People around the world know the importance of making a business succeed. However, most of them think a business is just about principles and making money out of the business. A layman ends up assuming that culture and its issues that may follow do not matter. But, what we have to understand is that people will only do business with people they trust and like. And for this to happen, culture plays a major role in it.
Like you would be thinking right now, the impact culture has on a business or management principle is indeed high. Culture is a decisive factor in how employees are treated in the company and what values and priorities are followed. It also influences the decision taken in the functional areas of marketing, sales, and distribution. You might have not heard this before, but culture can also influence a business's decision on what is the best way to enter new markets. Let's take a look at how culture can influence various businesses and markets in different countries.
Starbucks, one of the best coffee retailers in the world, faced a financial crisis in 2008. Due to the rapid expansion, they were undergoing, Starbucks ended up facing a financial meltdown that was more than they could overcome. One of the major reasons for this crisis was the economic crises in the US and the world economy. The second reason was something that was mentioned before, their rapid expansion strategy. These two factors and an added competition from McDonald's resulted in them losing their customers and audience. By March 2008, their profit had fallen 28% as compared to last year's. As a result, they also had to lay off 12000 job positions. Even loyal customers who were interested in only buying from Starbucks switched to other brands as the rapid expansion caused the customers to lose out on the unique experience they enjoyed while they ordered from Starbucks. Now, how did Starbucks solve the crisis? Schultz, the CEO of Starbucks realized that their growth strategy was the root cause of their downfall. To come back stronger than ever, they decided to implement a technology-oriented strategy. A community involvement tactic was introduced to include both customers and employees. In 2008 itself, Starbucks came up with an idea called "My Starbucks Idea" where customers could voice their opinions on everything from management to instore music. This idea ended up becoming a huge success. From this, over 100 ideas were implemented. This helped them reignite the brand trust they used to have before. They also introduced another idea where customers could personalize their drinks and others could buy them as well. This was known as "My Starbucks Signature." They also included the employees and baristas who worked for them to put in their ideas and concerns. This was how Starbucks helped itself come out of the financial crisis they were in.
In Japan, Odakyu Electric Railways are one of the major players when it comes to transportation. Every day, they carry around 2.1 million passengers to their destinations. Odakyu also owns the largest fleet of buses in Japan and taxis as well. In recent years, Odakyu has been fighting actively against climate changes and looking for eco-friendly options to travel. As an addition to this, Odakyu decided to partner with Shotl, a mobility platform in Spain. Through a network of small buses and vans, they aim to reduce the carbon footprint transportation causes on the environment. The goal of this company is to give valuable options of transportation to areas with a higher population. In 2019, Odakyu was looking to partner with a company to develop a new on-demand public transport. That's when they heard of Shotl and decided to partner with them They wanted to build an on-demand transport that picks up and drops people in real-time based on their demands. This partnership also looks at reducing greenhouse gas emissions and achieve carbon neutrality. This is also aimed at people who can travel freely without having any restrictions due to their age, physical fitness, or other issues.
The Gujarat Cooperative Milk Marketing Federation Ltd or AMUL in India has one of the best success stories ever seen in the world. It involves the production of milk, cheese, and various ice cream flavors. These products are marketed through 50 sales offices throughout India and 50,000 retail stores. When they realized that the traditional way of marketing will not help them reach their goals. In 1995, AMUL decided to adopt the "Information Technology Strategy". Ever since then, they have seen a great rise in their sales and marketing. All the employees who work there since then, have had to receive training in e-commerce. Now, they only recruit e-literate people. AMUL cyber stores have now been set up in 150 areas around India, the United States of America, Singapore, and Dubai. All of these run-of-the-mill changes were accomplished in less than five years, especially when AMUL was categorized as an infrastructure that had weak technology and heavily relied on "look and feel" of their products.
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