Starbucks Case Study

1. China had several cultural factors that Starbucks had to consider when expanding their company, one of them being that China is a tea drinking country. They are not accustomed to drinking coffee, so Starbucks has to introduce their product in a way that will make the people willing to try it. Another factor is that they are a bit strict on their disposable income, which is why Starbucks really marketed itself on the younger generations because they believed that is where they will make the most sales. The way that they did this was marketing themselves as "China's new sophistication."
2. When Starbucks entered into the Chinese market, the political factors that they had to consider was that China is a one-party dictatorship. This made China set in certain ways so it risked Starbucks because this could affect business quickly without seeing it coming. One major change is that since Starbucks first opened in China, is that Beijing entered in to the World Trade Organization. Before this the way that they established stores was by finding local developers to use their brand and to set up joint ventures with partners. This strategy was very successful because by 2006 they were able to buy their partnership out. Now foreign companies have a high advantage in China because when they hold a partnership rather than just a joint venture, they are able to more profitable.