Cultural Management Starbucks wants to enter South Africa, the "Rainbow Nation," and learn about doing business in Africa for future expansion across the continent. It has the conditions for success, but critical will be managing a multicultural team of employees in every store. There are 11 major languages in South Africa, highlighting the diversity of the country, and it has also become a magnet for immigrants from other African countries as well. Starbucks needs to implement programs such as employee groups in charge of multicultural initiatives and it should track the demographics of its workforce to ensure that they are diverse. Management teams should also be diverse. The company should have a multicultural management training program as one of its major controls.

Situation Analysis

The corporation to be discussed in this paper is Starbucks, and they wish to enter the South African market. Starbucks operates in dozens of countries worldwide. Its largest markets remain in the West -- the U.S., UK and Canada -- and Asia, where it has a large presence in many countries. The major growth initiatives right now are in China and India, but Starbucks is seeking large new markets and believes South Africa has strong potential. Another carrot for the company is that it feels that South Africa can be a base of operations and a learning ground for other African countries as well. In other words, Starbucks hopes to learn about the cultural aspects of doing business in Africa from a fairly easy African culture and apply that knowledge to an eventual expansion across the continent. This paper will discuss both the company context and country context of such a strategy.

Corporate & SWOT Analysis

Starbucks changed ownership and began expanding in 1986 and went international almost right away -- the company's 10th store was in Vancouver. Since that time, Starbucks engaged in a period of rapid growth domestically through the 1990s to the mid-2000s before a brief period of contraction. Many foreign markets were entered during this time....

There is considerable saturation in many of Starbucks' major markets, so it is seeking growth opportunities in large and economically powerful emerging market nations.
A SWOT analysis provides an opportunity to examine both the internal and external environments of the company. The basic SWOT for Starbucks globally is:

Strengths

Weaknesses

Opportunities

Threats

Strong brand

Insufficient diversification

BRICS markets

Competition from other coffee companies

Financially sound

Reliant on Schultz

New products/store concepts

Economic weakness

Great operations

Institutional market

Political risk in emerging markets

International competency

The company's success owes to a few things. It has a lot of strengths, both financially and in terms of its proven ability to translate its operations around the world successfully. Starbucks has learned a lot about doing business in foreign countries. It has excelled at this, for example in Japan and China where it adapted well to the needs of the consumers in these tea-drinking companies (Japan Today, 2013). Overseas markets are one of the company's major opportunities, if it can counter the threats posed by political risk and competition in particular.

Environment of Country Selected

South Africa is a large country (pop. 50 million) and one of the largest economies in Africa. It has racially mixed demographics with 11 national languages, multiple major African groups and two major white cultural groups as well. The country is known as the "rainbow nation" for this reason (BBC, 2013). The South African economy is resource-based, but it has a relatively strong manufacturing base for Africa. The country's economic power is concentrated in a handful of major cities, in particular Johannesburg, Cape Town, Durban and Pretoria. These cities are multicultural, urban and have significant opportunity for…