Can Starbucks Lay Seige To Russia?

Retail

Published: September 4, 2007 5:49 am

During WW II, the German army found out just how hard it is to invade Russia. Napoleon discovered the same thing 150 years earlier.

Now, Starbucks (SBUX) want to come to Russia, but the coffee retailers there are waiting. According to The Wall Street Journal when founder Howard Schultz’s book, "Pour Your Heart Into It," was translated into Russian three years ago, Vlad Lozitsky bought a pile of copies for his employees at Shokoladnitsa, one of Russia’s largest coffeehouse chains.

Starbucks probably made a big tactical error. It waited several years to get the company’s name in Russia as it fought a trademark dispute. That lost the company precious time.

In the meantime, Russia coffee shop chains have adopted most of Starbucks major practices. One local operator already has close to 175 stores.

Starbucks has never gone into a market where competition has been prepared to this extent. The company may find that being second won’t work.

Douglas A. McIntyre

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