Chen Beibei

Executive summary

Chen and her Husband Liang have a steady income from there furniture shop and they want to invest in something that will give them a substantial return in the long run. They want to use the same customer network they use for their furniture shop. Chen has to make a decision before Valentine’s Day. One of her friends suggested opening a coffee shop. Now Chen is faced with a dilemma between YiWie or HaFo coffee shops. HaFo is a better option for Chen for her to utilize her current customer base.

Statement of the problem, opportunity, and objectives

Liang and Chen Qian lived in Jiangnan, located in the Yangtse River delta in Jiangsu province in china. In 1994 they opened a furniture shop, where they designed and manufactured furniture. Chen was very outgoing, sincere and charming; she took the role as a marketer for shop. During the course of marketing, Chen developed a relationship with wives of local government officials and enterprise leaders. Their customers grew so did their business, now they have a steady stream of income. The market for the furniture they sell has been saturated and does not promise too much growth. The couple has accumulated capital from their furniture business and wants to reinvest it. They are willing to take on risk to get higher return on the investment

The couple wants to invest in something that will suit Chen’s strengths and interests since she will be in charge of the new business. What the couple really hopes is that they can utilize their existing customer base of middle to upper class income residents. Meeting with one of wives clubs member she gave Chen the idea of opening a specialty coffee shop, since there isn’t one in JiangNan.

Analysis of the situation

China was a tea drinker nation; since it has been getting more westernized Chinese population is starting to drink more coffee. According to statistics 32 percent of the residents of inland cities drank coffee regularly. 30 percent of them drank instant coffee, however; they are dissatisfied with it. Dissatisfied customers are more attracted to fresh coffee not only because it’s better but also because it imitates the western lifestyle. This is one of the reasons that Starbucks and Manabe coffee companies have been successful in expanding into China. As the western culture increases in china there will be an increasing demand in coffee. The increasing population will also affect the demand of the coffee.

Chen expected the investment to provide a substantial return in the long run. Chen does not have any experience or expertise in operating a coffee shop. The city they live in JiangNan does not have any specialty coffee shops. JiangNan occupied almost 1000 square kilometers and has populations of 540,000. The GDP per capita was RMB16,000, two percent of the population had income above RMB800,000