Research Description:

Coffee Goes to China: An Examination of Starbucks’ Market Entry Strategy

“Nothing is overseas anymore,” management writer Kenichi Omae words states perfectly as the world moves further towards globalization. One way to be a leading company within an industry is to expand outside of the nation in which it is based. Starbucks Coffee Company learned this early on, and targeted Asia first.

There are three phases involved when a foreign company begins to execute its long- or short-term presence in international territories. The first phase begins with Entry, during which multinational corporations determine the right business model to use and establish a presence in the foreign country. The second phase is Country Development, and companies develop their market by expanding to several localities, building brand awareness with customers based on knowledge and research conducted during the Entry period. The final phase, Global Integration, seeks to align the foreign companies with the management and goals of the parent company.

Implementing these three phases, Starbucks successfully introduced coffee into predominantly tea-drinking China. This success is demonstrated by findings from the interviews conducted by the researcher in modern-day Shanghai. It is further demonstrated by Starbucks’ deepening financial commitment to the Chinese market. With its plans to open one new store in this region every month, it moves closer to one day establishing a Starbucks on every corner.