Case Study Of Starbucks In Israel

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When you travel around the world, especially in the US and Europe, it is not rare to encounter the Starbucks coffee chain. Starbucks success all over the world isn’t random, although in few countries, including Israel, they weren’t profitable and successful as expected. The lack of success in Israel in the early 2000s, is due to several major reasons which will be detailed in this article. Since day 1, Starbucks core competency was related to enjoying fresh and quality coffee drinks, in a place where people could form a community, as well as spending their time in a “third place” area. This special area should provide a different experience where people can chill, work and have friendly meetings. Starbucks offers all around the world coffee…show more content…
Despite all the above, in Israel, Starbucks entrance (at 2001) wasn’t smooth as in other places. While in Middle-Eastern countries (which was supposed to act as a mirror to an Israeli Starbuck stores) they had very good results, Israel didn’t meet the same results. However, we believe that today, 16 years after the previous failure, there is much bigger reasonability to make Starbucks profitable in Israel, of course with slight changes in their new business plan.

As already mentioned, Starbucks had a serious crash when they entered Israel in 2001. We can nominate 3 main reasons for their falling. First of all, Israel was unlike other Middle-Eastern countries where Starbucks had success from the beginning. Secondly, we cannot ignore that Starbucks’ business plan in Israel (joint venture with “Delek: group) was not right to the Israeli market. Finally, the entrance to Israel was by “heart feeling” and not after deep examination of the area and the market prior to their entrance. So the first reason was the counting on the success in Israel’s neighbored countries and the belief that
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All of the mistakes mentioned above, can be fixed and improve. In addition, we can list two major reasons that are more relevant for today and can help Starbucks more than 16 years ago. Firstly, the fact that more Israelis travel abroad today, expose many of them to Starbucks, that continued to grow during that time. Israelis love Starbucks abroad and find themselves opening every morning in a Starbucks store, uploading photos in their social media pages. There is no doubt that Starbucks today is more common and lovable by Israelis. Secondly, the time during Starbucks previous attempt, was very tense. The pick of the “Intifada” was between 2000-2002, and having bad news on a daily basis, prevented many Israelis to go out and have fun, including spending time outside of home because people were frightened from suicide bombings. There is no doubt that today the situation is much more calm and Israeli people love to hang outside, especially to sit in cafes and that’s why we believe Starbucks has a place in our state. To summarize, we believe that Starbucks can expect a bright future if they decide to re-enter Israel. The surface today is much more comfortable to their new entrance and of course they had learned from their previous fatal mistakes. We want to believe that in the near

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