SITUATIONAL ANALYSIS

Introduction of the company and product

Luckin Coffee is a coffee chain in China. The company was founded in Beijing
in October 2017. Most of its stores are small “pick-up” stores that are located in
office buildings or college campuses that serve for online orders’ pickup and
delivery.
Industry analysis
Status(斯搭忒斯) of China's coffee market: fresh ground coffee market has great
potential
Consumption(肯桑扑沈):
Small stock, large market potential
Industrial chain
In the industrial (因 搭 斯吹 哦 ) chain, primary processing and deep processing
technologies lag behind, and there are few well-known local coffee companies in
the downstream.

Target audience
For the stakeholders, out of Luckin's target customer group, the largest
stakeholder is the local coffee processing plant in China.
For the company's target customers, for now, Luckin's target customers are
mainly enterprise users. If other coffee shops are doing 2C business, then Luckin
Coffee has to go more like 2B.
Buy persona
Frank, an ordinary white-collar worker, 24 years old, works for an "A" Internet
company in an office building. He usually works from 9 a.m. to 5 p.m., and he has
only one hour at noon to eat and rest. There is a Luckin coffee on the first floor of
the office building. A company, as an enterprise user of Luckin, will order Luckin's
coffee and light meals for all employees in the company at noon every day. As an
employee of the company, Frank expressed satisfaction with such a lunch
arrangement, because in the past he often did not have lunch because of
insufficient time, which led to low afternoon work efficiency. And A company's long-
term order of food in Luckin also allows the company to get a lower price to buy,
which also allows A company to solve the problem of employees having too short
lunch breaks and no time for lunch, which improves employee satisfaction and
their work efficiency.
Competitors
Once Luckin identified the target customers, it's easy to find their main
competitors. Although Luckin's CEO had threatened to surpass Starbucks and led
many people to believe that Luckin's main competitor was Starbucks. But apart
from making coffee professionally, Luckin is totally different from Starbucks in
terms of user portrait, location, price and so on., but it is highly coincident with the
target population of convenience stores. Luckin's real main competitors are
convenience store coffee and instant coffee.
Challenges faced
Luckin will face at least two big challenges, one is the company's brand equity,
and the other is the trap of non-rigid demand markets.
First, compared to Starbucks, Luckin is just a new player in the market, and
the company's brand equity is much lower than the old brand.
Second, Consumers' coffee demand in China may have a large number of
alternative products. Another brand of coffee, tea or even milk tea could be the
challenger.