Competitive Advantages of Starbucks in China

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Competitive Advantages of Starbucks in China

I am going to work with Starbucks, because it is a company that is familiar to most of us and has investment plans in China for the next years. They are planning to expand themselves from a little over 200 stores to 1500 stores and try to increase their sales. As Howard Schutz, the CEO, said “same store sales in China are fantastic, so why not expand?” After their success in United States, Starbucks wanted to expand to other countries because the U.S. market was getting saturated with different competitors. Its first expansion was in Japan, this was because they were the second largest importers of coffee. This was such a good market that Starbucks started looking for other Asian markets. One of these markets was China. China is considered one of the most important markets due to its size and the growth they are having. In the past it was a very difficult market to enter because its strict protectionist policies, but since 2001 when they entered the World Trade Organization this has been easier. Starbucks entered this market by joint venture, with a company that had already introduced McDonalds and Hard Rock Café to the Asian culture. The competitive advantages Starbucks saw in the Chinese markets were many: •China`s culture has always been a tea drinking one, but they made marketing studies and realized that they liked the taste of coffee too. In fact nowadays coffee consumers are growing each day. •When Starbucks started to look at the Chinese market they realized that there wasn’t a direct competitor targeting the specific market they wanted to attack. And this market is growing every day. •Chinese culture in the last years has been influenced with western culture, specifically American companies like McDonalds, KFC, Pizza Hut, and others. These companies have captured the Chinese market, especially the young generations. This young generation has a better purchase power because they are only allowed to have...
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