Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

Why Luckin Coffee Survived After Its Scandal?

A SWOT Analysis with Starbucks as a Comparison

Authors
Zhaoyuan Gu1, , Boyang Qi2, , Yirui Zhao3, *,
1Business Analytics, Fordham University, School Address: 155 West 60thStreet, NY, USA
2Japanese, Shanghai International Studies University, School Address: 1550 Wenxiang Road, Songjiang District, Shanghai, China
3Economics and Mathematics, Duke University, School Address: Durham, NC, USA

These authors contributed equally.

*Corresponding author. Email: yirui.zhao@duke.edu
Corresponding Author
Yirui Zhao
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.410How to use a DOI?
Keywords
Luckin Coffee; SWOT analysis; Consumer Behavior; Marketing Strategy; Coffee Market
Abstract

Because the per capita consumption of coffee in China is far lower than that in western countries. The market potential is very large, and there is a market vacancy between high-end coffee brands and low-end coffee brands. Luckin Coffee decided to build a cost-effective intermediate coffee brand in China. At present, although it has experienced financial fraud, it has still achieved certain success. This paper uses the SWOT method to analyze the strengths, weaknesses, opportunities, and threats in the operation of Luckin Coffee since the financial fraud scandal in 2020. Based on the theory of consumer behavior and the actual situation of Luckin Coffee’s operation, it also points out the factors that positively impact consumer decisions in coffee consumption, such as culture, brand credibility, product quality, advertising, and big data, etc. This paper is different from the previous academic evaluation of the initial stage of Luckin Coffee, where the initial strengths may have changed over time to become a drawback for the company’s future development. With this in mind, this paper assesses the recent situation of Luckin Coffee and compares it to Starbucks, a multinational coffee giant brand with a considerable share in the Chinese coffee market. The study found that consumers are willing to continue to consume Luckin Coffee’s products despite its notoriety in the capital markets, suggesting that Luckin Coffee’s business model, which was rebuilt after the scandal, does maintain some appeal to consumers. However, Luckin Coffee still needs to make many efforts if it wants to fully repair its reputation and obtain more profits.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
978-94-6239-483-4
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.410How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Zhaoyuan Gu
AU  - Boyang Qi
AU  - Yirui Zhao
PY  - 2021
DA  - 2021/12/15
TI  - Why Luckin Coffee Survived After Its Scandal?
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 2521
EP  - 2528
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.410
DO  - 10.2991/assehr.k.211209.410
ID  - Gu2021
ER  -