Starbucks CEO on Globalization: Don’t Go Changing

Chief Executive Magazine recently featured a brief Q&A with Jim Donald, CEO of Starbucks. He shed some light on the company’s global strategy. in short, Starbucks is trying to change as little as possible in each new market they enter.

He says:

On a country-by-country basis, the largest hurdle we had to overcome was thinking we had to be different. There are regional differences in every market, but the main reason we are successful in the US is the same as why we are successful internationally.”

“I was in a Starbucks in Kuwait a year ago and other than the language spoken, I could have been in Tacoma.”

But Starbucks does indeed localize when it has to. For example, he says:

“The peak time in China is not 7 to 10 in the morning, it is 4 to 6 in the afternoon. And there are also food preferences we had to adapt to. There is the holiday Yorkshire pudding that is big in the UK but does not work in New York. Breakfast sandwiches in Germany, for example, are made up with a hard roll with sausage and tomato and served cold. So we listen hard to what our partners in a region say.”

Starbucks does what most companies do when they go global — which is as little as they have to. Localization isn’t easy and less is usually more. Of course, the magic comes from deciding what needs to be localized — and how best to do it.

6 Responses to “Starbucks CEO on Globalization: Don’t Go Changing”

  1. Justin Thorp December 4, 2006 at 2:03 pm #

    So the key is to create a core experience and then change for your localizations where you need to?

  2. John Yunker December 4, 2006 at 3:43 pm #

    I believe so. The key, of course, is in creating a core experience that will translate across cultures. Starbucks clearly believes that it’s more than just a coffeehouse, which has given it the flexibility it needs to succeed in a market where coffee isn’t hugely popular like, say, China.

    And I think that a lot of this evolves naturally. I can’t believe that the founder of Starbucks considered China when he started out But Starbucks has come a long way and developed a core experience that has traveled very well so far. But that global/local tension will always be there. Which is why small local coffee houses in the US are still around and, in many cities, are expanding.

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