Does Starbucks Corporation (SBUX) Need Asia to Grow? – McDonald’s Corporation (MCD)

Some companies have yet to make a splash in China even though they do have a strong business in Asia.

This brings me to another competitor of Starbucks Corporation (NASDAQ:SBUX) that has yet to make it in China – Dunkin Brands Group . This company’s international business is mostly located in South Korea and Japan in joint ventures. The Asian region accounts for almost 74% of the company’s entire international operations. How is the company doing in these regions compared to its US operations? In 2012, Dunkin’ Donuts U.S net revenue grew by 8% while the international segment by only 1.5%. The U.S operations also have a higher profit margin than the international segment. This means, this company isn’t able to grow faster or have a higher profit margin in the Asian market than in its core U.S operations.

The Foolish bottom line

I have presented three competing companies. All three have a foothold in the Asian market. But these companies present very different performances. The drive of leading companies to Asia is reasonable but doesn’t always lead to higher profit margins or higher growth. Keep in mind that when expanding for a foreign country such as China, uncertainty and risk rise from legal, logistics, cultural and currencies stand point. So growth isn’t the only factor to consider.

The article Does Starbucks Need Asia to Grow? originally appeared on Fool.com and is written by Lior Cohen.

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