Conquering a new international market can be tricky. Even the largest companies make mistakes — and you can learn from them. For example, here are 3 times big brands tried to expand into new countries, only to come limping back. Let’s see what lessons we can take from these international business failures.
Starbucks in Israel
With more than 24,000 stores in 70 countries, Starbucks is no stranger to international business. But their attempt at expanding into Israel was not quite so successful. The first Starbucks in Israel opened in Tel Aviv in 2001. The plan was to open 20 Israeli stores in just the first year. But by 2003, the coffee company was abandoning the country entirely. What happened?
Middle Eastern politics being what the are, the store closings ignited a firestorm of contradictory rumours. Did they close because they hate Israel? Are they secretly a “Muslim organisation?” Or were they secretly sending profits to support the Israeli Army? The truth is out there!
No, really, it is…it’s just not that exciting.
Starbucks expected Israeli consumers to give them the royal treatment, but they didn’t bother to thoroughly research the country’s existing coffee culture. According to The Jerusalem Post:
“In Israel, Italian cafe offerings like espresso and macchiato coexist with strong, flavorful Turkish coffee made simply by brewing coffee grinds in hot water and letting them settle into “mud” at the bottom of the cup. It’s rare to see a standard American filter coffee — in my experience it tastes like weakly flavored hot water.”