Challenges in executing strategies regionally...

Do you believe that as a global brand Starbucks has right to provide different level of quality and service to their customers ?

Since I have first hand experience as being a customer of Starbucks in many different cities and regions, I would like to open up the discussion by comparing their offerings in different cities in China vs other countries in APAC region. What is reaching out to consumer at the end? And once end to end connection in executing a strategy is lost, does it create an opportunity for competition?

How likely a strategy can be successful if it fails in execution?

Starbucks Business Value

Starbucks set its mission as;

“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

According to a 2017 survey, the target audience for Starbucks is men and women in the middle to upper classes who can afford Starbucks higher priced beverages regularly.

It is still difficult to attract that group of people to your stores everyday without providing something really exclusive which is to provide a place to their customers to interact while enjoying their daily coffee.

In executing their strategy and delivering value to customers, Starbucks is perceived to be the best consistent brand ever. They commit to craft high-quality products that keeps people coming. Price is always at the premium level. They have variety of store designs with a common principle that "a coffeehouse is a place to find connection". Company is aiming to minimize its impact to environment and aiming to be consistent with their commitment on sustainability.

Since all these stuff sound perfect in terms of executing a strategy, let us see the execution in China.

A Big Change In Value Proposition

I walked into Starbucks in several different cities in China. It is amazing how company is expending its operation in the country considering its size and different consumption habits.

However, I was strongly disappointed when I saw products with premium price but lesser quality.

When you are in Hong Kong, Singapore or Japan, you see totally different quality and brand of milk being used with a vast variety of snack & food section. Quality of products can be positioned from mid to high. However, in China, the time you move into a store in 1st or 2nd tier cities, you question yourself twice before buying a product with milk or buy something from snack & food section. The most awkward situation is that you are still paying same prices for a low quality products.

There Lies The Opportunity

Such local execution of company' s global strategy is indeed creating a perfect opportunity for competition. I am just looking forward to see another global brand or a local chain to come up with a message "what we commit on, we deliver it globally"