Starbucks Entry to China

Topics: Starbucks, Coffee, Coffeehouse Pages: 31 (10685 words) Published: September 15, 2010
The Center for Hospitality Research

Starbucks Entry into China
Starbucks Coffee International, a subsidiary of Starbucks Coffee Company has recently celebrated its first step into Southern China opening a new store in the country, the first one in Shenzhen. The store is owned by Coffee Concepts, a joint venture between Starbucks and Hong Kong’s Maxim group, who together have already opened 32 Starbucks stores in Hong Kong between 2000 and 2002.1 At the opening Pedro Man, president of Starbucks Coffee Asia Pacific Ltd., the Asian division of Starbucks Coffee International said: "As we celebrate the opening of our first store in Southern China today, we mark yet another key milestone in the history and tradition of more than 30 years at Starbucks. The heart of the Starbucks brand lies in two very important cornerstones our coffee and our people. Our passion for coffee means applying our coffee expertise and the highest standards of excellence to every detail of the coffee, from selecting and roasting the beans, to brewing the perfect cup of coffee." He added, "At the same time, our people are highly valued partners in creating the unique Starbucks Experience. It is

1 Business Wire. “Starbucks Celebrates First Store Opening In Shenzhen; Starbucks Brings Coffee Passion and Expertise to Southern China” Business Archives Visited November 20, 2002. Release dated October 18, 2002.

Written by Helen Chang, Carina Gauthier, Todd Joerchel, Jorge Nevarez and Amy Wang under the direction of Jeffrey S. Harrison at the School of Hotel Administration, Cornell University. Copyright c Jeffrey S. Harrison. This case study was written for the purposes of classroom discussion. It is not to be duplicated or cited in any form without the copyright holder’s express permission. For permission to reproduce or cite this case, contact Jeffrey S. Harrison ( Permission to use in the classroom will be granted free of charge.

Starbucks Entry Into China, 2 their passion, knowledge, unsurpassed expertise and enthusiasm which helps to create a truly outstanding coffee experience for our customers."2 Starbucks’ success in Asia has surprised many people. But the executives at Starbucks have been surprising critics for many years. How did a small coffee company from Seattle with 11 stores in 19873 grow into an international company with nearly 6,000 stores worldwide?4

The Story of Two Companies and One Man’s Vision
Starbucks Coffee, Tea and Spice opened its first store in April, 1971 in the Pike Place Market in Seattle. Its original owners, Jerry Baldwin and Gordon Bowker, had a passion for dark roasted coffee, which was popular in Europe, but hard to come by in America in the 1960’s. “They founded Starbucks for one reason: They loved coffee and tea and wanted Seattle to have access to the best.”5 Starbucks stood not only for good quality coffee, especially dark-roasted coffee, but also sought out to educate its customers about their product. Jerry, a literary lover, named the company Starbucks, after the first mate in Moby Dick, because it “evoked the romance of the high seas and the seafaring tradition of early coffee traders.” The original store did not brew and sell coffee by the cup, but instead offered up a selection of 30 different varieties of whole-bean coffee.6 Although they were bringing high quality coffee to Seattle, coffee was generally regarded as a produce item. In Italy, coffee bars serving up espresso drinks offered more than great coffee, they offered up a great coffee experience.7 It took the vision of one man to turn coffee from a commodity into an experience. His name was Howard Schultz. Howard Schultz was born in 1953, growing up in a housing project in Brooklyn. His father worked as factory worker and truck driver, and his mother worked as a receptionist. He received a football scholarship to go to Northern Michigan...
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