Principles of International Business

Running Head: PRINCIPLES OF INTERNATIONAL BUSINESS 1
Principles of International Business.
Name:
Institution

Principles of International Business 2
Introduction to the issue that international managers face
at the chosen company
Globalization is a process that, using international strategies, assist businesses to expand
into the global markets. This is due to the proliferation of transport and communication
infrastructures, facilitating the connectivity between different countries in the world. The
purpose of globalization is to offer businesses with a competitive advantage through widening of
the consumer markets and reducing the operating cost. The main strategies used by organizations
to take the advantages of globalization are localization and global standardization strategies
(Patel & Lynch, 2013). Localization is a more effective strategy for an international manager to
facilitate the acceptance of product or services for the international market. It will also facilitate
the performance of the organization by building the reputation of the brand and attracting new
consumers to the brand. Starbucks is a coffee making company that has its operations in
Australia. The company has faced the issue of applying localization when venturing into new
global markets.
Discussion in more detail of the issue
Despite the onset of globalization, many consumers are very much concerned with the
happenings of their local area. It is, therefore, necessary for businesses seeking to venture into
the international markets to connect with the consumers in their playing field, this means
understanding the culture, language, and traditions of the local market and tuning the product or
services in line with the needs of the local consumers. Localization is all about building trust
with the consumer through optimization of the brand in ways that it can relate with the customers
(Oh & Ahn, 2014). Other benefits of localization include enabling the business to meet the
consumer needs effectively. Localization also attracts more consumers to the product as they can
relate to the products that are in line with their cultural ways. In their initial attempt to enter the

Principles of International Business 3
Australian market, coffee giant Starbuck failed miserably by not considering the Australian
culture and food patterns. Starbucks failed to localize into the Australian market by not offering
food menus, as so was the norm of the local coffee shops. Another reason for its failure was
because rival coffee shops had already introduced the concept of “third place” long before
Starbucks had been founded in America (Lee, Madanoglu & Ko, 2013). The Australians were
already enjoying espresso lattes in coffee shops set up by Italy and Greek immigrants. Starbucks
was therefore viewed as an imitation of these other coffee shops. Perhaps Starbuck picked
valuable lesson from the Australian experience and consequently applied localization in the
Chinese market. As of 2014, there were approximately 1,367 Starbucks stores in China
(Radomska, 2014). In its China market, there are different offing in the menu such as traditional
Chinese cookies. Also, the layouts of the stores are arranged in such a way that they can
accommodate a large group of people. This is because contrary to the Australian and American
culture, Chinese people come in a large group and prefer to sit and relax.
The main difference between organizations that normally engage in international
practices and one which is successful in its growth and performance is the use of localizations. In
implementing localization, the international manager should employ the following strategies.
The managers should hire local employees as they best understand the demographics and culture
of the area (Roudometof, 2016). These employees can effectively employ the mandate of the
organization by tuning the product and services of the organization to suit the taste and needs of
the consumer. The managers should also be clear in defining the goals and objectives of the
organization. This, in turn, should be embedded in the operations of the organization in order to
make the brand stand out from the competition (García, Gaitán, Cataluña & Moreno, 2016). An
already established brand attracts more consumers as they carry an aura of legitimacy. In