Page 13 - The South China Business Journal
P. 13
fall behind other food brands ever acquisition. After establishing Picture from bing.oom
such as KFC and Yum China in a considerable foothold in China
the last few years. For example, with the help of its JVs, Starbucks in compliance with China’s fluid
McDonald’s confirmed plans to now intends to absorb the growing regulatory changes while main-
introduce digitalized and person- profits instead of sharing it with taining specific business records.
alized dining experiences, which JV partners. Given the huge mar- The process, at times, can be bur-
are popular concepts for many ket share, the buyout is intended densome and costly for the newly
Chinese consumers, following the to counter it slowing sales in the established foreign companies;
expansion announcement. US and establish China as its local partners can help with best
home market outside of the US. practices to manage compliance.
The JV in China is one part of a
global effort by McDonald’s to shift Joint Venture: A Safeguarding the Intellec-
to a lighter global footprint; the Unique Approach to tual Property
company would like a majority of its Do Business in China
restaurants to operate as franchises. Intellectual Property rights
Much of what Starbucks and Mc- infringement – intentional or
McDonald’s expects China to Donald’s have achieved in China is unintentional – is a common
become its largest market outside the result of their partnership with concern among foreign companies
of the US. By relinquishing con- local operators. entering China’s market for the
trol, the fast food giant hopes to first time. Safeguarding technol-
regain its market share with local What is important for businesses ogy, a company’s unique business
decision-making that is flexible to to learn is that pursuing a JV practice, or simply the business
meet consumer demands. strategy in China works differently logo against IPR infringement re-
for different businesses at differ- quires a mix of legal, practical and
Starbucks Bought ent times. Once the strategic goal technical measures that can prove
out JV Partner to is met, companies may alter their to be a costly affair. JVs can help
Increase Value partnership as per the business companies monitor the market for
contract, or end it. possible infringements and save
Starbucks too plans to increase the legal cost.
its number of outlets in China A successful JV can present valu-
to 5,000 by 2021. But contrary to able opportunities while reducing Leveraging the Local Talent
McDonald’s strategy, Starbucks costs and risk, especially in times Most companies entering China
in July bought out its East China of slow or accelerated growth. have limited local knowledge of
joint-partnership – formed with Moreover, it can help companies Chinese business culture, and rarely
Uni-President Enterprises Corp gain access to new markets and have the language skills that are
and President Chain Store Corp distribution networks, along with essential for dealing with local staff
– to take over full control of its new resources. and Chinese clients on a regular
market operations. basis. Establishing a JV can help
Some of the ways a JV can help companies get the best of talent to
However, Starbucks is already foreign companies establish a busi- work for them at a competitive cost,
opening more than 500 outlets ness in China are discussed below: and enhance its business network
in China a year, suggesting that and local market knowledge.■
buyout was about more than Identifying the Right Market
expansion. Starbucks China CEO Though most foreign companies This article was first published by Dezan
Belinda Wong told the media that remain focused on coastal cities, Shira & Associates.
the company viewed full owner- there is a huge market for Western
ship as an opportunity to improve products in other parts of China.
customer experience, through “in- A local partner with pre-existing
store third place experience and market knowledge can help its
digital innovation”, and leverage partner find the most competitive
their business infrastructure in a location to target first.
market that is their largest outside
of the US. The US$1.3 billion Navigating the Regulations
buyout stands as Starbucks largest Foreign companies must keep
South China Business Journal 11
such as KFC and Yum China in a considerable foothold in China
the last few years. For example, with the help of its JVs, Starbucks in compliance with China’s fluid
McDonald’s confirmed plans to now intends to absorb the growing regulatory changes while main-
introduce digitalized and person- profits instead of sharing it with taining specific business records.
alized dining experiences, which JV partners. Given the huge mar- The process, at times, can be bur-
are popular concepts for many ket share, the buyout is intended densome and costly for the newly
Chinese consumers, following the to counter it slowing sales in the established foreign companies;
expansion announcement. US and establish China as its local partners can help with best
home market outside of the US. practices to manage compliance.
The JV in China is one part of a
global effort by McDonald’s to shift Joint Venture: A Safeguarding the Intellec-
to a lighter global footprint; the Unique Approach to tual Property
company would like a majority of its Do Business in China
restaurants to operate as franchises. Intellectual Property rights
Much of what Starbucks and Mc- infringement – intentional or
McDonald’s expects China to Donald’s have achieved in China is unintentional – is a common
become its largest market outside the result of their partnership with concern among foreign companies
of the US. By relinquishing con- local operators. entering China’s market for the
trol, the fast food giant hopes to first time. Safeguarding technol-
regain its market share with local What is important for businesses ogy, a company’s unique business
decision-making that is flexible to to learn is that pursuing a JV practice, or simply the business
meet consumer demands. strategy in China works differently logo against IPR infringement re-
for different businesses at differ- quires a mix of legal, practical and
Starbucks Bought ent times. Once the strategic goal technical measures that can prove
out JV Partner to is met, companies may alter their to be a costly affair. JVs can help
Increase Value partnership as per the business companies monitor the market for
contract, or end it. possible infringements and save
Starbucks too plans to increase the legal cost.
its number of outlets in China A successful JV can present valu-
to 5,000 by 2021. But contrary to able opportunities while reducing Leveraging the Local Talent
McDonald’s strategy, Starbucks costs and risk, especially in times Most companies entering China
in July bought out its East China of slow or accelerated growth. have limited local knowledge of
joint-partnership – formed with Moreover, it can help companies Chinese business culture, and rarely
Uni-President Enterprises Corp gain access to new markets and have the language skills that are
and President Chain Store Corp distribution networks, along with essential for dealing with local staff
– to take over full control of its new resources. and Chinese clients on a regular
market operations. basis. Establishing a JV can help
Some of the ways a JV can help companies get the best of talent to
However, Starbucks is already foreign companies establish a busi- work for them at a competitive cost,
opening more than 500 outlets ness in China are discussed below: and enhance its business network
in China a year, suggesting that and local market knowledge.■
buyout was about more than Identifying the Right Market
expansion. Starbucks China CEO Though most foreign companies This article was first published by Dezan
Belinda Wong told the media that remain focused on coastal cities, Shira & Associates.
the company viewed full owner- there is a huge market for Western
ship as an opportunity to improve products in other parts of China.
customer experience, through “in- A local partner with pre-existing
store third place experience and market knowledge can help its
digital innovation”, and leverage partner find the most competitive
their business infrastructure in a location to target first.
market that is their largest outside
of the US. The US$1.3 billion Navigating the Regulations
buyout stands as Starbucks largest Foreign companies must keep
South China Business Journal 11
