Global Marketing

Why Starbucks failed to expand their stores in Israel

Starbucks has established itself as the most popular coffee chain in the world with 24,000 stores in 70 countries and does 10 times the revenue of its nearest competitor, Costa Coffee. Even though Starbucks has found success in many countries, they have not been able to succeed in every market. One of these failures was in Israel.

In 2001 Starbucks opened their first store in Tel Aviv in 2001, and had plans to open 20 stores in their first year. By 2003 however, Starbucks decided to abandon the country entirely. One of these reasons was that Israel already had a strong coffee market that favored espresso and macchiato as well as flavorful Turkish coffee. They did not like standard American filtered coffee, which was a lot of what Starbucks provided.

A reason why Starbucks was able to succeed in the U.S. is because they brought a sense of coffee culture to the U.S., which was not a big part of the U.S. In Israel, they already had their unique sense of coffee culture which was their cafe culture. Starbucks did not do enough research of how they would fit into this market. A last failure of Starbucks in the Israeli market is that they did not take the advice of a local entrepreneur who wanted to give them an idea of how to adapt their product to meet the local taste standards.

Maybe one day Starbucks will try to reenter this market and will succeed. However, I think they are doing just fine at the moment.

Works cited:,more%20than%2025%2C085%20outlets%20worldwide.&text=In%202016%2F17%2C%20151.62%20million,of%20coffee%20were%20produced%20worldwide.