China has been one of the rapidly growing economies in the world with high growth opportunities. Since 1979, China has opened up the economy gradually to foreign business (UN, 2009). In December 2001, China became formally a member of World Trade Organization (WTO), which provided further incentives for increased integration with the world economy. The first Starbucks shop was opened in 1999 in Beijing and now it has 190 shops all over the mainland China. Initially, China was mainly a tea consuming nation with only very small coffee market while now reports show that the coffee consumers are rapidly growing (Starbucks, 2008). According to the latest reports, Starbucks has decided to setup China as its largest market outside North America and is now in the process of careful planning for that(The Wall street Journal,2010). In spite of the reports showing the company facing competitive pressures in several other countries, the success of the company in Chinese market deserves special mention(ICMR,2009).In this context an analysis on the key success factors of Starbucks in Chin market, its main challenges and opportunities has important policy implications.
The various external factors influencing the performance of an organization are evaluated through external analysis. Both the positive and negative trends influencing a company’s performance are evaluated through this process. The positive trends are opportunities to a company and the negative trends are the threats faced by the company. This analysis is very relevant for assessing a company’s present situation so that the company can develop new strategies or change existing strategies by making use of the opportunities and threats to the company (Coulter, 2005). This according to Coulter (2005), there are both specific environment, which influence directly the company’s strategic decision and general