ESTABLISHING A COFFEE SHOP CHAIN IN CHINA

This essay presents a business plan for establishing a coffee shop chain in China. Currently, most of the coffee houses in China follow a differentiation strategy. This is to turn the regular fresh coffee experience into a high-priced luxurious experience. However, after almost twenty years of customer cultivation, the coffee consumption market in China is getting much more established, and customers want to drink coffee regularly. There is a big market demand for fresh coffee to consume as daily drinks with reasonable prices. This proposal is devoted to developing a coffee shop chain using a low cost strategy to offer affordable fresh coffee to consumers on a daily basis. The author assesses the competitive environment in the coffee house industry in China, identifies key success factors for the industry participants, and evaluates the viability of this new venture by analyzing the consistency of the strategy proposal and the company?s internal capabilities. The author concludes that this new venture can penetrate the market. The analysis also includes a five-year financial projection and profitability analysis. Assuming the company?s revenue growth rate is 20 percent per year, five years later, its annual net profit will be up to 350,316 RMB (CA$58,000)