Strategy challenge: Diffusion or confusion?

Strategy challenge: Diffusion or confusion?

by Team A (Keith, Lucy, Juan, Alexi)

Standing in the middle of the CBD in Guangzhou surrounded by sky high buildings showing all the big brands, we couldn't stop wondering - 'are we really in China?'

Desperately needing a coffee, we spotted Costa Coffee! Toasted sandwiches, long blacks and muffins, complete with European street scenes on the walls.

It's an internationalised cafe chain with little adaptation perfectly positioned as a taste of European coffee culture.

The Chinese-speaking waiter reminds us we are still in China, but Costa Coffee is obviously targeting the wealthier Chinese market with matching premium prices.

The waiter is well inducted and explains the competitive advantage for Costa coffee -- semi automatic coffee machines instead of the fully automatic Starbucks ones.

The personal touch -- but for us the real differentiator is the standardised business model satisfying middle class Chinese prestige!

This is confirmed by a local lady sitting next to us who tells us coffee is still is a luxury drink with no way it can be consumed everyday.

Now let's go shopping! The GTLand mall, with all the international brands like Nike or Adidas, brings us a home feeling. We see clothing recycling, indoor trees and natural lighting -- who said the Chinese don't care about the environment?

But, sitting in the mall for a moment, surrounded by the familiar brands ... Columbia, Adidas, Nike, Samsung ... suddenly we felt like we could have been in Queensgate, Lower Hutt. In the consumer mass market, it seems, no matter where in the world, a mall is a mall is a mall.