Starbucks Expansion Into China
Starbucks expansion into China
Abstract In the following research we will look whether Starbucks will be able to launch an aggressive expansion throughout Mainland China, a country known for its tea drinking history dating back to 5,000 years. Starbucks is known for its ability to locate the business outlets in perfect spots as well as market their products in beneficial ways. This report will try to analyze the three main questions:
1) Should Starbucks continue its expansion in China?
2) Will the Chinese be willing to change their tradition of drinking tea, after 5,000 years, to coffee?
3) Will Starbucks current marketing plan work in China without advertising?
Company Overview The history of Starbucks dates back to 1971, that’s when the first coffee shop was, opened in Seattle, Washington in by three partners Jerry Baldwin, Zev Siegel and Gordon Bowker. The store only sold coffee beans and coffee brewing equipment, the actual coffee, which it is famous for only arrived later on. After 10 years of successful business, entrepreneur Howard Schultz was hired as director of retail operations in 1982, and, after his trip to Milan, he suggested that the company should sell coffee and espresso drinks as well as beans to maximize the profits. However the three partners rejected this idea, believing that getting into the beverage business would distract the company from its main focus. Certainly there was a lot of potential money to be made selling drinks to on-the-go to Americans; and so Schultz started the Il Giornale coffee bar chain in 1986. In 1984, the original owners of Starbucks, led by Baldwin, took the opportunity to purchase Peet's. In 1987 they sold the Starbucks chain to Schultz's I1 Giornale, which he immediately renamed as Starbucks and quickly begun a rapid expansion. Starbucks opened its first locations outside Seattle in Vancouver, British Columbia, Canada and Chicago, Illinois, United States that same year. In 1990
Abstract In the following research we will look whether Starbucks will be able to launch an aggressive expansion throughout Mainland China, a country known for its tea drinking history dating back to 5,000 years. Starbucks is known for its ability to locate the business outlets in perfect spots as well as market their products in beneficial ways. This report will try to analyze the three main questions:
1) Should Starbucks continue its expansion in China?
2) Will the Chinese be willing to change their tradition of drinking tea, after 5,000 years, to coffee?
3) Will Starbucks current marketing plan work in China without advertising?
Company Overview The history of Starbucks dates back to 1971, that’s when the first coffee shop was, opened in Seattle, Washington in by three partners Jerry Baldwin, Zev Siegel and Gordon Bowker. The store only sold coffee beans and coffee brewing equipment, the actual coffee, which it is famous for only arrived later on. After 10 years of successful business, entrepreneur Howard Schultz was hired as director of retail operations in 1982, and, after his trip to Milan, he suggested that the company should sell coffee and espresso drinks as well as beans to maximize the profits. However the three partners rejected this idea, believing that getting into the beverage business would distract the company from its main focus. Certainly there was a lot of potential money to be made selling drinks to on-the-go to Americans; and so Schultz started the Il Giornale coffee bar chain in 1986. In 1984, the original owners of Starbucks, led by Baldwin, took the opportunity to purchase Peet's. In 1987 they sold the Starbucks chain to Schultz's I1 Giornale, which he immediately renamed as Starbucks and quickly begun a rapid expansion. Starbucks opened its first locations outside Seattle in Vancouver, British Columbia, Canada and Chicago, Illinois, United States that same year. In 1990