2. Luckin Coffee’s PESTEL analysis
China’s backing of the coffee business, especially through the 2014 National Standard for Coffee Beverages standards, has created perfect circumstances for Luckin Coffee in the political sphere. The High-quality Coffee Processing Park and other initiatives in Yunnan Province to support coffee tourism and business are in line with government efforts to support domestic coffee production and trade (China Daily, 2022). These developments, together with reduced tariffs created by agreements like the Regional Comprehensive Economic Partnership (RCEP), allow Luckin Coffee to acquire raw materials more cheaply and look into potential for worldwide expansion (Whiting, 2021).

Economically, the large Chinese market and rising consumer spending will help Luckin Coffee. The government’s post-COVID-19 actions are increasing people’s purchasing power, demonstrated by National Bureau of Statistics (NBS) suggeting that China’s GDP has increased 5.3% in the first quarter of 2024. The economy is growing, increasing at a rate of 1.6% every quarter (Huaxia, 2024). The domestic market is growing as a result of initiatives to raise living standards and disposable income levels, which gives Luckin Coffee the chance to increase both its clientele and revenues.

Social factors such as rising living standards and globalization contribute to China’s coffee culture’s popularity, which is driving the coffee market’s rapid expansion. Between 2022 and 2023, Chinese consumers used around five million 60-kilogram bags of coffee, exceeding the approximately 1.8 million bags produced domestically. Coffee is becoming more and more popular among young adults (ages 25 to 44), with over 50% of drinkers consuming three cups or more a week. There is opportunity for expansion even with per capita consumption being lower than in developed nations, particularly in first- and second-tier cities. Urbanization, where a greater percentage of people are anticipated to make coffee intake a regular habit, is likely to continue the trend (Ma, 2022).

Technologically, consumer behaviors are shifting toward online buying and mobile payments as a result of the growth and popularity of mobile technology and the Internet. By using its application for data analysis and consumer preference tracking, Luckin Coffee makes operational efficiency and targeted marketing tactics possible. Even still, data security is still a major concern in light of this reliance on technology.

Enviromentally, Luckin Coffee aims to benefit from the expanding trend in China’s coffee market toward eco-friendliness and sustainability. Recyclable cup incentives and recycling programs have been used by successful regional competitors such as Manner Coffee and Saturnbird Coffee, indicating that consumers support green measures. Through the implementation of sustainable practices such as resource recycling, renewable energy use, and adoption of circular economy principles, Luckin Coffee can optimize its competitive edge, maintain regulatory compliance, and cultivate a reputation as an environmentally conscious brand (Zhang, 2023).

The accounting fraud event affecting Luckin Coffee had serious legal consequences in China. This incident, which caused regulatory fines and increased scrutiny from Chinese and American authorities, highlighted the significance of legal compliance in business operations. Luckin received a fine of 61 million yuan from Chinese officials for engaging in fraud, in a sign of tougher laws against business misconduct. This case highlighted how Chinese businesses must carefully comply with the law to maintain their operational credibility and win over foreign investors. It also forced a reassessment of the legal responsibility and transparency standards that apply to Chinese corporations, which might result in further modifications to the legal system (Leon, 2024).

In summary, with robust government support and political stability, Luckin Coffee operates in a market that is growing quickly. Technological developments offer efficiency and innovation benefits, but they also present data security challenges. As China encourages the “green transformation,” Luckin should place a high priority on environmental friendliness and sustainability. Following the 2020 financial scandal, compliance with legislation is essential.
请问我有提到关于management style和structure吗