How Starbucks Failed in Israel Essay Example
African Journal of Marketing Management Vol. 3(4), pp. 78-88, April 2011 Available online http://www.academicjournals.org/ajmm ISSN 2141-2421 ©2011 Academic Journals
Review
Lack of peripheral vision – How Starbucks failed in Israel
Avner Barnea
Ono Academic College, Israel. E-mail:avnerpro@netvision.net.il Tel: +(972)522498639. Fax: +(972)46265011.
Accepted 27 April, 2011
This study was conducted to discuss the unsuccessful experience of Starbucks in Israel and to show that it was primarily a result of lack of peripheral vision in addition to other factors, including a weak management performance. Relevant information published in Israel and abroad were gathered using the concept of peripheral vision, supported by other concepts, to analyze and offer insight into this case study. Starbucks in Israel made major mistakes, mainly in reading the map of the local coffee shop business and taking for granted success in the Israeli market. There was lack of up-to-date information on the local coffee shop business, and the relevant senior members were reluctant of being interviewed. This study can make a contribution to global corporations considering entering of Starbucks into the Israeli dynamic and competitive business arena. This is the first work in Israel and worldwide on the failure of Starbucks to penetrate Israel. Key words: Competitive intelligence, marketing intelligence, peripheral vision, predictable surprise, Israel. INTRODUCTION In the beginning of April 2003, Starbucks, the world leader in coffee shops with 7000 locations worldwide and total net revenues of $ 4 billion in 2003 (http://investor.starbucks.com, 2003 ), ended its operation in Israel and closed its six stores after almost two years of a tough struggle to survive (http://www.haaretz.co.il, 2003). This is the only country where Starbucks surrendered. Starbucks had faced market entry difficulties in countries such as Austria and Switzerland (http://www.haaretz.co.il, 2003) but it had
Review
Lack of peripheral vision – How Starbucks failed in Israel
Avner Barnea
Ono Academic College, Israel. E-mail:avnerpro@netvision.net.il Tel: +(972)522498639. Fax: +(972)46265011.
Accepted 27 April, 2011
This study was conducted to discuss the unsuccessful experience of Starbucks in Israel and to show that it was primarily a result of lack of peripheral vision in addition to other factors, including a weak management performance. Relevant information published in Israel and abroad were gathered using the concept of peripheral vision, supported by other concepts, to analyze and offer insight into this case study. Starbucks in Israel made major mistakes, mainly in reading the map of the local coffee shop business and taking for granted success in the Israeli market. There was lack of up-to-date information on the local coffee shop business, and the relevant senior members were reluctant of being interviewed. This study can make a contribution to global corporations considering entering of Starbucks into the Israeli dynamic and competitive business arena. This is the first work in Israel and worldwide on the failure of Starbucks to penetrate Israel. Key words: Competitive intelligence, marketing intelligence, peripheral vision, predictable surprise, Israel. INTRODUCTION In the beginning of April 2003, Starbucks, the world leader in coffee shops with 7000 locations worldwide and total net revenues of $ 4 billion in 2003 (http://investor.starbucks.com, 2003 ), ended its operation in Israel and closed its six stores after almost two years of a tough struggle to survive (http://www.haaretz.co.il, 2003). This is the only country where Starbucks surrendered. Starbucks had faced market entry difficulties in countries such as Austria and Switzerland (http://www.haaretz.co.il, 2003) but it had