Premium Essay

All the Tea in China and Starbucks

In: Business and Management

Submitted By woodzzy
Words 1241
Pages 5
All the Tea in China and Starbucks
Starbucks is a globalized organization that began by selling coffee, tea, and spices. The first store opened in 1971 in Seattle, Washington’s Pikes Peak Plaza. Howard Schultz joined as a marketing director in 1983 and during a trip to Italy was impressed with the coffeehouse and wanted to try this concept in Seattle. The concept and business flourished, and by 1996 Starbucks opened the first international coffeehouse in Japan. Since 1983 Starbucks has expanded globally with 18,000 retail stores in 60 countries. The first Chinese Starbucks was built in China in 1999 and is currently operating in more than 500 locations in China and plans to expand to 1500 locations by 2015. Starbuck’s mission statement: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks, 2013, p. 1).
Starbucks not only sells premium coffee and teas, Starbucks sell a culture of excellence in customer service, and brand with the expertise of the partners (employees). Starbucks sells a lifestyle, an ambiance of the tranquil coffeehouse environment for the busy professional, student, or coffee connoisseur. So how has Starbucks, mainly known for the premium coffee sales by the cup been such a success in China where the more than one billion people drink and export tea? Starbucks success in China is a testimony to understanding the importance of globalized intercultural communication, marketing, and branding strategies. Starbucks’ corporate managers recognizes how to assimilate into the Chinese culture, and convince the Chinese people that they too want to be a part of the Starbucks culture just like a Westerner.
According to Varner and Beamer,” It may be in the national interest to promote trade to improve employment and living standards at home” (Varner & Beamer, 2010, p. 381). Starbucks has improved the…...

Similar Documents

Premium Essay

Starbucks

...facing Starbucks as they try to “teach” people to change their consumption habits from tea to coffee. Firstly, tea is one of the common beverages in China. According to the history, China peoples start to drink tea before four thousand years ago. In China, tea has become a unique cultural phenomenon. The Chinese view tea to be both medicinal and beneficial whereas coffee does not have the same value to the Chinese. Other than that, having a cup of tea after meal will help to digestion. When feel upset, Chinese also believe a cup of tea will help to quiet down the mind. Moreover, when a Chinese family have guess come to their house, the owner will always treat the guess a cup of tea and can enhance the friendship. But to the coffee, Chinese do not get the benefits of drinking coffee and believe coffee are does not have the same value compare with tea. It will become one of the barriers facing Starbucks as they try to “teach” Chinese to change their view towards the coffee. In addition to this, one has to take into consideration the vast area of china. China consists of 1.3 billion of peoples. Even china is keep improving and economic start to growth up, but china is still having largely rural areas and lots of lower income family. Other than that, they have less familiarity with coffee and don’t have as much money spend on the more expensive beverage. Therefore, it will be other barriers to the Starbucks who want try to “teach” people to change their consumption habits from......

Words: 2428 - Pages: 10

Premium Essay

Coffee Issue

...McDonald's McCafé Takes Aim at Starbucks in Europe Low-cost expansion is helping McDonald's vie with Starbucks as the Continent's No. 1 coffee chain   McDonald's Trafani in a Paris McCafé, where lower prices are helping to nab Starbucks loyalists Ed Alcock PARIS — The Left Bank café is furnished with sleek wood paneling and leather armchairs. Patrons sip espresso from china cups and nibble on croissants and pastries. So what are those golden arches doing on the sign outside the door? The coffee shop on rue Linois is one of 200 "McCafés" McDonald's is opening in Europe this year. By yearend, McDonald's (MCD) hopes to have some 1,100 of the cafés across Europe. The cafés are located inside existing restaurants but with a separate counter, comfy furnishings, and nary a Big Mac in sight. Next year, the company plans 200 more, with an eye toward becoming "the No. 1 coffee seller in Europe," says Jerome Tafani, the company's chief financial officer for the region. That's a grande order. Starbucks (SBUX) is currently Europe's top coffee chain with nearly 1,200 stores. But McDonald's strategy of opening McCafés in existing franchises gives it a leg up over the Seattle-based java king. A stand-alone Starbucks in Europe requires an investment of $350,000-plus, at least triple what a McCafé costs, says Jeffrey Young, managing director of London management consultancy Allegra Strategies. "McDonald's finally woke up and smelled the coffee," says Young. "With the number of......

Words: 2055 - Pages: 9

Premium Essay

Marketing

...I. Title Page (please include all group members’ names) II. Executive Summary (1-2 pages). Highlights of the information to come. III. Introduction (1-2 pages) The current positioning of Starbucks on the market can be characterized with unbeatable brand loyalty and recognition among consumers. For many customers throughout the world, Starbucks is the synonym of coffee.  Its brand is easily recognized in coffeehouse segment of the market. Another competitive advantage is emphasis on high quality, which in turn appeals to consumers who are willing to pay extra for the product of high quality. What makes Starbucks a strong coffeehouse market player is strategic location of its stores. Traditionally located in high-traffic locations with high visibility, Starbucks ensures its stores are visually appealing. Such value-adding offers as free wi-fi and excellent customer service strengthen competitive position of Starbucks as well. Finally, it should also be mentioned that Starbucks carefully listens to the needs and wants of its customers. An example of the care for preferences of consumers is extensive social responsibility initiatives program led by Starbucks and emphasis on being environmentally-friendly. In other words, the company’s management keeps track of current trends on the market and changes in consumer preferences. However, face to China market situation, Starbucks can not afford high rental price for good traffic location. Introduction The......

Words: 4182 - Pages: 17

Premium Essay

Tea Trends

...Two trends about tea consumption and selling Tea is a popular beverage in the world. Tea accounts for 36 percentages of global hot drink markets. In some places like Asia-Pacific, tea even take up 67 percentages of the whole market value. European countries, like England, are also fond of tea. As the middle class in the world is increasing, demand for tea will also increase. Nowadays, there are two important trends about tea that tea merchants and tea companies should take note of. First, Chinese people are more and more likely to drink in western-culture coffee houses. Second, many coffee selling shops tend to add tea into their menu. In China, drinking coffee is becoming more and more popular among people and the coffee houses are now very common to see. Chinese people, especially young one, like to sit at coffee house and drink coffee for a whole afternoon because that will make them feel good about themselves: buying a cup of expensive coffee makes them feel they are wealthy (Anber, 2013). Other than this, drinking coffee in coffee house also represents a modern life style as Henning said coffee house is “a necessary site for men and women sporting a modern lifestyle and a means of personal expression and distinction”. In addition, Anber remarks that Chinese are fond of western culture and value the association that coffee has with western countries. Last but not least, the service in coffee bars is good. The waiters in coffee houses all have been trained before and...

Words: 662 - Pages: 3

Premium Essay

Starbucks Service Delivery

...STARBUCKS: DELIVERING CUSTOMER SERVICE In 1992 Starbucks vision was to become the “Third Place” (home, work and then Starbucks). The value proposition was based on high quality coffee, high service standards and customer intimacy all offered in a relaxed and comfortable atmosphere. The positioning was meant to appeal to a niche market of highly educated affluent customers predominantly female between the ages of 24-44 years. Starbucks did not have a dedicated marketing strategy, but the function was performed by three separate groups with little coordination. In the words of Chistine Day everybody had to perform marketing as part of their job. This meant that they weren’t strategic in their approach and while they were hugely successful over the next decade, by 2002 there were some widening gaps between Starbucks vision and their market survey results. Christine Day realized they had failed in terms of “customer intimacy”; their customer base had changed, yet they hadn’t realized this. Additionally their service level had fallen, with a concurrent increase in the technical and rigorous demands of the barista’s job. The entry strategy into China similarly positioned Starbucks as an elite and ubiquitous brand. In the east and particularly in China, status is an integral part of the culture. Starbucks positioning would therefore appeal to the burgeoning masses of young well educated and affluent class of Chinese society. This market segment had growing purchasing power and an...

Words: 1524 - Pages: 7

Premium Essay

Coffee Bean and Startbuck

...INTI INTERNATIONAL UNIVERSITY COLLEGE ENL 2210 – ENGLISH STUDIES ASSIGNMENT 2 COMPARE AND CONTRAST TWO ORGANISATIONS: THE COFFEE BEAN AND THE TEA LEAF And THE STARBUCKS LECTURER: MS CAROLINE WOOD SUBMISSION DATE: 14 JULY 2011 Name/ Id No. | Draft1 | Draft2 | Content | Language | Organization | Referencing | Total | 1. Ang Teck Chin I 10005521 | | | | | | | | 2. Lee Zong Hang I 09003093 | | | | | | | | 3. Heng See Ying I 11008570 | | | | | | | | 4. Yong Yew Len I 11008547 | | | | | | | | | Page | 1.0 INTRODUCTION1.1 HISTORY OF ESTABLISHMENT1.2 COMPANY’S OBJECTIVES / MISSION STATEMENTS1.3 BOARD OF DIRECTORS | 5678 | 2.0 THE ORGANISATIONS2.1 BRANDS / TYPES OF PRODUCTS2.2 SLOGAN AND LOGO2.3 CURRENT BUSINESS DEVELOPMENT | 91012 | 3.0 MARKETING STRATEGIES3.1 HOW DO THEY MARKET THEIR PRODUCTS?3.2 ADVERTISING METHODS | 131516 | 4.0 FUTURE PLANS | 18 | 5.0 CONCLUSION5.1 SIMILARITIES5.2 DIFFERENCES | 1920 | 6.0 REFERENCESE | 21 | Content Assignment 2 (20%) TASK: Compare and contrast two organizations * Students are to work in pairs. Choose two organizations from the same industry, e.g. Celcom and Maxis, Microsoft and Apple, Toyota dan Honda, Pizza Hut and Shakey’s Pizza, etc. * Students have to write an extended essay based on the following headings / sub-headings according to the format given below: 1.0 Introduction Introduce the industry and give a brief description......

Words: 4704 - Pages: 19

Premium Essay

Starbucks Company Analysis

...Starbuck Industry Analysis Threat of substitute products – medium The premium foods and even fast foods industry, there are substitute products for Starbucks. When the other industries can satisfy the customer need that Tea industry is satisfying then there will have a threat for Starbucks. Other beverage industries such as premium foods industry – Minute maid, Ice Lemon tea, pocari sweat, etc. Threat of the entry of the new competitors – high Fortune ranked Starbucks number one in innovation, quality of management, people management and also quality of products or services in the food industry 2007. Starbucks is still the world and Shanghai leader in its industry. Starbucks is constantly innovating and showing strong product differentiation in their industry. However, some competitors such as Mc Café introduced by Mc Donald’s, Mc Café offers premium coffee with reasonable price. Although Starbucks now is the strongest in its industry however must be aware of the threats to potential entrants since the profit is attractiveness. The intensity of competitive rivalry – medium Starbucks current Shanghai competitors are Coffee Bean & Tea Leaf, Costa Café, local and brand competitor rabbit (rbt). Because of this industry do not have too much rival in Shanghai; Starbucks comes as the winner of all them. With holding 73% of market share and 1000+ number of shop in china, they lead this industry. The level of buyer power – low Starbucks have a fixed price......

Words: 1179 - Pages: 5

Premium Essay

Starbucks Industry Analysis

...Starbuck Industry Analysis Threat of substitute products – medium The premium foods and even fast foods industry, there are substitute products for Starbucks. When the other industries can satisfy the customer need that Tea industry is satisfying then there will have a threat for Starbucks. Other beverage industries such as premium foods industry – Minute maid, Ice Lemon tea, pocari sweat, etc. Threat of the entry of the new competitors – high Fortune ranked Starbucks number one in innovation, quality of management, people management and also quality of products or services in the food industry 2007. Starbucks is still the world and Shanghai leader in its industry. Starbucks is constantly innovating and showing strong product differentiation in their industry. However, some competitors such as Mc Café introduced by Mc Donald’s, Mc Café offers premium coffee with reasonable price. Although Starbucks now is the strongest in its industry however must be aware of the threats to potential entrants since the profit is attractiveness. The intensity of competitive rivalry – medium Starbucks current Shanghai competitors are Coffee Bean & Tea Leaf, Costa Café, local and brand competitor rabbit (rbt). Because of this industry do not have too much rival in Shanghai; Starbucks comes as the winner of all them. With holding 73% of market share and 1000+ number of shop in china, they lead this industry. The level of buyer power – low Starbucks have a fixed price in every shops...

Words: 1187 - Pages: 5

Premium Essay

Assignment 1

...Starbucks is an international specialty coffee chain company. Operating more than 16,000 stores in over 50 countries worldwide to date, it is the largest coffeehouse company in the world (Starbucks Corporation 2010). Set back in year 1971, Starbucks specialized in coffee and other related beverages such as Italian-style espresso beverages, cold blended beverages, and a selection of premium teas, also with certain related businesses like complementary food items, coffee-related accessories and equipment (DataMonitor 2010). Starbucks’ business operation can be breaks down into three segments – the United States, international, and global consumer products group (CPG). The United States and international segments, which is Starbucks’ core businesses, comprise the company-operated retail store and its domestic and overseas licensing businesses; the global consumer product groups segment focus on the sales of packaged coffee and tea through other intermediaries like grocery stores and convenient stores (DataMonitor 2010). Starbucks has continually succeeded and one of the fastest growing company in the USA. Rapid pace of growth company CEO are looking for expand their business internationally. Starbucks was first begun outside of the America in 1995. The firm subsidiary called Starbucks Coffee International Inc. Starbuck build Starbucks’ business outside North America, Including Company owned, license, and joint- venture-based retail stores in globally. Starbucks growth to......

Words: 5925 - Pages: 24

Premium Essay

Starbcuks

...A company must get to know about the targeted market environment before it decided to operate internationally. There are the macro-environment that affects Starbucks marketing decision, economic factors, socio-cultural factors, demographic factors, political factors, natural factors and also technology factors. Economics Factor Being a producer of first-rate and specialty coffees, Starbucks requires a market that able to withstand the demand for the coffee. Starbucks marketing decisions for an economy with high disposable income that leads to high quality of life country like US. It is an example of a developed country that has the high purchasing power and spending patterns which most of the citizen in US are willing to spend more in return for a quality product such as Starbucks coffee. It shown that economic factors affect the business function and largely alarm consumer purchasing power. This requires an important market research about economic and financial stability of a city before they move it in. http://www.ukessays.com/essays/marketing/internal-and-external-factors-affecting-starbucks-marketing-essay.php There are two economics factors that help a company to determine if the country would be a good market, which are the country’s industrial structure and income distribution. Country’s industrial structure is referring to industrial economy, raw material exporting economy or subsistence economy of a country. These show the employment, product and service needs......

Words: 916 - Pages: 4

Premium Essay

Sears

...made me think of Starbucks in China. The consumer of Starbucks in America is almost for everyone, but in China, the target consumer is mostly for the wealthy upper and middle class. College students won’t pay 30 yuan for a cup of coffee because they can buy 6 bottles of CocaCola instead. Starbucks was really smart when they decided their target consumer in China. Since coffee is still not a common drink for Chinese, carrying a cup of expensive Starbucks is seen as a symbol of success or some little personal luxury for the middle class. Starbucks premium pricing strategy fits the market demand very well because the middle class and affluent consumers are growing, which means the market of Starbucks in China will be huge in the future. The change of target consumer made Sears to develop retail stores. While this huge move meant that Sears had to go through a whole series of innovations: merchandising planning, manager development, local management, etc. Sears story told us how important local management is. Local management is not only about managing stores in different ways within different cities in America, but also applies to “going internationally”. Starbucks proved this point very well. Based on the cultural differences and customer eating habits, Starbucks developed flavors to meet the Chinese market, such as green tea-flavored coffee drinks since in China we have a lot of things with green tea flavor and people like to drink green tea too. Starbucks also adapted to......

Words: 704 - Pages: 3

Premium Essay

Union Workers

...fall of the Berlin Wall, those living in countries under the influence of communism only had access to cars that were produced domestically or in other communist markets. This was due to trade barriers with the West. When communism fell, Western economies, that is, countries that were not under communist influence, were able to expand their markets to former communist countries. This in turn increased their profit potential. Related Reading: How to Prepare Your Company for Globalization Cheaper Resources Another consequence of bilateral trade agreements is the access to cheaper resources. Until the start of the 1990's, the People's Republic of China was largely closed off to the rest of the world. Many companies in the United States produced their goods either domestically or in areas with slightly less expensive labor. When China opened its market to the rest of the world, however, American companies were able to take advantage of the far cheaper labor. This is known as outsourcing. Cheaper labor contributes to cheaper costs, which in turn contributes to larger profits. Sometimes, but not always, this may also mean cheaper products and services. International Development International development, as a consequence of globalization, arises out of a combination of both expanded markets as well as cheaper resources. A prime example of this is India. Before the late 90s, the information technology sector in India was largely in its infancy stage. However, coupled with an......

Words: 1834 - Pages: 8

Premium Essay

Starbucks Marketing

...Introduction of the Starbucks     Starbucks Corporation is an American global coffee company. It is the largest coffeehouse chain in the world, with 19,972 stores in 60 countries which headquarters based in Seattle, Washington. Starbucks is named after the first mate in Herman’s Moby Dick. It was founded on March 30th in 1971 by Gerald Baldwin, Gordon Bowker and Zev Siegl. And the Starbucks’ CEO is Howard Schultz nowadays. The company’s logo is also inspired by the sea-featuring a twin-tailed siren from Greek mythology. Until 2012, the company has an annual turnover of $13.29billion.      Initially, Starbuck only sells high-quality bean coffee, drinks, salads, sandwiches and baked food through their company-operated retail stores, with the rapidly development of Starbuck, the company also offered bottled beverages in locality stores and grocery stores. In 1991, Starbucks established a relationship with CARE an international humanitarian organization and establishes a line of premium ice creams and offers a line of premium teas in the market, which was the beginning of the company’s international expansion effort. In 1992, Starbucks successfully listed. And in the later several years, this company has already acquired some small business. Then, Starbucks begin to expand its global marketing.     The Company’s objective is to establish Starbucks as the most recognized and respected brand in the world. In realizing and achieving this goal, the Company plans to continue to......

Words: 4402 - Pages: 18

Premium Essay

Global Business Opportunities Project:

...Global Business Opportunities Project: Starbucks Going to India Prepared by: Group A Contents Module 2: ANALYZING INTERNATIONAL COMPETITORS 6 Module 3: ASSESSING THE ECONOMIC-GEOGRAPHIC ENVIRONMENT 7 Module 4: ASSESSING THE SOCIAL-CULTURAL ENVIRONMENT 10 Module 5: ASSESSING THE POLITICAL LEGAL ENVIRONMENT 13 Module 6: SELECTING A GLOBAL COMPANY STRUCTURE 15 Module 7: FINANCING SOURCES FOR GLOBAL BUSINESS OPERATIONS 16 Module 8: CREATING A GLOBAL MIS (MANAGEMENT INFORMATION SYSTEMS) 18 Module 9- IDENTIFYING HUMAN RESOURCES FOR GLOBAL BUSINESS ACTIVITIES 19 Module 10 – MANAGING INTERNATIONAL FINANCIAL AND BUSINESS RISKS 21 Module 11 - PRODUCT AND TARGET MARKET PLANNING 22 Module 12: DESIGNING A GLOBAL DISTRIBUTION STRATEGY 24 MODULE 13: PLANNING A GLOBAL PROMOTION STRATEGY 25 MODULE 14—SELECTING AN INTERNATIONAL PRICING STRATEGY 27 MODULE 15— DETERMINING ORGANIZATIONAL FINANCIAL RESULTOVERVIEW 28 References: 31 Module 1: IDENTIFYING GLOBAL BUSINESS OPPORTUNITIES Global Business Opportunities We are the Starbucks Corporation; we purchase and roast whole bean coffees. Majority of our stores are in the United States, but we also have international stores. Starbucks Corporation has successfully been in business since 1971. India has the youngest population in the world and will stay young. Starbucks Co. has found the opportunity to expand internationally to India and believes that it can be a huge success. Potential Markets Starbucks would like to first start its......

Words: 8736 - Pages: 35

Premium Essay

Internal Environment of Starbucks

...Culture * Social responsibility * Use of technology | Weaknesses * Expensive products * Overcrowding * Culture clash in different markets | As a company of world’s top five hundred, Starbucks has some strengths. Global Brand Recognition Starbucks has a distinct purpose. It has built as a place between homes and offices for their target customers. There is an atmosphere,where people are able to relax, meet friends and business partners and surf the Internet. Nowadays, the majority of people accept that every time they see a green mermaid they know it is the logo of Starbucks and they would like to buy the products and enjoy the environment in there. High quality products Starbucks pay attention on the high quality of their products. Their coffee is famous for delicious flavor and aroma. Strong culture It is often said that organizational cultures is the key values. Starbucks are doing very well on it. It is widely accepted by their target customers that they identify with the culture. There are two kinds of culture that are notable in Starbucks. Attention to detail Howard Schultz who is the founder and CEO of Starbucks focus on details which some businessman think that are not important. The reason why Starbucks are famous and popular is because Starbucks not only sell good coffee but also let customers to feel warm and comfortable. This feeling is from lots of tiny details accumulation. The workplaces are designed to have the effect of......

Words: 782 - Pages: 4