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Starbucks Challenges in China
Transcript of Starbucks Challenges in China
2) High prices To buy a tall Starbucks caramel macchiato (12-ounce)
People in West & Central China needs to work for
1.6 ~ 1.9 hours Shanghai Starbucks
(38 stores) Seayahi Coffee Three Challenges:
1. Growing Competition
2. Difficult market penetration into remote cities of China
3. Rising Cost Business strategies would be in combat of such challenges Starbucks' costs of expansion & operations are increasing in the China market - rental & wage cost Rising Rental Cost Starbucks operates its shops in financial areas
in order to attract middle-class workers Shanghai average rent: RMB$57.83/sq. m/day
200 sq. m store: RMB$346,980/month -> Leading to relocation of Starbucks store in Beijing and Guangzhou (2007 - 2012) Rising labour cost Increasing wage level in China Dio
Coffee Better Price
Similar quality Slightly expensive