How Starbucks Plans Its China Expansion with Internal Talent Development

Starbucks wants to open thousands of stores across China — but right now, it only has 376. Rapid growth like that brings a major hurdle: finding enough skilled retail managers with the right experience. Hiring experienced outsiders isn’t the solution the company wants. Instead, Starbucks is doubling down on internal talent development to fuel its China push.

Starbucks plans to open thousands of locations in China. To support that growth without relying on outside hires, it launched a structured talent development program targeting future retail leaders — beginning with 376 existing stores.

The Challenge: Scaling Without Losing Culture

Starbucks has publicly committed to major investment in the Chinese market. In a Wall Street Journal interview, CEO Howard Schultz stated, “Over time, we will have thousands of stores in China.” That’s a massive leap from the current 376. But along with scaling comes a critical challenge: a shortage of local retail and management talent with the necessary experience. And because Starbucks has a distinct corporate culture, hiring externally isn’t its preferred path forward.

Why Internal Development Is the Strategy

Rather than filling management roles with seasoned outsiders, Starbucks believes investing in its own people builds capability across the board. By improving employee skills, knowledge, and experience internally, the company ensures alignment with its culture and long-term stability. The goal is to cultivate a long-term workforce tied to the company’s future — particularly as it scales in China.

The 2010 Talent Development Project

In early 2010, Starbucks China launched a company-wide initiative to define and develop the talent required to sustain rapid business growth. The focus? Retail operations, where demand for capable leaders was highest. The project aimed to create a structured, sustainable approach to talent growth, with regional managers as a priority.

How They Identified Future Leaders

The first step was nominating and assessing high-potential employees already within Starbucks. This meant determining which staff had the potential to step into the next level of management — and identifying any gaps in their readiness. The company needed a clear view of who could grow into bigger roles, and what skills they still needed to develop.

Partnering with Aon Hewitt

To build the program, Starbucks China partnered with consulting firm Aon Hewitt. As Angel Yu, HR Manager for Greater China at Starbucks, explained: “We trusted their expertise, especially their understanding of market trends, client needs, and talent developments in retail. They had prior experience creating development programs for other retailers, and their team was highly responsive. They listened closely, adapted to our unique needs, and established a strong working chemistry from the start.”

The Assessment Framework

Aon Hewitt began by reviewing global leadership models to identify key competencies. They then interviewed senior leaders to understand the real-world challenges managers face. Based on that input, they developed a capability model covering both cognitive skills and expected behaviours. This model became the foundation for customised assessment scenarios — including two tailored business simulations created specifically for Starbucks’ context and future managerial challenges.

Running the Evaluation Process

With the capability model and simulation tools in place, Aon consultants helped Starbucks train internal evaluators. They advised on selecting qualified assessors, taught proper evaluation techniques, and even guided evaluators in writing individual feedback reports for participants. After assessments were complete, Aon supported follow-up feedback sessions between Starbucks and each participant.

What The Pilot Achieved

The pilot gave Starbucks’ HR team and selected managers hands-on experience with a professional evaluation centre process. As Angel Yu noted: “The most important outcome was establishing our own evaluation centre framework. It created a system to more accurately assess future development opportunities. It also strengthened our ability to evaluate talent internally and foster growth.”

What Comes Next

The project was just the beginning. Angel Yu acknowledged that much work remains. Now that employees’ strengths and weaknesses are clearer, the next phase is creating individual development plans. Starbucks must help managers and employees build capabilities through on-the-job learning, targeted training, and cultural reinforcement. Strengthening the internal growth mindset and equipping team members with the right tools will be critical going forward. This project, Yu emphasised, is just step one in a much larger talent strategy.

Frequently Asked Questions

How many Starbucks stores are currently in China?

As of the time of the project, Starbucks operated 376 stores in China. The long-term goal is to eventually have thousands of locations across the country.

Why doesn’t Starbucks just hire experienced retail managers from outside?

Starbucks prefers to develop talent internally to preserve its unique corporate culture. While hiring experienced managers might seem faster, the company believes building capability within its own workforce leads to better long-term alignment and growth.

What was the purpose of the 2010 talent development project?

The project aimed to create a structured, scalable approach to identifying and developing future retail leaders in China, beginning with high-potential employees and focusing on management roles. It was designed to support the company’s rapid expansion plans.

Which company helped Starbucks design the talent program?

Starbucks partnered with consulting firm Aon Hewitt to design the assessment framework, develop capability models, and create customised business simulations tailored to the company’s retail environment in China.

What kinds of assessments did Starbucks use for leadership potential?

The program included capability evaluations, behavioural interviews, and two customised business scenario simulations. These were designed based on real challenges retail leaders face in Starbucks' China operations.

What happens after employees are assessed?

After assessment, Starbucks works with individuals to create personalised development plans. The next step involves on-the-job training, mentorship, and structured learning opportunities to help close skill gaps and prepare employees for future leadership roles.