3. І Headquarters
Seattle, Washington, USA
І Key person
1,462
Howard Schultz
14,822
226
3,317
І Market share
249
1% in the world
І Industry/ Genre
Restaurants/ Coffee house
227
58
І U.S.A
Starbucks’ unique selling point is the “rich experience"
that goes beyond a cup of good coffee.
Founded in 1988
•
20,361sotres in 61 countries (2012/11)
•
Market share: 29%(2011)
•
13,123 stores in U.S.A
4. І Korea
І China
•
•
•
•
•
•
Entered in 1999
Market share: 66%(2010)
738 stores in mainland China
Entered in 1999
Market share: 40%(2010)
585 stores in Korea
І Japan
•
•
•
Entered in 1996
Market share: 33.4%(2010)
839 stores in Japan
5. І Analysis of Chinese coffee market
•
Currently coffee consumption is about $10
І Coffee consumption
•
Reach 120,000 tons in 2012 (130,000 tons in
KOR)
billion in China ($1.7 trillion globally)
•
China coffee market is increasing about
•
An estimated market of 200-250 million coffee
drinkers (Starbucks survey)
15~20% every year (2% globally)
•
Coffee franchise growth rate per year: 25%
•
Imported coffee: 90%
І Coffee consumption/ year differs from regions
•
400 tons in Shanghai
•
300 tons in Beijing
•
200 tons in Guangzhou
6. І Instant coffee as dominant product
• Type of product: 3-in-1 mixes (coffee, milk powder and sugar)
80% of China coffee market share
7. POLICY
І
Joined WTO
Help Starbucks reduce cost
Such an inflow of foreign culture affected Chinese culture
І
І Structural opened little by little, in 2005, abrogate law which is foreign investment restrictions to retail stores
From 1992, feature of China market
Starbucks acquired their own license
In 2007 and 2008, expanded more than 11% (economic development), 25% (growth rate), and 16%
(consumption growth)
І
Increase in CPI (the consumer price index)
Increase in raw material price (eg. Coffee bean, transportation fee, and so on)
І
Increase in Chinese GDP
SOCIETY
І
Urbanization plan: expand up to 52% till 2015 (urban:non-urban= 49: 51, 2010)
І
Produce coffee bean in Yunnan
І
Emergence of a middle class (increased purchasing power)
І
Sustainable Green Growth advantage; Starbucks image
ECONOMIC
І
8. І
Chinese mostly drank; tea, beer, Baijiu, tepid boiled water
І
І
After China opened up; wine, juice, creamed marzipan beverage, health elixirs,
Structural feature of China market
and carbonated drinks emerged
І
Recently drinking coffee has become popular
І
Around 15,000 tons of Arabica beans are harvested in Yunnan every year
І
At coffee stands in Shanghai foreigners tend to get their coffee to take away ↔
Chinese like to sit down and socialize or carry out business with the coffee they order
І
Coffee culture is more popular than coffee itself with sales
9. І
Headquarters: Shanghai, China
І
Key person: Wang Jing Ying (current CEO in China)
І
Net revenues for the China/Asia Pacific segment were $198
million in Q4 FY12, an increase of 23% over 4Q FY11
More than
600 stores
1999
Opened 1st
store in
Beijing
2000
Opened 1st
store in
Shanghai
2003
2005
2008
Acquired a 50%
ownership
interest in SH
Opened 1st store
in South-China
Established the
greater China
Regional support
center in SH
Expanded
to 26 cities,
mainland
2010
Current
2012
Launched 2008
Starbucks tea in 738 stores
in mainland
mainland
More than 400
stores
10. Starbucks store entry
Market
Southern China
Other Secondary
Cities
Mode
1999
Beijing, Tianjin, etc.
License
(Changed to wholly
owned in 2006)
2000
Hong Kong, Shanghai, Nanjing,
Hangzhou, Suzhou, Wuxi, etc.
Joint Venture
(Increased shares to 50%
in 2003)
2002
Guangzhou, Shenzhen,
Dongguan, etc
Chengdu
2005
Shanghai
Region
2005
Beijing
Time
Qingdao
2005
Dalian
2006
Xi’an, Chongqing
License
(Increased shares to 51%)
Wholly
Owned
11. Location of Starbucks China
І
66% market share in Chinese coffee shop
market (Costa: 8.9%, Mac Cafe: 8%)*
І
162 stores in Shanghai
125 in Beijing
44 in Guangzhou
І
Operating margin: 34.6% (21.8% in the US)
І
$358 million sales in 2010 (= 3.3% of total
revenue)
І
History of imitators
eg. Shanghai Shabake Coffee Company
*Source: Euromonitor International 2010
12. І Reason for coffee consumption
• Coffee is a fashion beverage that comes from western countries
• Drinking coffee is a social event rather than a daily necessity
• Chinese like sweet coffees (mocha or café latte rather than espresso)
І Chinese people visit cafes for
• Music and ambiance
• Branded wares (coffee mugs)
• Variety of fresh pastries
• Coffee experience
13. І Chinese coffee brand preference
•
Nestle (74.4%), Starbucks (6.7%), U.B.C coffee (5.1%)
І Chinese coffee flavor preference
•
Add milk (44.3%), Add sugar (41.5%), Add cream (28.8%)
Add milk+ sugar+ cream (6%), Fresh coffee (18%)
І Chinese factor of purchase decision
•
Flavor (35%), Price (19%), Brand (18%)
І Why do Chinese not drink coffee?
•
Harmful to health (20.2%), Sleeping problem (17.4%), Strange flavor (17.4%),
Expensive price (10.9%)
15. •
•
•
•
•
•
Headquarters in Taiwan
1,271 stores in mainland
Main cities:
Shanghai, Beijing, Zhejiang
Headquarters in U.S.A
118 stores in mainland
Main cities:
Beijing, Tianjin, Shenzhen
U.B.C
Pacific
Headquarters in HK
250 stores in mainland
Main cities: Beijing, Shanghai,
Guangzhou
Mac
Cafe
85℃
•
•
•
•
•
•
Headquarters in UK
150 stores in mainland
Main cities: Shanghai,
Guangzhou, Shenzhen
Costa
•
•
•
Headquarters in Taiwan
657 stores in mainland
Main cities: Shanghai, Beijing,
Jiangsu
16. • Headquarters in Taiwan
• Founded in 1968 in Taibei
• 1,271 stores in mainland
• Main cities:
Shanghai, Beijing, Zhejiang
17. І
Nestlé sells 2 out of 3 cups of soluble coffee on the
mainland
І
1st multinational to establish a coffee plant in China
І
Favorite instant coffee brand: Nescafé has 75 %
market share on the Chinese instant coffee market
І
Nestlé operates 21 factories in China
І
3 Nespresso shops (Shanghai, HK, Beijing)
18. І Vision
Establish Starbucks as the premier provider of the finest coffee in the world while maintaining our
uncompromising principles while we grow
І Mission Statement
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Here are the principles of how we live that every day:
• Our coffee
• Our partners
• Our stores
• Our neighborhood
• Our shareholders
І Strategy
To achieve the goal, the Company plans to continue to rapidly expand its
retail operations, grow its specialty sales and other operations, and
selectively pursue opportunities to leverage the Starbucks brand through
the introduction of new products and the development of new distribution
channels.
19.
20.
21. І
By geographic
• By population, choose level of cities in China
• 1-tier and 2-tier cities on the coast
І
By demographic
• By geographic, separate to groups
• By household income, separate to groups
• By groups, analyze their educations,
occupations and ages
І
By psychographics
• By demographics, analyze their orientation and life styles
22.
23.
24. Renying Hwang, a 30-year-old who works in foreign trade. Her annual
income is ¥45,000 ($7,363). She lives in Shanghai. When she has a
meeting with buyers or friends, she always chooses her place of
appointment as a coffee shop. Sometimes, she likes to drink coffee while
reading books and listening to music. She always visits well-known
branded coffee chains.
Shengjuan Ye, a 25-year-old who works in a Korean
teaching Academy. Her annual income is ¥25,000 ($4,090).
She lives in Hangzhou. Jiayan Wang, a 24-year-old who
works in an electronic factory as a technician. Her annual
income is ¥22,000 ($3,600). She also lives in Hangzhou.
They lived in Korea before. During that time they often went
to a coffee chain to drink coffee while they did homework and
chatted. They like the flavor of coffee.
26. • 我们卖的不是咖啡,我们卖的是体验
We are not selling coffee, we are delivering an experience
• Between home and work: Relaxing, Comfortable and Convenient
• Relaxing: diverse music, coffee variety and aroma
• Comfortable: sofas, well designed interiors
• Convenient: free wifi, ideal locations, quick service
27. І
Narrow range of products
І
І
Limited localized choices
Product line extension and set menus
•
Localized teas and food: moon cakes
3 Chinese teas
І
Free wifi without ID/Password
І
No local Chinese food
І
Increased number of electrical outlets
І
Limited personal interaction with the staff
І
Coffee knowledge/education kiosk
І
Season Coffee: Toffee nut latte
І
Customized music offerings (Playlist)
28. І
Premium pricing strategy
І
І
Few discounts
Lower prices in 2nd-tier cities based on
CPI
І
Discount on new products to increase
acceptance rate
І
Same premium pricing strategy in the
primary cities
І
Lower prices when using Yunnan Arabica
coffee bean
29. І
Starbucks employs 1-level consumer
І
•
marketing channel in China
•
Exclusive distribution at company owned
Coffee beans, Via instant
Arabica coffee beans sourced globally
•
86% of coffee purchased in 2011 ethically
sourced
•
Joint Venture with Ai Ni Group in Feb 2012
− Yunnan province Arabica beans to be
used domestically and exported
І
Highlight use of Yunnan Arabica beans
І
retail outlets
І
Expand into wholesale markets
Transition from renting to owning property
І
Heated seating and more comfortable
chairs
30. І
Seasonal promotions
І
І
Personalized marketing
І
Product promotions
Maintain image of coffee culture
•
Interactive marketing events (tasting,
sampling)
І
Starbucks community programs
І
Seasonal promotions
•
Chinese New Year
•
Mid-autumn festival
•
National day
І
Drawings
І
Loyalty promotion: pins
31. І
І
More extensive training
competitors
І
A low turnover rate compared to
І
A more personalized approach to the
Progressive compensation package
І
Additional life insurance
І
Medical insurance
І
Stock options
І
Management bonus plan
І
Discounted Starbucks merchandise
customer
І
Training program in the US for the best
employees
32.
33. І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
І
Starbucks China: www.starbucks.com.cn
Starbucks Entry into China, Cornell university
Starbucks Corporation Fiscal 2011 Annual Report
Starbucks Reports Record Fourth Quarter and Fiscal 2012 Results
Starbucks in China, ESADE
Baidu Map: search as coffee shop, Starbucks China, U.B.C Coffee, Pacific Coffee, 85℃, Costa Coffee,
MacCafe
Starbucks coffee 75% costlier in China, China Beverage News
China's Rising Imports of American Goods, US Global Investors, By Frank Holmes, November 11, 2011
China's new brew, By Daniel Allen : http://www.atimes.com/atimes/China_Business/MC11Cb02.html
http://en.wikipedia.org/wiki/Starbucks
http://www.loxcel.com/sbux
http://www.quora.com/Business/What-is-starbucks-market-share-globally-and-in-the-US
http://www.askform.cn
http://factsanddetails.com/china.php?itemid=1875&catid=11&subcatid=73#13
Starbucks to take on Nestle in instant coffee market (Liu Ying-feng and Staff Reporter)
Starbucks Heads for Smaller China Cities as Coffee Shops Triple By Bloomberg News - Apr 1, 2012
http://news.starbucks.com/about+starbucks/starbucks+coffee+international/greater+china/
http://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/
http://legacy.intracen.org/publications/Free-publications/China-Coffee-Overview-Tech-Paper-Aug-2010.pdf
http://www.bosidata.com/yinliaoshichang1203/G716510RG6.html
34. І
І
І
І
І
І
І
І
І
І
І
І
І
І
2009中国咖啡连锁企业20强,CPR Research
星巴克中国的营销战略研究,上海交通大学
星巴克的中国市场营销策略
2009年中国咖啡市场价格走势及影响因素深度调研报考
拓展中国市场 星巴克3年将增800家店
论中小企业的经营特点与战略选择—浅谈连锁经营在我国的发展及对
星巴克、麦咖啡齐齐涨价 Costa、太平洋咖啡按兵不动
중국마케팅, 김용준, 박영사
중국, '뜨겁고 진하게' 커피전문점 진출 경쟁, KOTRA
日経市場占有率 2011年版
Responsibly Grown Coffee <http://www.starbucks.com/responsibility/sourcing/coffee>
Starbucks to Partner with Ai Ni Group to Brings China’s Yunnan Coffee to the World <http://news.starbucks.co
m/article_display.cfm?article_id=617>
McKinsey Consumer & Shopper Insights: Meet the 2020 Chinese Consumer. <http://www.mckinseychina.com/
wp-content/uploads/2012/03/mckinsey-meet-the-2020-consumer.pdf>
Regional market segments of China: opportunities and barriers in a big emerging market. < http://www.ln.edu.
hk/mkt/staff/gcui/Cui%26LiuJCM.pdf>
35. • Team Name: Starbucks China
• Team Leader: Hyomin Seo
No.
1
2
3
4
5
Name
Role in the Project
Hyomin Seo
Starbucks overview, China market, Change,
Company, Target Matrix, TCP, Positioning map, USP,
Product, Price, Promotion
Jin Ming
Consumer, Competitor, TOWS analysis of Starbucks,
TOWS analysis of UBC coffee, Segmentation,
Target Matrix, USP, Product, Price, Promotion
Chris Lopez
Company, TOWS analysis of Starbucks,
Segmentation, USP, Place, Promotion, People
Serge Gawrieh
Competitor, TOWS analysis of Starbucks, TOWS
analysis of Nestle, Segmentation, USP, Place
Clotilde Cavaroc
China market, Company, Consumer, TOWS analysis
of Starbucks, Segmentation, USP, Place, Promotion,
People
Expansion of coffee shops in mainland China for the last decade (fresh roasted coffee)Foresee 120,000 tons in 20120645000075310008631890973299 1087959 11104671Volume052936063250073688084230094614105220
Up until 20 years ago, Chinese mostly drank four things: tea, beer, Baijiu, tepid boiled water upAs China has opened up a number of other drinks have become available: wine, juice, creamed marzipan beverage, health elixirs, and carbonated drink as wellCoffee was once condemned as “the tail of capitalism”Recently, drinking coffee has become popularIn 1996, a coffee boom was predicted and government coffee traders bought up 12,000 tons of coffee beansThe Chinese middle class taste for coffee has global repercussion as rising demand for coffee n China has created a rise in coffee production worldwideAround 15,000 tons of Arabica beans are harvested in Yunnan every yearAt coffee stands in Shanghai foreigners tend to get their coffee to take away while Chinese like to sit down and socialize or carry out business with the coffee they orderCoffee culture is more popular than coffee itself with salesUp until 20 year ago Chinese drank mostly four things: tea, beer, Baijiu (essentially grain alcohol), and, when they were sick, tepid boiled water. As China has opened up a number of other drinks have become available. They include things like snake bile wine, fresh-squeezed cucumber juice, creamed marzipan beverage and health elixirs made from vinegar and Sprite as well as a wide variety of conventional soft drinks and alcoholic drinks like those found everywhere.Coffee was once condemned as "the tail of capitalism." In recent years it has become a popular drink. Coffee houses have sprung up in Shanghai, Chengdu, Guangzhou and other cities. There was a Starbucks in the Forbidden City before nationalist fervor forced it to be closed down. Airlines in China report that on many flights coffee is as popular as tea.In 1996, a coffee boom was predicted and government coffee traders bought up 12,000 tons of coffee beans, five times the previous year's total imports. The coffee market crashed and the government was left with warehouses full of coffee beansThe Chinese middle class taste for coffee has global repercussions as rising demand for coffee in China has created a rise in coffee production world wide. Coffee production in China is also growing. On Hainan Island and in Yunnan and other southern provinces farmers are growing beans that are catching the eyes of serious coffee drinkers. Some Arabicas produced in Yunnan are said to be particularly good. Around 15,000 tons of arabica beans are harvested in Yunnan every year.At coffee stands in Shanghai foreigners tend to get their coffee to take away while Chinese like to sit down and socialize or carry out business with the coffee they order. In some ways coffee culture is more popular than coffee itself with sales at the coffere stands of non-coffee beverages such as fruit juice often higher than coffee drinks
Starbucks executives has said that China is the company’s biggest opportunity and could someday be its largest market. As of late 2010, Starbucks had 400 outlets in China and had plans to open 1,000 more in coming years. The Seattle-based company opened its first branch in September 1998 and had 250 outlets in 21 cities in 2007. In September 2011, Starbucks said it planned to triple the number of coffee shops in China of from 470 to 1,500 by 2015.A number of imitators with similar green logos have also appeared. In January 2006, a Chinese court sided with Starbucks in a battle with a Shanghai company that used the same Chinese name (Xingbake) and ordered it to pay Starbucks $62,000 in damages. Coke won a similar suit against a company that gave one its drink a similar name to Coke’s Qoo fruit drink. A Starbucks opened in the Forbidden City in 2000 in a building where court officials used to wait for a morning audience with the Emperor. Starbucks had been invited to open up there by palace managers who wanted to raise money for the upkeep of the 72-hectare site. In 2007, the Starbucks in the Forbidden City was closed down—in part because of an Internet protest that claimed the presence of the coffee chain “undermined the solemnity of the Imperil Palace” and was “a symbol of low-end U.S. food culture” and “an insult to Chinese civilization.”In November 2010, Starbucks said it was going to start growing coffee beans on its own coffee farms in southwestern China. The company said it would hire coffee growers in Yunnan Province to plant Arabica plants that would be ready to harvest by 2014.