Comparison of Different Operation Strategies of Luckin Coffee and Their Impacts on Brand Profitability: From Price Subsidies to Precision Operations

In recent years, China has witnessed a continuously expanding coffee market. As one of the most important brands in China's coffee industry, Luckin Coffee has continued to thrive despite experiencing several setbacks, with its operational strategies undergoing reform following the financial fraud scandal. The shift from the price subsidy strategy in the early stage to the precision operation is thought-provoking. This paper discusses two operation strategies of Luckin Coffee and compares their distinctive characteristics. It is found that while the price subsidy strategy expanded Luckin's market, it also increased its financial pressure. In contrast, the precision operation strategy altered the financial challenges and expanded the consumer base through enhanced quality and big data-driven personalized recommendation, continuously shaping the brand concept of Luckin Coffee. Operation strategies are subject to change in accordance with the company's prevailing operation conditions. In a market with fierce competition and rapid changes, a company can gradually move toward success by maintaining its competitiveness and continuously adapting to the developments of the times.