainbow nation” for this reason (BBC, 2013). The South African economy is resource-based, but it has a relatively strong manufacturing base for Africa. The country’s economic power is concentrated in a handful of major cities, in particular Johannesburg, Cape Town, Durban and Pretoria. These cities are multicultural, urban and have significant opportunity for Starbucks to grow. There are many home-grown coffee chains in South Africa as well as independent shops to provide competition. There is political risk, however, in that the current government is perhaps less effective and definitely less inspirational than previous regimes, and the recent death of Nelson Mandela might destabilize the country as well.
Goals & Objectives
There are two major goals for Starbucks to succeed in South Africa. The first is simple market economics — they want to become the market leader. The second is more complicated. Most African countries are multi-ethnic, and this can pose some challenges. Most foreign retail and fast food companies have very limited presence in Africa. Becoming skilled in the South African market, taking a truly cross-cultural “rainbow” approach will teach Starbucks how to manage marketing, human resources and political risk across the continent. Managing diversity is both a challenge and an opportunity for Starbucks. Not only is South Africa diverse, but its cities have immigrants from all over Africa — Angola, Mozambique, the Congo, Zimbabwe and more. This increases the cultural complexity because there is some tension between newcomers and the existing African peoples, but this is also an opportunity to create knowledge and expertise of those cultures before entering those markets.
Luthans and Doh (2009) note that there is often conflict between local cultures and corporate cultures. Starbucks relies on delivering a highly-consistent experience around the world for its success, and this means that local employees need to adapt to the Starbucks culture. The challenge is therefore for the company to find a way to blend the different African cultures and its own corporate culture into a cohesive culture that it can translate anywhere on the continent.
Strategies and Tactics
Starbucks needs to place significant emphasis on multiculturalism in South Africa. Luthans and Doh (2009) would categorize the company as an international corporation, and the groups at its new South African locations will be multicultural (Afrikaner, Bantu, Xhosa, immigrant, etc.). Building trust is the most important condition for effectiveness in a multinational operation. In addition, Starbucks managers must recognize that all members of the organization should be aware that their success is mutually dependent, but also that there are conflict resolution mechanisms in place that are fair and can be trusted. With such tactics, the company can leverage the power of its multinational workforce.
Controls & Evaluations
There will be strong financial controls, but it is important in South Africa to have colorblind procedures for promotion, hiring and employee evaluation. This is important, because of the historical problems in that country with racially-based policies. Training is a big part of the control program. The company should track its demographics to ensure that the stores are reflective of the community as well. Management should be multicultural as well — this will help the company prepare for future expansion in Africa. There should also be periodic reviews from a panel of employees in charge of multiculturalism at the company. Such panels would provide an opportunity for Starbucks to foster a strong multicultural culture from within the company.
BBC. (2013). South Africa profile. British Broadcasting Corporation. Retrieved February 21, 2014 from http://www.bbc.co.uk/news/world-africa-14094760
Japan Today. (2013). Starbucks on track to open 1000th store in Japan. Japan Today. Retrieved February 21, 2014 from http://www.japantoday.com/category/business/view/starbucks-on-track-to-open-1000th-store-in-japan
Luthans, F., Doh, J. (2009). International Management: Culture, Strategy, and Behavior. McGraw-Hill.
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Place an order in 3 easy steps. Takes less than 5 mins.