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Starbucks in Chinese Market - Case Study Example

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The following paper entitled 'Starbucks in Chinese Market' presents Starbucks' most critical and initial barrier which was that the people of the country were used to tea as a beverage into which the coffee giant Starbucks was planning to make an entry…
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Starbucks in Chinese Market
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Download file to see previous pages In the year 1996, the coffee giant marked its global presence. Up until 2004, the Chinese government prohibited Starbucks to operate its own stores in China. As a result, the coffee giant enters the Chinese market by joint-venturing with Chinese food and beverage companies and licensing other companies to own and operate its stores--differs from its domestic approach. But the company was able to easily overcome its initial obstacles and marked its presence in China very quickly and successfully with great brand recognition and customer satisfaction. The company also tailors its stores to match the local atmosphere. This is a transnational strategy. “For example, the Starbucks strategy in Shanghai is to attract middle to high-class customers by positioning stores in the higher end areas and the higher-traffic areas (Soul Cast - Blog).”

2. China’s largest urban population is the most important strength of the company. The economy of China is also increasing at a positive pace. China is believed to be the most significant potential market outside the United States as far as the company is concerned.

There were a lot of restrictions initially for foreign players to enter the Chinese market. But as part of the Chinese government’s plan to become a member of the World Trade Organization in the year 2004, most of the restrictions of trade and entry barriers were removed and this was a good opportunity for the company to expand its operations and mark its presence in the country. China’s expanding economy is steadily though slowly is being opened up for foreign competition. The population of the country is another major business target.

“Chinas total insurance assets reached US$143.3 billion. In terms of percentage of GDP, this is still only about 2%, even small compared to Japan's 11% and 8% in the US. But as incomes increase further, Chinas insurance market will become more and more significant to the economy as a whole. These assets are held by some 70 insurance players, both Chinese and foreign. ...Download file to see next pagesRead More
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