The venture into the Chinese market by Starbucks demonstrates the various aspects of foreign markets that impact U.S. firms conducting international or global business. Cultural, social, economic, legal, and political differences among cultures have a direct and indirect impact on conducting international business. Due to the traditional closed nature of Chinese culture and markets to international businesses, ChinaÆs market illustrates a number of challenges for StarbucksÆ success in each of these areas.
The first advent into China by Starbucks created a furor throughout China because of the intended location of the Starbucks outlet. The Starbucks was to be located in the stone courtyards of BeijingÆs Forbidden City, home of the Sons of Heaven or Emperors (Starbucks 2002, 1). Social, cultural, economic, legal and political factors impacted this initial entry into the Chinese market. Socially, the media gave widespread coverage to the entrance of a symbol of marketing of the West into ChinaÆs most revered location. As the China Consumer Journal wrote, ôThis is no different from slapping ChinaÆs 1.2 billion people and 5000-year traditional culture in the face,ö (Starbucks 2000, 1).
The widespread media attention created additional cultural pressures on Starbucks and Chinese officials. Culturally, the Chinese are traditional consumers of tea. For many Chinese, coffee is bitter in taste and a luxury they can live happily without. According to one media poll, 70 percent of Chinese would rather not drink American chainÆs coffee in the Forbidden City, (Starbucks 2000, 1). The intense opposition among the Chinese and throughout the media to the location of Starbucks and the presence of Western coffee chains created pressure on politicians to prohibit Starbucks from entering the Forbidden City. As one analyst writes, ôThe media backlash took officials by surprise. They are conside
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