Starbucks identifies its basic appeal by using a contemporary design. The company identifies its basic appeal as close relationship with its clients and a human touch. The company’s design is in line with its marketing and décor. Clients in this segment are in most cases from urban areas. They in most cases have a high income, well-paying jobs, established businesses, and pay attention to social welfare. The company also aims at the young people who are below twenty-four years. Majority if these young people are in colleges and universities and it appeals to them by establishing outlets in strategic places where students can have leisure or meet for academic and social purposes.
In addition, Starbucks appeals to this group by incorporating new technology whenever there are new advancements. Using the design, the company was also able to identify teenagers as potential market and has since introduced products such as caffeinated and steamed drinks for this market segment.As it expands its markets in China, Starbucks should consider various economic factors. All countries are not suitable for all businesses (Hill, 2019). The company should assess if the market in China can afford its products. If the market cannot afford the products offered by the company, it should refrain from expanding into the country. However, if they can afford and are readily accepted, Starbucks can expand its business in the country. The company should also consider the economic status and stability of China because they are a crucial indicator of the risk involved in expansion.
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Cultures differ from one country to another and from one location to another. The differences in culture are significant and Starbucks should put into consideration the effects of the differences on the business. The cultural differences can prevent or promote efforts to market the company Chinese markets. It is also important for Starbucks to assess the political environment of china before expanding. It is crucial that the company becomes aware of the government’s and citizen’s attitudes towards the company before committing more resources into expansion. Political stability of the country is also another important political factor to consider. This would be important in assessing the risk involved in expanding the business and make appropriate decisions according to the political conditions. Political stability would indicate continuance of the existing policies (Hills, 2019). As a result, the company can open more outlets. However, political instability would mean changes in policies and this may affect the company’s ability to make profit in the country.
Starbucks measure and select the market site by assessing the opportunities and risks involved in entering the new market. Starbucks chose China because the country is experiencing an increase in the middle class. The number is expected to increase to approximately 600 million people by 2022. The increasing middle class forms the target market for Starbucks and a fertile market for its products. Although China is a tea country, the increasing middle class has an increasing need to spend discretionary and experience the western culture. Therefore, Starbucks identified an opportunity for business in the country.
In market selection, growth potential of the market sites is one of the most important steps to undertake. Identifying the ability of the firm’s revenue to increase after investing in the site is crucial when selecting markets. The company should also look for the most appropriate targeting strategy and create market segment profile for the new markets segment (Hill, 2019). An evaluation of all the relevant market shares is also crucial I selecting the market. Besides, identifying the market variables that will be used in the selection process is also an important step in market selection process (Hills, 2019. Starbucks conducts both primary and secondary research in its evaluation. For primary research Starbucks administers questionnaires and interviews to collect data for their evaluation. For secondary research in its evaluation, the company uses information and data collected by others people/organizations such as researchers. Besides Starbucks, there are other companies that have potential for international growth. I believe that Coca-Cola and Walmart have the same opportunities with Starbucks for expansion in the global market. The companies have strong brands and there exists opportunities for their products in the global market.
Reference
Hill, C. W. L. (2019). International business: competing in the global marketplace . New York, NY: McGraw-Hill Education.
