Luckin Coffee Overseas Franchising and S Diagram

Strengths

• Scalable management capabilities developed from 36,000 domestic stores
• Mature digital membership system that is replicable overseas
• Capital strength to support initial overseas investment

Weaknesses

• Relatively limited experience in overseas localized operations
• Need to re-establish the 'low-price' brand perception in overseas markets
• Overseas supply chain localization is still in the early stages

Opportunities

• Rapid growth in coffee consumption in Southeast Asia and the Middle East
• Overseas franchise model can accelerate expansion by leveraging local partner resources
• Luckin's monthly active users exceeded 100 million in Q2, providing spillover potential for brand equity

Threats

• Deep-rooted presence of international brands like Starbucks in overseas markets
• Compliance costs arising from differences in food safety and labor regulations across markets
• Geopolitical and exchange rate volatility affecting the stability of overseas operations