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Starbucks Global Expansion Strategy With A Focus On China

1073 words - 5 pages

STARBUCKS' SPILLS INTO CHINAAlthough the first Starbucks opened in 1971 it wasn't until the 1990s that the company became the iconic coffee symbol of America. Starbucks' popularity exploded along side a changing generation of young Americans who were on the move and connected to the world-wide-web, while yearning for bigger and better, no matter the cost. This generation quickly became known as the "Starbucks Generation" and now, a decade later; it's spilling over into a thriving China. Starbucks entered China in 1999 and has now made it their number one target for growth. Why and how did Starbucks venture into the orient? Let's begin by taking a look at their global/entry strategy along ...view middle of the document...

This economic step has proven both beneficial and detrimental to foreign companies alike due to the simple fact that while being able to broaden your market in China, competitors, both foreign and local, will also be able to benefit.The Chinese government has also been rumored to have possibly been directly involved in the recent closing of a Starbucks store in one of their oldest and historic cities. This city, known as the Forbidden City, is visited by roughly 9 million tourists a year. The Starbucks outlet, which opened in 2000, came under heavy protest led by an anchorman for China's largest TV network. Starbucks was given the option to continue to sell coffee if sold through a store operating other brands. Starbucks responded by bowing out gracefully and closed the outlet. The question remains that with recent tensions between China and the U.S. many American businesses believe the Chinese government was backing the protest. However, even with the possible government intervention China still remains Starbucks number one market, outside the U.S., with close to 400 stores. Knowing the entry strategies and possible government involvement, let's take a look at Starbucks potential future strategic factors.I believe Starbucks' future in China is dependent on two factors, keeping the consumer interested in the Starbucks brand and sourcing their coffee from Chinese growers. The emerging Chinese coffee drinkers see Starbucks as a type of restaurant and with a cup of coffee costing as much as a days salary for many, this new trendy generation, much like the American yuppie, see these outlets as a place to show off their sophistication and hip western ways. As long as Starbucks continues to focus on this target market they should have no problem keeping the coffee flowing.As for the coffee itself...

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