Chinese Starbucks Essay

Starbucks has found advantage in the USA because of trade towards 20-40 year old work force and women who atomic number 18 concerned with social welfare thus creating the c bump offee kinfolk atmosphere-Heather Karr Employee of Starbucks in Madison, WI. The drinking chocolate house in the US includes college students studying, young professionals having casual meetings, Soccer Moms grabbing a cup of Joe after dropping the kids off at school, etc. All-in-all Starbucks is selling not coffee but the idea of a coffee introduce, a time during the day that one can sit back, relax, and forget well-nigh the daily grind.Starbucks had to project this as part of their main success and research chinas culture to see this aforementioned(prenominal) possibility existed for them there. fortuitously they found that it did. Due to chinawares communistic government implementing a unrivaled Child Law the same age demographic surprisingly existed 20-40 year old men and women who motive a pl ace to socialize and take a break from their lives. The Family Planning Law in China was implemented to ascendancy the growing population in China, has many exceptions, and began in 1978 (enforced in 1979).Learning about this law in a history class frontly, I never considered it in a marketing aspect. These individuals have gr declare up as single children and may have a sense of entitlement. They are well educated as the US media is always reporting on their countries amazing international soma reports. So, this group of Little Emperors are more aware of western culture than generations previous and Starbucks had to of discovered that they could curb these people a taste of the western world. Lastly, Starbucks had to consider Chinas tea consumption out front expanding.While the US likes their coffee, China prefers tea in their social events. How could Starbucks take their signature product of coffee and still be successful? They had to sell the coffee house experience and that s exactly what they did. 2. cover the key political and licit factors Starbucks had to consider in the Chinese marketplace. What are the risks of entering a dry land with these factors? What changes have occurred in Chinas polit- ical and legal structure to the advantage of foreign companies? The standout political/legal factor for Starbucks expanding into China is Communism.Starbucks company originated in a democratic capitalistic country where it became successful. Expanding into China requires a lot of research into not just foreign laws but a very strict and arrogant government that frowns on western practices. In 1999 when Starbucks began its expansion they did it with joint ventures meaning they licensed the right for Chinese citizens to sell Starbucks coffee and use their logo. Joint ventures and dictatorship are risky ideas and Starbucks could have easily failed.They make their risk minimal by only receiving royalty fees for the license to use their logo. China became a fellow member of the World Trade Organization in 2001 thus opening the ability for American companies to freely figure in their market. Starbucks took this opportunity buy out is partners and take control over the 60 stores in human beings in 2006. From 1999-2006, Starbucks had plenty of time to learn about Chinese culture and educate themselves in Chinese business that allowed them to feel confident about expanding in the future.3. What demographic factors were important for Starbucks to understand in China? What were the demographics they decided to target? As I stated in my answer to question one, Starbucks had to understand their own target demographic in the successful US market and see if they could replicate that in China. Luckily for them it did. Political factors like the One Child Law gave way to a culture shift among previous generations that allowed for the 20-40 year old demographic to thrive.These citizens are independent, educated, and desire to socialize amongst t heir peers with no where to feel at space in. Starbucks, by tweeking their menu slightly and adding more dining space than other shops in other countries, suitable to these Chuppy demands and found success. 4. What was the initial orbiculate-market strategy Starbucks employed to enter China? Discuss the advantages and disadvantages to this early strategy. How has their strategy changed since therefore and why? Initially Starbucks implemented a joint venture strategy.Meaning, they licensed their company for use in China believing that Chinese business individuals could have a better chance at success than they could. They also took that opportunity to learn and educate themselves about Chinese culture and business all the season receiving royalties for the licenses. This was a minimal risk for them as China was not a country that allowed a global market place to exist until its membership in the WTO in 2001. Their membership created an opportunity for Starbucks to take control o f its licenses and eventually to expand further into the country.