In a recent article in the Intelligencer, Georgetown University Professor Arthur Dong offers his thoughts on Starbucks as an equity investment. Dong, who teaches strategy and economics, is bullish on Starbucks’ future, arguing that there are three major growth opportunities for the company that investors are overlooking: its growing traction among the Chinese middle class, its increasing penetration into smaller international markets such as Italy, and new forms of distribution that could make its way into home kitchens.
Dong points out that although Starbucks has a presence in major Chinese cities such as Beijing and Shanghai, it has not yet tapped the market in secondary and tertiary cities, which leaves it significant opportunity for growth in the country. He also argues that Starbucks has been able to differentiate itself in smaller affluent markets such as Italy.
“With cocktails and affogato on the menu, Starbucks expects this premium model to crack into Italy’s nearly £6 billion coffee market. More importantly, it shows their ability to adapt to a country’s demands: the Milan Starbucks is much different than their store in Beijing than a store in Midtown. It’s a signal of their adaptability to different markets,” Dong says.
The Intelligencer is a New York Magazine website that reports on politics, business, and technology news. For the full story, click here.