Research is a process:
Featuring Starbucks' success in China
Since 1971, when
Starbucks first started at Pike Street Market in Seattle, the company has grown
to 30,626 stores in 2019 (Smith, 2019) .
Of this number of stores, about 9000 are in Asia Pacific with 4,000 stores in
China (Starbucks (China), 2019) . Opening its first Starbucks
in January 1999, today almost half of the stores in Asia Pacific are found in 150
cities across China. It is fascinating to see an American coffee company
succeed in a very Chinese tea drinking culture. Such research could help other
companies seeking to do business in China (Cheng, 2019) ,
figure out what the Chinese people look for.
As part of the research
process, it is important to put together an outline that includes choosing a research
topic and specific question that addresses aspect(s) of the topic. The
following step will then involve deciding on the approach to take in terms of appropriate
methodology. Once this is determined it would then be necessary to collect and
analyse data to derive an outcome based on the investigation.
Though business
research ultimately helps companies build a better business by identifying
issues, better understanding customers, mitigating risks and so on, one must
also consider that it could end up being a costly and time consuming affair with
results based purely on assumptions. Inappropriate sample sizing and biased
sampling must be top of mind when carrying out research as results have a
propensity to skew results. With rapid changes in the market, it is also
important to note that research could very quickly end up becoming obsolete
The particular research will look at Starbucks’ success in China as a topic, while the question will seek to find out why the Chinese people are attracted to Starbucks.
Research Topic
Looking at Starbuck’s
entry and growth into China, one cannot help but be curious about how a company
that primarily sells coffee can be successful in a country where tea is its
staple drink. Though there are many purposes as to why research is often carried
like – facilitate learning, better understand issues, validation, build a
better business and so on
The topic for this
research is then ‘To understand how Starbucks is making it big in China’.
There are, of course,
many factors affecting its continuous growth since 1999 but the relevance lies
in what Starbucks did, and is currently still doing in a better way, to ensure
its success where other multinational companies have either failed or only
marginally grown their businesses. Of
all the known reasons for Starbucks’ success in China, the ones that stand out
most prominently are its sensitivity to the local Chinese culture across the
different cities it serves, its formation of long term local partnerships, plus
the localization of products in individual markets across the country
From a practitioner
standpoint, being able to get to customers the way Starbucks has, are key
ingredients for a recipe that other foreign companies can use as a reference
point for their own strategy to grow their business in China.
Research Question
When looking at
Starbucks’ business model, one would notice that it is about people within
various communities coming together over some form of social / professional
activity while enjoying what the company has to offer in their cafes. Many
questions can be asked about how Starbucks’ became successful in China thus, it
is then important to ensure that a research question focuses on the specifics.
A good research question must look at one aspect of the way Starbucks’ serves
and attracts its customers, without whom it will not be in business.
The research question
should logically then revolve around its customers and the question of ‘Why
are Chinese customers making Starbucks a lifestyle choice?’
Formulating a good
research question is important as it provides clear focus and purpose
Starbucks’ customers of
today, differ drastically from customers they had in the beginning thus, it is
important to know what Starbucks has done, all these years, to deliberately
bring about its own long term success amongst its Chinese customers. An important
part of this research is to question and learn more about how Starbucks, a
foreign company, keeps customers coming back in China’s highly competitive
world of retail cafes.
Methodology
Consumerism within the
Starbucks context is a highly emotional play. It is important to analyse
customers from the point of view of how they feel from the time they enter a
Starbucks store, order a drink, sit down, engage in some form of activity and
leave. How does such an episode make them want to come back again to repeat
this journey all over again? Has visiting a Starbucks café every so often
become part of a lifestyle?
To answer these
questions, a mixed methods research approach is recommended since
feelings and state of mind cannot be fully measured in numbers.
From the 20 years of
servicing Chinese customers, Starbucks has intimate knowledge of what draws
their customers in. It will be good to validate what is already known while at
the same time, find out more about what else needs to be considered to support
growth efforts based on what Starbucks defines as its target addressable
market. Quantitative data is good when theories need to be tested and validated
in a controlled manner where data is analysed numerically using various
statistical and graphical techniques. Data is usually collected in a standard
manner to facilitate consistency. When doing quantitative analysis, it is also
important to ensure that the right sample size is determined as too small a
size might yield inaccurate results and too big a sample maybe futile and time
consuming
Qualitatively, the
researcher has the task of collecting data that would be useful in deducting
and interpreting findings that would be considered new to Starbucks. New
information on an old topic is very useful. Knowing what current customers look
out for today and in the future is what Starbucks needs to progress.
Qualitative research is interpretive in nature as the researcher is responsible
for making sense of the data collected in order to derive sensible results and
conclusions
Data Collection and Analysis
In a mixed research
environment, both quantitative and qualitative data will be collected. This
collection of data will be based on available collection methods in the form of
observations, interviews, questionnaires and focus groups
In this case, questionnaires
will be used to obtain quantitative data from Starbucks customers in a
structured manner to validate why they frequent the cafes as often as they do.
The questionnaires will also provide a platform to find out what the
respondents expect from Starbucks in future by having them comment on how the
café could be more a part of their lives.
Thinking about
semi-structured data collection – can it only be collected through interviews,
or could a questionnaire have a section that is semi-structured as well? If interviews
are not required to obtain semi-structured data, then it would be wise to first
start off with questionnaires. Interviews are time consuming to conduct but able
to provide semi-structured qualitative data that would be useful when doing
in-depth analysis. The insights provided from words, sentences and paragraphs are
very valuable when carefully categorised and analysed. It would help a company very
quickly incorporate the needs and wants of customers into future strategic
plans.
The sample size that
could be obtained through questionnaires is huge and easily collected. This
will eliminate the worry of being able to get a large enough sample size. The
data collection, however, should not be confined to just Starbucks customers. A
separate questionnaire for non-customers should also be formulated to help the
company find out why the respondents are not, till this day, customers of
Starbucks. It is imperative for Starbucks to know this if it intend to realise
it growth plans in China.
Interviews are a great
way to garner insights but they are open to individual interpretation,
especially if they are unstructured. The best middle ground are semi-structured
interviews as a follow on step to questionnaires where more insightful data can
be collected if necessary.
It is difficult to
understand why customers frequent Starbucks just through observing them at the
café thus, not sure if quality data could be collected just by looking at
customer behaviour. It is for this reason that data collection through
observation is not a top choice.
Good data analysis techniques
and in-depth knowledge of wants of the Chinese people is important when
analysing the data collected. The quantitative data collected will allow for
numerical analysis that would provide the necessary answers that tell Starbucks
if what they are doing today is aligned with the opinions of its customers. On
the qualitative side, semi-structured data will provide answers for how the Starbucks
of the future should operate.
Ethical Considerations
As with everything else we do in this
world, research too must be done ethically. Ethical research exists to protect participants,
researchers and companies involved the research. In research, ethics take the
form of integrity, respect, voluntary participation, informed consent, data
privacy / confidentiality, responsible analysis, data management compliance and
researcher safety
What all this means is
that in a research project, when collecting data from individuals, they must be
aware of this collection and give explicit consent to allowing the data
collected to be used for its intended purpose. The collection of data must also
be of a voluntary nature where individuals are not pressured or coerced into
providing the data. The data collected must be kept in accordance to data privacy
laws and managed according to statutory requirements in countries within which
the data is collected. Also, when collecting data, the researcher must not
influence an individual’s thinking by providing ‘incentives’ that could result
in compromised opinions.
Researchers must always
act with integrity when collecting and analysing data. They should not be coerced
into performing duties outside parameters of research due to pressures from influencers
trying to skew research results. On their part, researchers must analyse data
with integrity, honesty and not misrepresent any findings just to prove or
disprove a point. Deception must be avoided at all cost.
Above all, individuals
and researchers must be protected from any harm that might befall them whether
physical or psychological.
Concluding Comment
Research, as a process
is very methodical and must be very well thought out from the get-go. No piece
of research can be executed well without the guiding steps of the research
process.
Getting to a research
topic did not seem difficult at first, but then taking on the challenge of
determining relevance, feasibility and ability to collect enough data on the
topic made for cautious thought. Within the choice of a research topic, there
is also a sequence that needed to be followed. The topic had to be first
relevant before a decision could be made on whether it was feasible. Following this
then came the part of data collection which was essential to determining results.
It had to be determined if useful and ample data could be collected to ensure
there was enough of it to derive accurate results. There were sequences within
sequences, just on the research topic alone. This was not obvious until the start
of the assignment.
Next came the part of
the research question. Based on a single research topic, numerous questions
could be asked. These questions, though separate were interdependent in terms
of getting to an answer. The dilemma stemmed from asking the right question,
one that was specific in nature. A question that could represent the very
question as to why the Chinese are incorporating a company like Starbucks into
their everyday lives. The success or failure of research is affected by the questions
asked and how they are being asked. The specificity of a research question
cannot be underestimated. If a question is not specific enough, the data received
could be open to interpretation based either on point of view or context.
The collection of and analysis
of data is the centre of any research. It is through the interpretation of
data, both qualitatively and quantitatively, that results are derived. Whether
to prove, validate, better understand or educate, ethically collected data is
important in providing the answers sought when analysed honestly, without
compromise or deception and with integrity.
In the case of
Starbucks, it is important for the company to validate what they know about the
customer, when associated with Starbucks. And through quantitative analysis, that
this validation is current. What is also important is the fact that through qualitative
semi-structured questions, the company is also able to better understand the
wants and needs of their customers, hence, giving insights into what the future
holds.
In essence, this research project will help Starbucks better understand their customers and non-customers in China. The insights gathered will pave the way for long term growth and sustainability in a place where the world’s largest population resides.
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