Question 1.

The subject being examined is whether Subway was capable to flourish and achieve a significant

market position in Australia as opposed to Starbucks. As shown in the instance, the company's

narrative is explained in great length; yet they are few steps that subway took to ensure that their

worldwide growth beyond their native country into Australia was indeed a triumph. One of the

most important considerations that subway considered was that any country has its distinct

culture and customs (Patterson, Scott, and Uncles, 2010). Even before subway first entered the

Australian sector, it undertaken research and discovered that the large proportion of Australians

appears to lack understanding of how to live a wholesome and more balanced life. The above

aided subway not just to unveil its brand to the Australian business and customers, but

furthermore to build a culture. Subway's expansion in Australia was slow, with outlets opening

in numerous locations. Whenever Starbucks first introduced itself to Australian clients, there was

little evidence of cultural identification or adaptation. Starbucks entered Australia as a prestige

label that provided people with coffee not just as a necessity but also as a perspective.

Nevertheless, Starbucks struggled because they did not do market analysis and missed to

recognize that Australians possess a rich tradition in which coffee always served a significant

role. As revealed in the instance, Australians would like to have their coffee with their buddies at

a local coffeehouse rather than pay a higher cost for coffee that diverged from their tradition and

accessibility. This is why, in the formative days of its debut to Australian customers, Starbucks

suffered massive losses, resulting in the closure of over about 61 stores. Furthermore, the subway

paid close attention to the instruction and intercultural adaptation of their employees. Subway

offers a number of training centers in China as well as Australia. It permits the employees to be

highly versed and aware of the buyers' and their wants. Subway is entirely franchised and
individually owned by its proprietors. They must be fully informed of their local clients'

demands and preferences. Each subway station in the country responds to the demands of its

local customers by offering speciality goods on their menu. This enabled people to gradually

develop a culture of healthier options, and these were easily accessible because to Australia's

enormous number of retailers (Adams, 2012). On the other hand, it is clear that Starbucks had

neither consider cultural demands and variances, but instead chose to establish several outlets,

which resulted in a failure since the "Australian customer did not have the chance to truly create

a desire for the Starbucks business model."

Expanding a business globally is always a struggle. Organizations expand globally with the goal

of entering new industries and client categories; this strategy is critical to their development and

prosperity. These are a few methods that subway has considered into mind in order to properly

serve to the sector in which they are functioning in Australia as well as other nations across the

world. To commence, all subway stations are independently leased and managed. The franchisor

must pay a set cost of $12,000 to obtain the Subway brand, with the remainder going to the store.

Entrepreneurs are enabled and motivated by a degree of autonomy over their businesses. As

shown in the earlier stated scenario, that subway serves a vital part in understanding the

demographic requirements of the nation into which they are growing, thus it is critical for the

employees and subordinates to be well informed of the individual communities and preferences.

As a result, subway has established a number of training facilities around Australia (Kennison,

1991). Enabling employees to engage in these learning facilities would not only motivate them to

properly do their responsibilities, but will also provide them with a thorough understanding of

the complete process of making a superb sandwich, since the ultimate result is what truly works.

Consumer demands from the user viewpoint are extremely crucial for any organization to be

lucrative, thus it was critical for subway to provide a healthy solution to Australian consumer. It

took some time, but with development and improvement, Australian consumers were exposed to

subway as a healthy option, which formed an important component of many people's daily diet.

The rationale many people felt this trend toward consuming healthily was because there was a

time when many people were struggling with overweight (Thorburn, 2005). Being a major

healthcare issue, Australian customers perceived Subway as a richer and cleaner choice to

integrate into their diets. With many locations positioned in numerous regions, one advantage
subway had over their rivals was the high exposure as it was readily available. This enables

subway to instill brand loyalty in its clients with time. Despite the fact that there are other rivals

in the industry, subway remains the market leader since many customers believe it is one of the

finest healthy options offered in the Australian marketplace. Lastly, although there are numerous

worldwide fast food chains, like as KFC, that operate in the Australian industry, as well as

several local health food businesses, another aspect that subway truly took full advantage of was

its premium brand, and conventional waiters. Subway provided a broad range of options, not just

for condiments but also for breads, which intrigued customers and allowed them to incorporate

this healthier alternatives into their daily life (Clayton, 2002).

Starbucks, a well-known American company, is recognized for its diverse beverages, each of

whom is distinct to their taste and providing. Starbucks has chosen to enter the Australian

industry. Starbucks neglected to recognize the pre-existing coffee subculture that Australians

seemed very well acquainted of, resulting in significant damages and the shutdown of more

nearly half of their pre-existing outlets. Since the Australian coffee industry was so concentrated,

Starbucks should have gotten more suited expanding to a developing economy. An expanding

economy is a state with an expanding market sector that is expanding its industry in order to

become more developed. This has a moderate to intermediate per capita that is rapidly rising as a

consequence of high output levels and significant industrialization (Bhagat, 2011).

As emerging economies grow, they typically accomplish the rapid income growth which they

seek. As a government's population rises out of hardship, a consumer class arises, culminating in

a commerce overflowing with consumers ready for new commodities and solutions. If Starbucks

has the right offering plus a set of target markets, it may anticipate to expand its sales at a steady

rate. Additionally, emerging economies have begun to have an impact on global economy.

Companies who recognize that international markets allow them to expand at a lower cost yet

while having the power to disrupt the established paradigm. Businesses should recollect that if

they desire to fuel growth in emerging marketplaces, they should be cognizant of the potential

disadvantages that other companies have experienced, such as pricing their goods or services

highly competitive and positioning their offerings adequately to attract their target audience.

Knowing the native customs, market, and aspirations may be the most challenging challenge for

companies entering new markets. Considering emerging regions may be so complex,

organizations may benefit from designing market-specific strategy and products. This may be
done by taking the time to observe consumer habits and local customs in a company's target

market. Starbucks should seriously explore expanding into two countries: Bangladesh and India,

where Western society has had a significant impact on indigenous customers (Gourinchas, and

Jeanne, 2002). Nevertheless, conducting a thorough market study and investigation will help

Starbucks to truly expand into these countries. Because either of these countries have generally

designated as open growing markets, they both have the capability and purchasing power that

Starbucks need. Many countries will help Starbucks to expand its worldwide reach, and market

intelligence will enable them to mix local flavours with classic flavour’s, which will be

simultaneously valuable and accommodating to regular consumers.

As demonstrated in the cases of Starbucks as well as Subway, which both moved to Australia

inside the hopes of appealing to a considerably larger and more diversified client base, it is

critical for every global firm to endure a requirement for worldwide development in order to be a

profitable business. These suggestions, if implemented, would resulted in the firm being

successful from the start.

1. Business analysis - Execute market investigation to learn regarding the characteristics of

the market, its economic feasibility, market demographics, financial cost patterns, and

market estimates. With a comprehensive grasp of the project's feasibility, multinational

corporations will be able to determine whether or not the country in which they intend to

operate is lucrative.

2. Local culture - Intercultural differences can determine as to if or not a company thrives.

There is no incentive to proceed with a venture if the commodity or service can not

provide value or meet the needs of local industries. It is vital to have a good

understanding of whom your primary rivals are as well as how your clients appreciate the

utmost (Gordon and Beilby-Orrin, 2007).

3. Business competition - Rivals and their experience are extremely important for any

worldwide development. Multinational firms must be fully informed of their rivals and

what the market is like today. Without this information, they can design their marketing

plan and business entrance strategy, as well as where and why to position the commodity

amongst the rivals.

4. Business strategy - Such was observed when Subway moved to Australia, company

steadily grew as they evaluated the market and progressively exposed the product to
clients. Starbucks aggressively grew across the country, resulting in a dramatic collapse.

It is critical to start modestly since there is dependably the potential of a large catastrophe

if you enter the market too quickly. Another advantage of developing modestly is that

you may keep your costs and functions under control. Since both of these businesses are

part of our brand and possess an international footprint, they have a brand to sustain and

keep. Whenever an organization starts small, it enables it to evaluate the marketplace, as

well as the commodities and clients, allowing them to establish a perspective of their

business strategy. It is easier to handle a workforce if the firm adheres to worldwide

standards instead of developing at an unpredictable rate (Hashai and Almor, 2004).