Starbuck Stragegy in China

Topics: China, Coffee, Song Dynasty Pages: 2 (640 words) Published: May 31, 2010
1. What are some of the decision factors that Starbucks assesses? 2. What role does the Chinese government play in Starbuck's operations in China? 3. What are some of their entry strategies?
4. What strategic choices do they seem to make? Explain how downsizing in the USA impacts their global growth in China and elsewhere. 5. List references.

Starbuck's Strategy in China

As a home grown U.S. company Starbuck's quickly saturated its market, and hence several years ago looked at the global market for growth. One of these global markets is China, the most populous nation and home of the record breaking double digit gross domestic product or GDP rates. However, the Chinese culture is so much different that the US culture, in fact some Chinese observers would say that the two cultures are apposite, hence careful strategic planning enhances Starbuck's success in its global extension in China. This paper assesses some of decision factors that Starbucks has to take into account in its Chinese expansion, the role of the Chinese government, entry strategies, and strategic choices.

According to Paul S. Biederman, the most pressing decision factor for Starbucks in opening a coffee shop in China is that the "Chinese are predominantly tea drinkers and are unfamiliar with coffee: (2005, p. 288). Thus one of the strategic choices and entry strategies that Starbucks adopted is to "upwardly mobile, predominantly young, and interested in consumer products, especially foreign items that have previously been unavailable" (2005, p. 288) who belong to a middle class which have been appearing in coastal areas and China's capital.

The success of Starbucks' venture into the Chinese market is supposedly smashing, but how smashing we don't know as financial data is not available largely due to the role of the Chinese government. That is, Starbucks manages its Chinese operations while the local licensee owns a controlling interest in the coffee company's shares. The fact that...

References: Biederman, P. (2005). Commentary on "Exporting a North American Concept to Asia: Starbucks in China." Cornell Hotel and Restaurant Administration Quarterly, vol. 46, no. 2, pp. 288-290.
Harrison, J., Chang, E., Gauthier, C., Joerchel, T., et al. (2005). Exporting a North American Concept to Asia: Starbucks in China. Cornell Hotel and Restaurant Administration Quarterly, vol. 46, no. 2, pp. 275-283
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