If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Starbucks and China have something in common. They both over growth with different product but same way and it all come on consumption. Starbucks and China grew faster than others and they promising prosperity. As uncertainly economic world, they have suffer from late stage growth obesity (LSGO).

Everday we saw many new Starbucks outlet around the world. Somethimes even close with another outlet. In order to gain their aim, the quality of it`s product becomes less than what it should be.

What happen with brutally effort to add more stores is Starbucks facing big mistakes in location. Until we found they try to close about 600 store that underperform in USA and close 61 of its 84 Australian outlets in Australia.

Starbucks need to figure out long-term leases terminated, costs for corporate to create in hopes of high growth, and corporate culture about partnership strained by barista layoffs.

This starbucks story is similar with China story. This country also suffering from a severe case of LSGO.Since 1998 its GDP has grown at about a 10% annual real growth rate, and its economy more than tripled in size (in real terms).  There were no recessions, just expansion – the Chinese miracle growth? Vitaliy wrote. China`s growth very well: big population who migrate from low to higher productivity activity, cheap labor, a capitalism-friendlier communist government, and insatiable demand from the US and the rest of the developed world for cheap goods. The consequences of LSGO are likely to be very painful for China.  As of today we don’t know how much of the recent growth came from wasteful, unproductive growth.  Only after a slowdown will the true problems surface.

So, what we said that coffee chain Starbucks and China have a lot in common is true.

source: China and Starbucks: Late Stage Growth Obesity

Popularity: 10% [?]

Technorati Tags: coffee, coffee growth, Starbucks