The rise of multinationals such as Starbucks came with the advent of globalization, where trade restrictions were eliminated. Doing businesses in most countries abroad became much easier than before. Government regulations are more relaxed and tariffs were reduced or totally eliminated. These developments have given chance to big companies in the developed countries to capture bigger markets including the Third World. This has given rise to the issue of how to standardize product internationally and at the same time adapt to the individual idiosyncrasies of each country. Multinational firms such as Starbucks face this type of dilemma.
Product standardization is the introduction of domestic products internationally with a little or no modification (International Product Decision). Product standardization is done in commodities such as shoes. Multinational shoe firms such as Nike, Adidas and Reebok release shoes that are sold across different countries. The other way of marketing product is through adaptation. If the firm spouses this marketing strategy, it adapts domestic product to suit the foreign market. Product modifications are done. They can be specifically designed for foreign markets.
It is believed that ‘global marketing of standardized products can, however, lower operating costs, and with effective coordination exploit a company’s best product and marketing ideas" (Powers). One of the benefits of standardization is it allows current technology to adapt products and services to the local needs and wants. "It is also possible to tailor standardized strategies for different worldwide segments that exist cross-nationally" (Powers).
On the other hand, there are doubts on the standardizing domestic products. Some concerns raised against standardization are national prejudices (Powers). Buzzel posited that "it is a mistake to assume that product standardization is possible without careful consideration of the idiosyncrasies of each market, such as physical environment, the stage of economic development, cultural characteristics, the stage of product lifecycle, competition, distribution systems, advertising media, legal restrictions, and finding the right balance between local autonomy and central coordination" (Powers).
There is a need for both. Both have advantages and disadvantages. At this point, we will specifically be analyzing how Starbucks was able to make a decision on choosing between product standardization strategy and product adaptation.
The Starbucks’ Case
Starbucks is known for coffee. But people around the world know that it does not only offer coffee or food, it offers experience, tranquility, and class. This is something that the company has standardized. Covering three continents, the green and white emblem has dominated various countries. Starbucks management has decided to standardize the product all over the world. Its cozy interior, plus