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Starbucks global expansion strategy with a focus on China
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Four SeasonsDuring the September of 2006 Diedrich Coffee which was a major competitor of Starbucks also sold most of its company owned stores to Starbucks. This also included the purchasing of the locations of the Oregon based Coffee People chain by Starbucks. All these locations and stores were converted to Starbucks style and renamed Starbucks. Many of the currently operating bookstores in US and UK have Starbucks outlets within them. During the year 2008, Starbucks sustained its growth, expanding to Portugal, Argentina, and Bulgaria. Starbucks plan to open new stores in Hungary, Algeria, Poland and Colombia during 2009. Starbucks entered China in 1999 right after it entered Japan China is still seen as a place having great growth opportunities by the Starbucks. The have expanded rapidly inside China after entering. Starbucks faces stiff competition by some major competitors in China as it is the country where tea and coffee have a strong bonding with their cultural values. Starbucks have gone in to some major contracts and relationships with partners in China helping them in meeting the standards of Starbucks. Starbucks is currently pursuing an aggressive expansion strategy in China focusing on the 1st and 2nd tier cities of China. The company sees China as one of the major markets after United States of America and does not hesitate in buying local equity to establish firm holds in the country. They see China as a potential market by the fact that the younger generation is adopting the American way of living their lives. Starbucks still has fewer numbers of stores in China as compared to Japan but they see this as an opportunity to grow in China. Starbucks plan to expand their operations in China further as they have only 200 stores operating their which is very less compared to the 600 in Japan. The Chinese population on the other hand likes the coffee that is being sold by Starbucks, and the likeness has given a morale boost to Starbucks for their expansion. It is simple and very obvious by the facts and figures that Starbucks expansion in China has been slow as compared to their expansion rate in other foreign markets. This is due to the fact that they have faced stiff competition by the local industry players and some cultural extremists, but this does not affect the confidence and morale of Starbucks. Starbucks plan to continue with its slow progress as they see China as a strategically important component of their long term plans. They have diagnosed a change in the living styles of the Chinese population and its direction towards the American way of life which is a positive sign for Starbucks. Bibliography Anonymous. Starbucks Calls China Its Top Growth Focus, Wall Street Journal, 2006. Economist.com/ Global Agenda.The forbidden latte Business view. 2007, p.1. Financial Times. Starbucks aims for new tier in China Cafes, February 14, 2006 Inkpen A., Ramaswamy K. Global Strategy: Creating and Sustaining Advantage across Borders, Oxford University Press, 2005 Michelli J. The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary, McGraw-Hill, 2006. Reuters. STARBUCKS IN CHINA. September 5, 2007.March 20, 2009. ;lt http://www.nypost.com/seven/09052007/business/starbucks_in_china.htm;gt Inkpen A., Ramaswamy K. Global Strategy: Creating and Sustaining Advantage across Borders, Oxford University Press,2005 Reuters. STARBUCKS IN CHINA. September 5, 2007.March 20, 2009. ;lt http://www.nypost.com/seven/09052007/business/starbucks_in_china.htm;gt Economist.com/ Global Agenda.The forbidden latte Business view. 2007, p.1. Anonymous. Starbucks Calls China Its Top Growth Focus, Wall Street Journal, 2006. Michelli J
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