Tuesday, November 27, 2012

Study Business English with this Mini-Case Study on Starbucks

Starbucks is "rolling out" new stores
in China.
Did somebody say "coffee?" I am a huge fan of all things caffeinated -- that would be coffee, followed by tea, and let's not forgot chocolate (the darker the better and I currently working on a 90% cocoa dark chocolate bar, very delicious!). So when I opened the Wall Street Journal today and saw an article about Starbucks expanding into China, I decided to grab a cup of coffee and turn the story into a short business English lesson for this Blog's 12 official followers (thank you, loyal readers!) and the hundreds of others who visit this blog to improve their business English.

The article is entitled, "Starbucks Plays to Local Chinese Tastes." Here's the piece of the article we will expore, with the target vocabulary highlighted in blue:

After nearly 14 years of working to persuade China to buy into its foreign coffee culture, Starbucks Corp. is aiming to become more Chinese as it plans a rapid expansion in the country. Belinda Wong, president of Starbucks China, said in an interview that Starbucks aims to roll out 800 new stores in the next three years to add to its existing fleet of 700...
The company aims to capture a larger market by going more local and applying its cultural insights, Ms. Wong said. For instance, whereas kiosk-sized stores work well in the U.S., where office workers grab bacon-gouda sandwiches to go in the morning on the way to work, Starbucks has learned that Chinese consumers value space and couches on which to relax in the afternoons.
The coffee company is adding some stores that are nearly 3,800 square feet and can seat consumers who come with groups of friends and business partners. Starbucks also has discovered that Chinese tastes for coffee go only so far. It plans to introduce new Chinese-inspired flavors, building on existing favorites like red bean frappuccinos …

Businesses that have failed to grasp the local culture, importing alien models, have fallen out of favor. In September, Home Depot Inc. closed all seven of its remaining big-box stores in China after years of losses, having discovered that the do-it-yourself home improvement model doesn't work well in a do-it-for-me Chinese culture.

Now let's look at the vocabulary highlighted in blue:

(to) roll out - to introduce (often a product or service, in this case a retail store). Wow, with this "roll out," Starbucks will more than double the number of stores it has in China. And you thought there were a lot of Starbucks in Manhattan!

(to) capture a larger market - to get more customers (In this case, to get more people in China to switch to a visit from Starbucks coffee from whatever coffee house, tea house, or other place they are currently visiting).

(to) go only so far - to have limitations (In this article, it means that the Chinese customers do not have an unlimited thirst for just plain coffee. If Starbucks is going to sell them more drinks, the company needs to figure out what their tastes are and create drinks based on them -- hence the red bean frappuccion (whereas in the USA, you can get a Caramel Brulée Lattewhich I am pretty sure is not on the menu at Starburcks in Shanghai!).

(to) fall out of favor - to stop being popular; to become unpopular. (In this case, they are talking about the fact that the "global strategy" is no longer as popular and effective as it used to be. With a "global strategy," companies typically treat the world as one big market and have little or no variation in products or services across the various countries).

do-it-yourself - as the word suggest "Do it Yourself!" as in, buy all the stuff you need for your home improvement project and do your own construction work -- as in, re-model your own kitchen, re-tile your own bathroom floor, or install your own new toilets. This is often abbreviated "DIY".

To summarize this article, Starbucks is going to roughly double the size of its business in China. And instead of replicating what works in the United States, the company has figured out how to customize its offerings to suit the tastes of the Chinese consumer. That means drinks that appeal to them and their native cuisine (red bean frappuccinos, Hainan chicken and rice wrap) and plenty of space to hang around on a couch while drinking them. The company is also taking steps to attract non-coffee drinkers. Here's a closing quote from the article, in which we hear from an English teacher in China:

The company is aiming to cater to noncoffee drinkers like Cheng Xiaochen, a 27-year-old English teacher who hates coffee but occasionally meets his students and business partners at Starbucks in the afternoon. "It's a good place to meet people," said Mr. Cheng. "But the coffee is so bitter it tastes like Chinese medicine." Mr. Cheng said he sticks to mint hot chocolate and looks for other sweeter flavors.

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