Mixue: The Race to Stay Ahead in the Asian Tea Industry

Founded in 2006, Mi Xue Bing Cheng (Mixue) had become widely popular in the Chinese market by June 2021. Mixue achieved very high levels of growth by using a low-price high-volume strategy, a clever marketing campaign, and an unconventional geographic expansion strategy that emphasized secondary markets. However, the domestic market was becoming too saturated. Seeing Mixue gain recognition, new competitors started imitating its business model and developing a fiercely competitive market. Mixue’s chief executive officer, Hongfu Zhang, was wondering how to sustain the company’s high growth rate. Should Mixue continue following its original strategy or adopt a new and different approach that includes international expansion?

This case is suitable for courses in marketing, strategy, and international business. Students are asked to prepare various market and company analyses using established approaches such as Porter’s Five Forces model, Barney’s valuable, rare, inimitable, and organized (VRIO) analysis, and the strengths, weaknesses, opportunities, and threats (SWOT) framework. Students are given the opportunity to work through decisions related to all of these strategic areas. This case is also relevant for gaining a more in-depth understanding of the highly competitive tea and dessert industry in Asia. After completion of this case and assignment questions, students will be able to accomplish the following objectives:<br><br><ul><li>Understand the unique environment of the bubble tea industry in China.</li><li>Assess the trade-off between volume, price, and quality.</li><li>Learn how to develop a sustained competitive advantage in a fierce and saturated market.</li><li>Evaluate possible expansion locations outside China based on economic and socio-political factors.</li></ul>

• secondary markets
• market saturation
• international expansion
• industry analysis
• resource based view