Page 12 - The South China Business Journal
P. 12
pth
Joint Ventures in
China: Learning
from Starbucks &
McDonald’s
Americans are feeling less
optimistic about doing busi-
ness in China.
In its latest survey, the American Picture from bing.oom
Chamber of Commerce in China
found that more than three-
quarters of US-based companies
expressed doubts about investing
in China, while over 45 percent of
those already in the country stated
that their revenues were dropping.
China’s economic growth has McDonald’s Formed tions for McDonald’s expansion,
slowed down since 2012. Its gross New JV to Expand according to media statements
domestic product rose only 6.7 per- made by Zhang Yichen, McDon-
cent in 2016, registering its slowest Recently, on August 9, McDon- ald’s China chairperson, and CEO
pace of expansion in two decades. ald’s announced plans to open of CITIC Capital.
new restaurants in China to reach
Apart from sluggish growth, 4,500 within the next five years. The group owns real estate that
China’s challenging regulatory McDonald’s announced the plan will help McDonald’s expand its
environment and fierce market after finalizing a new joint ven- footprint across China, especially in
competition makes doing business ture (JV) with CITIC Ltd., CITIC third and fourth tier cities. The group
much harder for foreign compa- Capital, and Carlyle Capital. The would like to increase the proportion
nies in the country. state-owned group will have full of its outlets in these developing cit-
ownership of McDonald’s existing ies from 35 to 45 percent.
Yet, two global fast-food giants restaurants as well as additional
– McDonald’s and Starbucks – new outlets for the next 20 years. Further, the JV will help bring
continue to expand their opera- local market knowledge and local
tions in China. In this article, we The strategic partnership is resources to the management of
discuss how the two companies aimed at securing better loca- McDonald’s in China, the absence
have pursued and expanded their of which had caused McDonald’s
operations, and why China is still
seen as a valuable market.
10 AmCham South China
Joint Ventures in
China: Learning
from Starbucks &
McDonald’s
Americans are feeling less
optimistic about doing busi-
ness in China.
In its latest survey, the American Picture from bing.oom
Chamber of Commerce in China
found that more than three-
quarters of US-based companies
expressed doubts about investing
in China, while over 45 percent of
those already in the country stated
that their revenues were dropping.
China’s economic growth has McDonald’s Formed tions for McDonald’s expansion,
slowed down since 2012. Its gross New JV to Expand according to media statements
domestic product rose only 6.7 per- made by Zhang Yichen, McDon-
cent in 2016, registering its slowest Recently, on August 9, McDon- ald’s China chairperson, and CEO
pace of expansion in two decades. ald’s announced plans to open of CITIC Capital.
new restaurants in China to reach
Apart from sluggish growth, 4,500 within the next five years. The group owns real estate that
China’s challenging regulatory McDonald’s announced the plan will help McDonald’s expand its
environment and fierce market after finalizing a new joint ven- footprint across China, especially in
competition makes doing business ture (JV) with CITIC Ltd., CITIC third and fourth tier cities. The group
much harder for foreign compa- Capital, and Carlyle Capital. The would like to increase the proportion
nies in the country. state-owned group will have full of its outlets in these developing cit-
ownership of McDonald’s existing ies from 35 to 45 percent.
Yet, two global fast-food giants restaurants as well as additional
– McDonald’s and Starbucks – new outlets for the next 20 years. Further, the JV will help bring
continue to expand their opera- local market knowledge and local
tions in China. In this article, we The strategic partnership is resources to the management of
discuss how the two companies aimed at securing better loca- McDonald’s in China, the absence
have pursued and expanded their of which had caused McDonald’s
operations, and why China is still
seen as a valuable market.
10 AmCham South China
