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Click to edit Master subtitle style By Yousuf Ahmed, Natalie, Akos, Anne, Ronnie
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Starbucks History China and Market Analysis Mode of Entry Analysis Structural and Organizational issues Customer values and brand perception Cultural complexity and legitimacy Final Assessment 4/19/12
000 stores worldwide 4/19/12 • • • • • .History • 1971 – First store opens in Seattle 1983 – Howard Schultz joins Starbucks 1986 – Schultz starts II Giornale 1987 – Schultz buys Starbucks 1987 – First store outside Seattle 2011 – Over 17.
China • • Population – over 1 billion Famous for being a tea-drinking nation Business needs good relations with Government Restrictions on foreign investment in retail shops eliminated in 2004 4/19/12 • • .
Per capita GDP growth China's Per Capita GDP* 12 12 10 10 4/19/12 Per Capita GDP % change OECD 8 8 Per Capita GDP $ 6 6 4 4 2 2 *Gross domestic product based on purchasing-power-parity (PPP) per capita GDP 0 0 .Source: .
Starbucks’ market choices 1999 Hig h China (BH Taiwan) Australia (BH New Zealand) Western Europe South America Japan Malaysia Thailand Philippines Strategi c Importa nce Low Ability to Exploit 4/19/12 Low High .
Ghemawat AAA model 4/19/12 .
Ghemawat AAA model 4/19/12 .
Mode of entry Low Need to integrat e High Hig h Starbucks China JV Market Growth Low Need for local knowled 4/19/12 Low High .
country second.…partnership first. 4/19/12 ..
Regional Store Clusters 4/19/12 .
Starbucks store counts in China 12 10 8 4/19/12 No of locations 6 4 2 0 .
Market potential – Second home market 4/19/12 .
Malaysia. New Zealand. Philippines.Structural & Organizational Issues • Starbucks had previously entered into various international markets (Japan.) through joint venture and licensing agreements The organization has a willingness to respond to 4/19/12 • . Thailand and the U.K. Taiwan.
Russia and Africa) – 4/19/12 .S. Middle East. and International Now three regions: Americas.Subsequent to Initial Entry in China • Began to open up wholly-owned stores post-2004 Established a “China Club” at headquarters where over 300 individuals discuss the initiative in China and even learn to speak Mandarin Appointed several executives with applicable experience to be based in Shanghai Set up a R&D center in Shanghai to focus on producing new tea products as well as established a coffee farm and processing center in southern China Recently announced a new leadership structure – • • • • Previously two regions: U. China & Asia Pacific and EMEA (Europe.
Customer Values & Brand Perception • Customer Values – Importance of tea Young middle class and US expats – • The Starbucks Experience 4/19/12 .
Cultural Complexity • Cultural Complexity – Variety of cultures from various Hierarchical structure Highly relationship oriented Identify right partners. aligned with core values and goals companies regions – – • Mitigation – – ‘Mentor’ 4/19/12 .
Legitimacy • Acceptance by Chinese needed in order to succeed – Target market already Immerse itself into coffee $5M fund for charity in embraced American trends – bean supply chain – China 4/19/12 .
Final Assessment • Market Evaluation: Was China the right choice compared to other European or Asian Countries? • Business Structure: Did Starbucks make the right choice in pursuing a joint venture? • Product Development: Should Starbucks have adapted its product to be more locally relevant? • Quality Management: Did Starbucks sacrifice quality with its hands off approach? 4/19/12 • .
谢谢 问题 4/19/12 .