BPD2100 International Business Challenge - Market Analysis for Starbucks China - Assignment Help

As per Lee, Choi, et-al (2018) Starbucks has been innovating with its products and especially when it comes to its trademark cups available both in disposable and reusable cups. With the evolving technology, research and development brands are focusing towards a much greener alternative with biodegradable and compostable packaging for their products. Starbucks is set to introduce their new recyclable cups in some parts of the world, keeping in consideration China and its global recycling waste problem there are better alternatives that can be considered. One of them being, engaging their customers in the recycling initiative. 

Prior to concluding the results of the feasibility analysis, following is the External and internal analysis of the industry and the company Starbucks in the Chinese market:

Nature of the industry and Competition

Gupta, Nagpal and Malik (2018) mentioned that the coffee shop and manufacturing industry has its fair share of competition for both new entrants and established local and global brands. Mattingly, (2016) had added that big giants such as Costa Cofee, McCafe, Nespresso and similar others have been aiding in increasing consumption of coffee from the Chinese market. China is supposedly the 17th largest globally, when it comes to the Coffee market. With multiple acquisitions and mergers, competitors are able to survive and cater to a higher demand.

Market segmentation

In order to make its place in the market, Starbucks has always initiated relevant strategies suited to its Chinese customers and incorporated them in their products. The usual Mocha Frappe and Cheese croissant may not be popular in China but their Green tea flavored drinks and curry puffs are, giving serious local competition by catering local needs (Wei, 2016). 

Following is a brief on its Starbucks target market in China: 

Currently, their market consists of consumers from Baby Boomers, Gen y, Millennials and soon to be Gen Z that are about to enter the workforce. Comparatively Starbuck’s market consists of a richer consumer base because of the brand’s costing strategies do not align with the potential customers belonging to a lower income group. The psychographics for the Chinese market for Starbucks would include people who are considered to be innovators, thinkers, achievers and experiencers as per the VALS framework. This is due to the sophistication the brand portrays along with its creative innovations (Wong and Tzeng, 2019).  

SWOT