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Chinese Marketplace The successes of McDonald's and KFC in China prove, once and for all, that the Western style of life appeals to the ordinary Chinese people more and more. Therefore, it would be only logical to expect a commercial success, on the part of Starbucks, once it decides to expand into China. But let us analyse this issue more closely. Up until nineties, the biggest threat to the Western business in China, was being considered the fact that this country's form of government, still remains a Communist dictatorship. Back than, many experts doubted whether the business expansion into Communist China would ever justify itself, from the economical point of view. It is not a secret that the private ownership is banned in this country, thus leaving a very little chance for any considerable profit to be made, on the part of Western investors.
But as time passed by, it began to dawn on them that the Communist ideology, in China, cannot be thought of as the threat. As the matter of fact, it helps to maintain the order and social stability, in this country. At the same time, the Chinese government welcomes foreign businesses, by providing a complete financial security for the investments. There is no doubt that if Starbucks expands its operations in China, it will enjoy an extraordinary commercial success, because of current socio-political realities in China. First of all, the number of middle class citizens, in this country, grows faster than anywhere else in the world. It is not a secret that 80 % of all electronics in the world, is being assembled in China.
Therefore, the demand for the skilled and competent workforce in China is higher than ever. This, in its turn, causes the average worker's salary to increase by 12 % a year. It is now equals to about 400 $ a moth, which is a lot, by Chinese standards. We know that the Starbucks is strongly associated with the Western culture, especially with what we refer to as yuppies.
This term stands for the young professionals, fully dedicated to their work. In my opinion, the Chinese work ethic, provides the ground for the young generation of Chinese to be willing to associate themselves with yuppies. In the West, this word if often used in the negative context. This is because individual's complete dedication to work, in Western countries, is commonly regarded as workaholic. In China the situation is absolutely different. The biggest virtue for the average Chinese is to be as hard working, as possible.
Also, Chinese pay big attention to the symbols of social status. And the more these symbols are associated with the Western style of living, the more they are valued. It is not too hard to imagine well-paid Chinese professional, who is willing to visit the place, where he can hang out with his colleagues. The joy of belonging to the higher social class is more intense, while it is taking place among the group of people. Chinese psychology is different from ours. Traditionally, Chinese people used to think of Europeans and Americans as superior.
It is well known that the facial plastic operations, which mean to make an individual look more European, are very popular in China and Japan. Basically, we can say that people in China want to be associated with the Western lifestyle, and what is the most important they are willing to pay for it, now that they have the means. This is the most profound reason why Starbucks should succeed in China. Those who say that the Chinese people are not quite as addicted to coffee, as we are, do not understand the issue very well. It is not about taste preferences, it is about belonging. The economical power of Chinese consumers cannot be underestimated.
There are 3 milliards people in that country, which make China highly valuable, from the investor's point of view. In order for the Starbucks to insure its potential success in China, it would have to adjust its menu a bit, to the taste of Chinese people. It would have to offer more varieties of strong coffee, such as Espresso. Also, it would have to make the tea available, as the item on its menu list, because China is known for its strong tea drinking tradition. But, at the same time, these innovations can have a purely cosmetic nature. It is highly doubtful that menu adjustment would play a very important role in promoting Starbucks in China.
Its logo will do it better than anything else. Abstract: This paper focuses on psychological aspects of Starbucks' expansion into China. Its main idea is that the Western style of living appeals to Chinese people that posses a considerable buying power. Therefore, the Starbucks is likely to enjoy a commercial success in China. Bibliography: Chong, W. And Xiaoyi, S.
KFC Pulls Food After Contamination Scare. (March 3, 2005). China Daily. Retrieved August 31, 2006 from web Yin, J. American Popeyes Runs after McDonald's and KFC in China. (February 19, 2001). People's Daily Online. Retrieved August 31, 2006 from web Li, Y.
Average Salary of Urban Workers Increased by 15. 2 % in 2001 (June 11, 2002). People's Daily. Retrieved November 25 from web
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Research essay sample on Point Of View Commercial Success
