Michel’s Initial Launch into China

Week 6   MKX5260 Case Analysis      Student ID:  26644363      Student Name: Hao Xu

Please watch the video case of Michel’s patisserie and answer the following question in written format (also prepare the answers to other questions listed on the tutorial agenda for tutorial discussion):

• What is your assessment of Michel’s initial launch into China? What would you have done differently?

As we know from the video, China has a deep culture environment of tee. It means that Chinese people has their own favourite tastes for centuries. Therefore, the consumption of coffee in China was lower than local beverage, although the consumption of coffee had increased in some special and developed cities in China like Beijing and Shanghai in recent years. Because of low requirement of coffee, the Michel’s company is hard to sale their products. On the other hand, there are many competitors existed in China. One of the most powerful and successful coffee companies is Starbucks that has owned more than 500 stores in China. In fact, Starbucks’s image and experience are more accepted by Chinese people than its products like coffee.

To launch into Chinese market, Michel’s would face several challenges. Firstly, Michel’s has successful franchising system, which is the most important advantage of competition for the part of operation. The franchising system refers that the company prepared all the products in a central bakery, and then delivered to the franchisee’s shop. Thus, the franchisees just need to clear up the goods and start their own business. However, there are some issues existed in operating the franchising system in China. If the company could not set up a central bakery and relevant supply chain, the advantage of the company may be useless. As a result, the company could not obtain enough customer base and market share. So does the profit.