It is worthwhile to mention that Starbucks considers factors such as purchasing power of potential customers, demographics, societal norms and standards, consumers’ attitudes, perceptions and inclination towards its brand, the competitors’ strategies and their pricing policy, the availability of raw material in host nations, the exchange rate fluctuations, corporate tax rates, interest rates and government support to formulate and implement its strategies and make decisions for long-term business growth and monetary gains. (Merced, 2008) and (White, 2008)
The strategic planners at Starbucks started observing fall in sales revenue and volume in 2008 when USA suffered with a sub-prime property mortgage crises and trade deficits. This in turn resulted in bankruptcies and closures of many financial and production related business institutions thereby intensifying the unemployment issue and deteriorating future employment prospects. The skyrocketing international oil prices also resulted in inflation that then forced customers to tighten their belts and demand fewer luxurious products such as Automobiles and Coffee. Hence, Starbucks planned to expand its Chinese operations where a large pool of potential customers has an inclination towards branded products offered by supranational organizations. Chinese government also supported Starbucks so that it could enhance interaction and communication with Chinese farmers in Yunnan (an agricultural area), which produces over 30,000 tons of Coffee Beans. In simple words, this region alone accounts for over 95% production of Coffee Beans, so Chinese officials seek help and guidance of Starbucks in business management, production and marketing process to ensure higher yield per acre and premium quality for domestic use and exports. (White, 2008) and (Haoting, 2009)
Indeed, China is a best available alternative for Starbucks since it has ...
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