Question

Failed Multinational Corporation: Starbucks

Mode of Entry: Joint venture
Give at least three examples and explain why Starbucks Failed in Malaysia as a joint Venture as multin.

Answer 1

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

Step-by-step 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.