Starbucks China Marketing Strategies

CONTENTS1.Introduction............................................................................................................2.ExternalEnvironmentalAnalysisofStarbucksChina............................................................Macro-Environment-PESTEL............................................................Macro-Environment-Porter’sFiveForces...........................................Opportunities.........................................................Threats.........................................................3.InternalEnvironmentalAnalysisofStarbucksChina.........................................................CriticalSuccessFactors.........................................................Opportunities.........................................................Threats.........................................................StrategicCapacibility.....................................................ValueChainandValueNetwork.....................................................Strengths.....................................................Weaknesses.....................................................4.StrategicFitAnalysis.....................................................5.Conclusion...........................................................................................................6.References............................................................................................................7.Appendixes..........................................................................................................1.IntroductionIwilluseseveralstrategyanalysismodelslikePESTEL,5Forces,ValueChainandSWOTtomakeanall-roundassessmentofStarbucksCorporationinmainlandChina.StarbucksCorporationwasfoundedin1971,itistheoneoftheworld'sleadingprofessionalcoffeeretailers,roastersandbrandowners.In1987,thecurrentCEOMr.HowardSchultzboughtStarbucks.InJune1992,asthefirstprofessionalcoffeecompany,Starbuckssuccessfullybecamealistedenterprise.Starbuckshaslongbeencommittedtoprovidecustomerswiththehighest-qualityofcoffeeandservices,ithascreatedakindofuniqueStarbucksExperience,soastoletStarbucksbecomeawarmandcomfortableThirdlivingspaceofpeoplearoundtheworldbesidestheirworkplaceandresidences.Atthesametime,thecompanycontinuestoholdavarietyofactivitiestorealizeitssocialresponsibility,makecontributionstocommunitiesandtheenvironmentalprotection,rewardpartnersandfarmersincoffeeproducingareas.StarbucksisoptimisticaboutthegreatpotentialofChinesemarket,itiscommittedtomakeChinabecomethelargestinternationalmarketoutsidetheUnitedStateinthenearfuture.SincethefirstChinesestorewasopenedinBeijinginJanuary1999,Starbuckshasopenedmorethan250storesinthemainlandtillnow.InSeptember2005,StarbucksChinaEducationProjecthasbeenestablishedtohelpimproveeducationalsituationespeciallyinthewesternregion.Bytheendof2005,StarbuckssetupStarbucksEnterpriseManagement(China)Co.Ltd.inShanghai,whichismainlyresponsibleforthestrategicdevelopmentofgreaterChinamarket,aswellasmarketdevelopmentandoperations.ExternalEnvironmentalAnalysisofStarbucksChinaMacro-environment-PESTELIwillusethePESTELAnalysis(seeAppendixA)toassessthemacro-environmentoftheretailcoffeeindustryinmainlandChina.Generallyspeaking,thepoliticalandsocialenvironmentinChinaisstable.Economyhasconstantlydevelopedinrecentyearsandcoffeechainstoreshasenteredintopeople’slife，especiallyinsomemoderncitiessuchasBeijing,ShanghaiandGuangzhouetc.Table1:PESTELanalysisoftheretailcoffeeindustryinmainlandChinaPoliticalChina’sentrytotheWTOGovernment’slevyingofforeigncapitalintoretailindustryTraderestrictiontolimitedexportsForeigentradeagreementsprovideastableglobalenvironmentTaxstructureadjustmentpromotesbudgetoptimizationEconomicRapideconomicdevelopmentInflationenlargesconsumptionIncreasingstorerentfeeHighCPIincreasesrawmaterialcostsandsqueezeprice-risingspaceUrbanizationstimulatesdemandofcoffeePotentialpurchaseonlocalcoffeebeansSocialCoffeebecomesapopularbeveragesinChinaCoffeesatisfiedthenotionofmodernlifestyleWesternculturestimulatecuriosityTechnologicalAdvancedcoffebeanproducingandroasting/blendingtechnologyPromotecoffeeculturethroughinternetFreewifiservicesinstoresScientificinternaldatabaseProfessionaltrainingforthebaristaEnvironmentalMakeeffortstorecyclinginstoresSaveenergyandreducepollutionSetupcooperationwithenvironmentalorganizationsLegalObeylaborandemploymentlawsProvideemployeeinsuranceandwelfareAvoidchildlaborprovisionsAdheretotheFoodSafetyLawSticktoenvironmentalprotectionlawsMicro-environment-Porter’sFiveForcesStarbucksretailcoffeestoreshaveexperiencedgreatdevelopmentinrecentyearsinChina.However,asmanyothercoffeegiantsaroundtheworldenterthisindustry,forexample,CostaandMacdonald’s.InthissectionIwillusethePortersFiveForcesframeworktomakeananalysistheexternalenvironmentofretailcoffeeindustryinChina.Iassessfivekeyforcesinthemainlandretailcoffeeindustryincludingthethreatofnewentrants,threatofSubstitutes,competitiverivalry,powerofbuyersandpowerofsuppliers,inordertoknowtheindustry’sfeatureandlifecycle.Table2