Starbucks' Success Story in China
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BSTR306
Case Length : 23 Pages
Period : 1998-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Starbucks Corporation
Industry : Coffee Retailing
Countries : China
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
Expansion Strategies in China
In December 2001, China became a member of the World Trade Organization . This event opened the Chinese market up to foreign investors. Several economic reforms and relaxation of laws in various phases followed, and these gave a fillip to Starbucks' expansion plans in the country...
Localization Strategies
Contrary to its usual trend of maintaining strict standardization techniques, Starbucks's strategy in China involved adapting the business to the local culture and market conditions. The company attempted several localization strategies to gain the confidence of the people...
Promotional and Pricing Strategies
The company avoided commercial advertisements and promotion in China. It mostly depended on the people to spread goodwill through word of mouth.
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Starbucks tried to market the 'Starbucks Experience' in terms of its store ambience, product quality, customer service, employee relationship, etc...
Challenges
Starbucks faced several challenges in China ever since it opened its first store in The Forbidden City, which was considered a seat of Chinese culture and tradition.
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According to analysts, people were against the commercialization of the palace area, more so with the opening of a store like Starbucks which, for the Chinese, symbolized a threat from the Western world. Many local people saw it as an intrusion into their traditional lifestyle and culture...
Outlook
In April 2008, according to news reports, Starbucks was looking to further expand in the country by opening about 80 new stores across the country. Moreover, reports suggested that it wanted to target the tier III cities after having built up a substantial presence in the tier 1 and tier II cities... |
Exhibits
Exhibit I: Some Significant Events at Starbucks Under Schultz: 1990-2007
Exhibit II: A Note on Starbucks Speciality Retail Business
Exhibit III: Beverage Market in China in 1999
Exhibit IV: Reasons for Starbucks Success in China
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