Strategic Analysis: Coca-Cola's Green Tea Launch in China Market

This report explores Coca-Cola's decision to introduce its new green tea product in the Chinese market rather than the UK, focusing on the attractive green tea culture prevalent in China. The report details how tea is deeply ingrained in Chinese culture and daily life, making it a promising market for a green tea product. It contrasts this with the UK market, where black tea is more popular and health consciousness is lower. The analysis includes statistical data on tea consumption, health trends, and cultural preferences in both countries. It highlights Coca-Cola's strategy to manufacture and market the green tea locally in China, adapting to cultural nuances. The report concludes that China's strong tea culture, growing health awareness, and local production advantages make it a more strategic choice for Coca-Cola's green tea expansion compared to the UK.

Running Head: GLOBAL BUSINESS 0
Coca-Cola
Global Business
(student name)
10-3-2018

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Contents
Introduction......................................................................................................................................2
Background......................................................................................................................................3
China green tea culture................................................................................................................3
Green Tea culture of U.K............................................................................................................4
Cultural difference in china and United Kingdom......................................................................6
References........................................................................................................................................7

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Introduction
Coca-Cola is a well popular brand of beverages, and wants to introduce a new healthy
product that is green tea in Chinese market. The major reason for entering this market is the
attractive green tea culture of china. Chinese culture and society consist of tea lovers, where
teahouses can mostly found in business districts and Chinese neighbors. Tea is one of the
important part of Chinese culture and is included in seven necessities of daily life in china. To
enter this market, the company would grow and package green tea in china by the local people
there, and market with the name of Coca-Cola (Cai, 2018).
(Source: (financialexpress, 2018)

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Background
China green tea culture
The company chooses Chinese market over U.K because:
 Tea culture introduced thousands of year back, initially the tea was grown, which was
later spread to rest of the countries. China found and start using tea 3000 years ago
(Chaffee, 2017)
 Even after other beverage options available in the market, tea has never lost its
attractiveness, instead green tea attractiveness is rising with time due to health concerning
population.
 People are more concern about their health in China, due to which green tea will be a
successful launch in the market
 Since green tea is grown largely in the country itself, for entering the market Coca-Cola
do not have to export green tea to the country, instead the green tea can be manufactured
in the country by local people, which means the cultural difference will be considered
and adapted easily.
 According to global comparison revenue in million US$, In China most revenue of tea is
generated in 2018, with market volume of US$19,105m (statista, 2018).

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(Source: (statista, 2018)
 According to latest report presented by “the United Nations Food and Agriculture
Organization Intergovernmental Group,” global tea production, which includes green tea
production and usage are expected to constantly rise over upcoming decades, driven by
extreme demand in emerging and developing country, mainly China and India
(financialexpress, 2018).
Green Tea culture of U.K
 The tea was not introduced in Britain until mid-17th century. Marketing green tea in U.K
could be more challenging due to cultural difference (Greig, 2015).
 As per the statistics, Majority of people in U.K are black tea drinkers instead of green tea
(Statista, 2018). That is why introducing green tea in U.K could be a fail.

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Sales value of tea in the United Kingdom (UK) in 2015, by category (in million GBP)
(Source: (Statista, 2018)
 The country is not inclined towards health beneficial products; this can be said due to
high obesity rate of the country. One in five children in was obese or overweight. In
addition, £42.43 is an average spends per person, per week on food and drink (finder,
2018). That is why not entering into U.K market for green tea is right decision for Coca-
Cola.
 When health statistics is considered, the people of European countries are more inclined
towards other drinks and alcohol consumption is very much in U.K. 57%: of the UK
population drink alcohol; this states that healthy drink like green tea would not be
preferred (finder, 2018).

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(Source: (finder, 2018)
 61% of British people like or prefer to take coffee instead of green tea according to a
survey conducted by Syrup makers ‘Monin’ (Scott, 2017). Therefore, introducing green
tea in U.K market would not be a better decision.
Cultural difference in china and United Kingdom
 China culture includes a better and healthy lifestyle, due which consumption of green tea
is much more; it is a developing country with combination of westernized lifestyle and
old world traditions (elements.science.psu.edu, 2018). while
 United Kingdom culture is more inclined towards western culture, as the country is a
developed country, use of technology is very high, and lifestyle adopted is luxurious.
Where the variety of products to offer customers is much more in every aspect, whether
shopping options, beverage option or anything else are very much, consumption of a
healthy beverage like green tea is quite low (Greig, 2015).

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References
Cai, M. (2018). The Characteristics of Chinese and Westerners—From the Comparison of Tea
and Coffee Culture. Lecture Notes on Language and Literature, 10-16.
Chaffee, J. (2017). Tea in China: A Religious and Cultural History by James A. Benn, and: The
Rise of Tea Culture in China: The Invention of the Individual by Bret Hinsch. Harvard
Journal of Asiatic Studies, 493-502.
elements.science.psu.edu. (2018). Chinese Culture, Tradition, and Customs . Retrieved from
elements.science.psu.edu:
http://elements.science.psu.edu/psu-pku/student-resources/resources-for-penn-state-
students/chinese-culture-tradition-and-customs
financialexpress. (2018). Strong demand in China, India boost tea consumption and production.
Retrieved from financialexpress: https://www.financialexpress.com/industry/strong-
demand-in-china-india-boost-tea-consumption-and-production/1184588/
finder. (2018). Health Statistics. Retrieved from finder: https://www.finder.com/uk/health-
statistics
Greig, H. (2015). Gender and material culture in Britain since 1600. . Macmillan International
Higher Education.
Scott, E. (2017, 09 29). Treasonous British people now prefer coffee to tea. Retrieved from
Metro: https://metro.co.uk/2017/09/29/treasonous-british-people-now-prefer-coffee-to-
tea-6965063/

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Statista. (2018). Sales value of tea in the United Kingdom (UK) in 2015, by category (in million
GBP). Retrieved from Statista: https://www.statista.com/statistics/382133/tea-market-
sales-value-united-kingdom-uk-by-category/
statista. (2018). Tea China. Retrieved from statista:
https://www.statista.com/outlook/30020000/117/tea/china#market-globalRevenue