21 years ago, Starbucks opened its first outlets in Israel. But after two years, they were nowhere to be found. This was so unbelievable for most people, especially those living in the west, that a great organization like Starbucks could fail. Why Starbucks failed in Israel? – let’s know.
Starbucks failed in Israel majorly because the brand was not accepted by lots of Israelis due to political, cultural and social factors. Israelis are not used to buying beverages at a one-stop shop it was a bit difficult to adapt to the Starbucks lifestyle.
In this article, we will be examining what led to the sudden end of Starbucks, the international coffee chain, in Israel. How and why it was rejected. This will let a lot of people who have been wanting to know what led to the failure of Starbucks in Israel since about 18 years ago.
Why it is failed in Israel?
Here are some reasons the American coffee giant was unable to survive for long in Israel; Why Starbucks failed in Israel? – let’s know.
Starbucks had to settle in a place
During that period, Starbucks had six offices in Tel Aviv, Israel. And for different reasons, the company tried as much as they could avoid other cities in Israel, even including the country’s capital city, Jerusalem. The reason was that, in Jerusalem, violence was an everyday thing. It’s not new to people anymore how lots of bad happenings occur in Jerusalem now and then.
History has it that in 1997, two suicide bombers caused an explosion in a crowded market in Jerusalem which led to the death of countless people while many other people got injured severely both mentally and physically.
This and many other reasons were what made Starbucks settle in Tel Aviv of the reason why Starbucks chose Tel Aviv as Tel Aviv was, and still is a city of food because up till today, there countless local restaurants on the streets of the city that can cause one to salivate.
Failure to partner with a Local Brand
One mistake Starbucks made in opening their brand in Israel was not working with local coffee or beverage brands. Working with a local brand that was already known to the Israelis would have helped Starbucks to penetrate the market without much effort. All they needed to do was to form a partnership with that local coffee or tea company. Eventually, Starbuck tried to do it on their own and it did not work out in the end.
Israel’s citizens and non-natives didn’t like Starbucks ‘ service
This led to the failure of Starbuck in Israel in their inability to adapt to their local culture. The Israelis were used to sitting with their friends and colleagues, discussing, while they take their coffee bit by bit. However, Starbucks could not allow them to do this to their taste as they want to outshine other food restaurants, so they had to serve as many customers as possible, making them troop in and out fast to give way for other customers.
The Israelis didn’t find Starbuck’s coffee attractive
This is one of the major reasons the coffee brand was unable to become a success in Israel. The Israelis did not like the idea of the brand, they preferred their local beverages to that of Starbucks. Probably they don’t get freaked easily by foreign brands or maybe, they just don’t want a foreign brand to dominate their domestic market.
Then, the Israelis didn’t like Starbucks ‘ products. They preferred taking the espressos and cappuccinos at their local cafeterias to Starbucks coffee.
An Israelite customer commented:
“You can walk into any Starbucks in the world, in any city, and get a consistently mediocre cup of coffee.”
So, Asides from the fact that they didn’t find the coffee to be tasty to their satisfaction, they could not also cope with not being given enough time to relax and enjoy their cup of coffee with their friends.
Israel’s Market no longer contained Starbucks
The coffee market of Starbucks was a big and great one, its size was large and it’s cosmopolitan. As time went on, it began to expand more in such a way that Israel couldn’t contain it any longer. Initially, Starbucks didn’t conduct their research well before settling in there, if they had done that, perhaps they would not have even settled there at all because they might have predicted that.
Starbuck had to end it right there as they had expanded so much. Up till today, it still has some outlets left in Israel.
Starbucks in other countries of the middle east
You might be wondering if Starbucks was able to plant stores in other Middle Eastern states, the answer is yes. Starbucks has stores in these Middle Eastern states;
- Bahrain
- Jordan
- Saudi Arabia
- Qatar
- Egypt
- Turkey
- United Arab Emirates
- Oman
- Lebanon
- Kuwait
- Morocco
Conclusion
As a foreign brand, it is advisable to stick to a local partner when settling a branch in another country. It’s important to choose a strategic local partner that will help you access the market. Lack of cooperation with local businesses in Israel among other things, led to the failure of Starbucks in the country.
Frequently Asked Questions
1. Asides from Israel, did Starbucks fail in other countries too?
No, Starbucks did not fail in any other country. It only failed in Israel as a result of the inability to adapt to the country’s culture and also poor research making before venturing in, therefore. Starbuck has branches in about 72 countries and they haven’t failed.
2. What cities are Starbucks most located in today?
New York, where it has about 241 stores, Chicago, where it has 184 stores, and San Diego where it has about 140 stores.
