Success for a business in a large market such as china can be a very difficult thing to achieve; there are many factors that can affect the success or failure of a business that decides to merge into China’s markets. Most people would assume that due to the very large population of china (roughly 1. 35 billion/l ,363,496,913) operating a business there would not be a problem, this however is incorrect, Just because there is lots of people there doesn’t for a minute make it any easier to set u-p and run a successful business.
The main point I would say that is essential to success in china s adaptation. If a business is able to adapt well to its surroundings, i. e. the ability to easily change its products and services to match the needs of the local consumer. Just because a company has been successful in other large countries with big markets, does not mean that they have what it takes to succeed everywhere. Being able to change a product range, or the way a service is provided to the consumer needs to be carried out in order to do well in China.
Take for example Starbucks coffee, what Starbucks did right in China is a perfect example of how food brands can ucceed despite rising labour and real estate costs, and increased competition on the Mainland. Instead of trying to force onto the market the same products that work in the U. S, such as whip cream-covered frozen coffee concoctions, Starbucks developed flavours (such as green tea-flavoured coffee drinks) that appeal to local tastes.
This change in the products that Starbucks offer is the reason why people in china bought into the Starbucks chain, by seeing products that they would normally drink, and having drinks made to their own needs and wants Starbucks was able to cater recisely to what they wanted by doing research into what would work well. As well as the products, Starbucks also changed the way in which the consumers actually got their drinks. Rather than pushing take-out orders, which account for the majority of American sales and is how they made such a big empire, Starbucks adapted to local consumer wants and promoted dine-in service.
Making their chain stores very traditional and fitting with the local culture. Surprisingly Starbucks charges as much as 50% more for some of its products in China than in the U. S. , the U. K. and India, but yet it is still a huge success, this is because the business catered well for the needs and adapted. Carrying a Starbucks cup is seen as a status symbol, a way to demonstrate sophistication and the capability to afford a personal luxury for the up- and-coming middle class in China.
This links into the brand recognition that Starbucks has created for itself and shows how they carefully targeted their products at the new middle class, it is estimated that it’s more than 300 million, already larger han the entire population of the United States. This middle class is about 25% of the total Chinese population and as Starbucks has such a recognisable brand people are more liable to visit the store. However, that being said some large companies have tried to adapt for the Chinese markets, and failed despite their efforts.