Comparative Study on the Cost Composition of Franchise Coffee in Korea-China

This paper examined the cost structure of Korea-China coffee market. China has the largest potential demand for coffee and younger generations are turning from tea to coffee culture. A literature review and a case study used to examine researches by studying the characteristics of Korea-China coffee market and the Starbucks. The main aspect of coffee cost structure in Korea-China is that expenditure ratio of rent and labor cost are the most important factor of profit in coffee cost composition. Newly coffee market entry companies should provide store location, quality, interior, and price through commercial analysis of the area where the store will be located, what Starbucks has done. There is no solution for the rent cost in the central area, but we recommend the use of robot barista as a solution to the labor cost burden. Coffee value is based on the quality, atmosphere, and brand of coffee, but it is needed to sell coffee and culture in a highly competitive place.