College

Failed Multinational Corporation: Starbucks
Mode of Entry: Joint Venture

Provide at least three examples and explain why Starbucks failed in Malaysia as a joint venture.

Answer :

Final answer:

Starbucks failed in Malaysia as a joint venture due to cultural differences, strong competition, and pricing issues.

Explanation:

Starbucks entered the Malaysian market through a joint venture with local partners, but ultimately failed to thrive in this context. Here are three reasons why:

  1. Cultural differences: Starbucks' Western-style coffee and cafe culture didn't resonate with the local population, who already had their own traditional coffee shops.
  2. Competition: Malaysia had a strong existing coffee culture with local chains like OldTown White Coffee and PappaRich, which posed tough competition to Starbucks.
  3. Pricing and affordability: Starbucks' premium pricing made it less accessible to many Malaysians, who preferred more affordable alternatives.

These factors combined to make Starbucks' joint venture unsuccessful in Malaysia.