Starbucks In China Case Study

Although 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 with decision factors. Secondly, we will focus on the Chinese government 's

Starbucks international entry strategy for China was basically two-fold. The first phase of the entry was to build the brand. In the initial stages Starbucks tested the waters by offering free cups of Starbucks coffee to hotel guests within the city of Beijing. This allowed Starbucks to see how coffee would sell in a primarily tea drinking market. With the combination of foreigners familiar with brand and the Chinese willing to blend-in with the western ways, Starbucks soon realized they had something brewing and pursued the China

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