International and Global Marketing (IGM) - Starbucks

International and Global Marketing (IGM)
Name of the student
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Executive summary
This report focuses on the identifying and evaluating the factors which makes China a market
for Starbucks to operate. Various aspects of coffee industry in China have been evaluated in
this report. For the evaluation of business environment of coffee industry, PESTLE analysis
has been applied. All the factors associated with business environment of coffee industry has
been analysed in a detailed manner. The Application of Porter’s diamond model in China
market has also been used in this report. This has assisted in evaluating the competitiveness
level in coffee industry in China. Some of the opportunities and risks which might be faced
by Starbucks in coffee industry in China have been evaluated in this report. Based on these
aspects, proper recommendation has been made for Starbucks in this report.

Table of Contents
Introduction................................................................................................................................4
PESTLE analysis........................................................................................................................4
Market/country attractiveness using Porter’s diamond model...................................................6
Conclusions – recommendations................................................................................................8
Reference list............................................................................................................................10

Introduction
International expansion is important for the growth and development of Starbucks. By
focusing on entering into new regions of the world, the company will be able to expand its
business. This will lead to the increase in its profitability. China has many opportunities for
the expansion of Starbucks. In 2018, the Chinese coffee industry's market size climbed to
almost 57 billion yuan. In the current situation, coffee is regarded as one of China's most
traded agricultural products. Starbucks strives to be a responsible company in the
communities in which it operates around the world. The company focuses on sourcing high
quality coffee, reducing its impact on the environment and making a positive contribution to
the community. The company's mission is to stimulate and nurture the human spirit.
This project is about finding and assessing the elements that make China a viable market for
Starbucks. In this project, various facets of the Chinese coffee business were assessed.
PESTLE analysis was used to assess the business environment of the coffee sector. This task
also included the application of Porter's diamond model to the Chinese market.
PESTLE analysis
Political factors
The coffee industry relies heavily on international trade. Coffee is predominantly consumed
in Europe and North America, despite the fact that Asia, South America, and Africa produce
the bulk of the world's coffee. The final price of a beverage that can be sold is influenced by
the trading relationship between coffee producing and consuming countries. There are
currently a number of international trade agreements in place to support the success of the
coffee industry (Fang et al., 2018). The coffee sector is unlikely to be affected by the United
States and China's tense trade relations.
Economic factors
There are common benefits as China's economy continues to grow and consumer incomes
rise. As a result, Chinese consumers have more money to spend each year. This might have a
major impact on the consumer products and food and beverage industries (Ferreira and
Ferreira, 2018). Tea, coffee, and other high-end beverages are becoming more popular in
China as people become wealthier. Furthermore, as customers' wealth grows, they are more