Starbucks Expansion in China

Abstract In this case study, Starbucks will examine Starbucks' positioning skill and marketing mind about the coffee front which was immersed in tea for nearly 5000 years, with a focus on the ability of Starbucks to expand its business positively in China. This case study includes three questions: 1) Whether Starbucks should continue to expand in China. 2) After having not drunk coffee for 5000 years, the Chinese are persuaded to drink coffee instead of drinking tea. 3) Whether Starbucks' current marketing plan will be managed in China without advertisement.

In this article, we will explain the cultural issues faced by US companies in entering overseas markets. The focus of this article is to expand Starbucks to China. The two cultural dimension theories of Hofstede help to provide a deeper and clearer analysis of Starbucks challenges in continuing to expand the Chinese market. When a US company decides to enter a new international market, when developing an expansion strategy plan, it is necessary to identify and resolve several cultural issues. The company must well understand that not only brand new in Western and American cultural norms but also hostile for some country's nationalists.

The main political and legal factor Starbucks has entered into China is Communism. Starbucks was born in a successful democratic capitalist country. For entering China, we need not only a great deal of research on foreign law, but also a very strict and controlled government that dismisses Western practices. In 1999 when Starbucks began to expand, they expanded through joint ventures. Joint venture and dictatorship policy is a dangerous idea and Starbucks can easily fail

China is considered to be one of the world's largest markets, and since 1999, Starbucks has expanded its business domestically through licensing and joint ventures. For some reason Starbucks' joint venture in China has recently faced difficulties financing, and several factors indicate Starbuck's current strategy is not that good. Therefore, Starbucks recommends employing a wholly owned subsidiary as a future expansion strategy in China. Since the Chinese coffee chain store has been very stable and successful, the risk has been mitigated, Starbucks recommends that you acquire an existing joint venture, turn it into independent ownership and control the business To do.