Core Viewpoint - Starbucks is considering selling 70% of its Chinese business while retaining 30%, which raises concerns about the feasibility and implications of such a strategy in the competitive market [5][30][34]. Group 1: Business Strategy and Market Position - Starbucks CEO expressed confidence in the Chinese market, stating the company is evaluating over 20 interested institutions for potential partnerships [5]. - The valuation of Starbucks' Chinese business is reported to be as high as $10 billion [5]. - The company has maintained a fully self-operated model in China, contrasting with its North American strategy, which has a mix of self-operated and franchised stores [8][12]. Group 2: Store Expansion and Performance - As of the end of fiscal year 2024, Starbucks had 40,200 stores globally, with 21,000 being self-operated, representing 47.7% of the total [10]. - The number of self-operated stores in China reached 7,594, significantly surpassing Japan's 1,809 stores [14]. - The company has seen a decline in market share in China, dropping to 14% by 2024, amid rising competition from local brands [16]. Group 3: Financial Performance and Profitability - In North America, self-operated stores contribute 90% of revenue but less than 50% of operating profit, highlighting the cost structure challenges [18]. - For fiscal year 2024, North American self-operated business reported an operating profit of $2.6 billion, with a profit margin of 10.7% [19]. - The international division, particularly in China, has shown promising growth, but the self-operated business has faced significant operating losses, with a loss rate of 14.3% [25][26]. Group 4: Strategic Challenges and Considerations - The proposed sale structure of retaining 30% equity while selling 70% to multiple buyers is viewed as problematic, potentially leading to governance issues and lack of control [30][34]. - The comparison with Uber's exit from the Chinese market illustrates the complexities and potential pitfalls of maintaining partial ownership in a competitive landscape [34]. - Starbucks' strategy of retaining a minority stake may hinder the ability to fully capitalize on the growth potential of its Chinese operations [34][35].