Starbucks: Entry Prospects in India

Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.

Starbucks is one of the leaders in coffee industry. Starbucks has entered into many new markets and today it has more than 16,000 outlets across the globe (Johnson, Scholes and Whittington 2011). Due to unlimited business opportunities, Starbucks Corp has set strategies to enter India as it is next major hub for development in near future. Previously Starbucks has gained wide success in China and Japan due to high consumption of coffee and tea. Since its inception, Starbucks has tapped the major markets across the world, India was left untapped. In India, Starbucks has setup alliances with TATA Global Beverages which is a unit of TATA Group of Companies. Starbucks along with TATA has started with an investment of $80 million and plans to open 50 coffee shops in a year. Currently few coffee shops has been setup by Starbucks, however in near future, it is expected that the company will achieve its target in capturing Indian market (Lamb2009). Thus, besides sourcing coffee beans from TATA, Starbucks can now explore more Asian markets (Hitt, Ireland and Hoskisson 2012).

In this paper, I will talk about Starbucks Company. I will define the influence of the vision, and mission of the company and primary stakeholders along with their overall success. An examination will be conducted to categorize five forces of struggle and their effect on the corporation. I will carry out a SWOT analysis to determine the opportunities, threats, strengths, and weaknesses. Founded on the SWOT analysis, a technique of opportunities and advantages will be exploited while threats and weaknesses will be diminished. Several types and levels of techniques will be talked over to operate the profitability and competitiveness. I will outline a plan of communication to make approaches known to all investors. Two corporate authorities will be designated to assess the efficiency of the regulating managers. I will also assess the effectiveness of management within the Company and come up with sanctions for upgrading.

For many multinational companies, they have begun global expansion. The Asia Pacific region is a potential market to get more profits. Starbucks is one of the international companies, who expand the market in the AP. This report will introduce Starbucks firstly, and then articulate the strategies of the company and use SWOT to analyze the internal and external environments. Some recommendations for Starbucks managers are given according these analyses.

Starbucks has been very successful in Turkey despite the economic problems the company was experiencing in the U.S. during 2007-2008. The fact that Starbucks’ Turkey C.E.O. Can Ikinci is Turkish and that he had studied in the U.S. and worked in London played an important role in the company’s success in this country. Mr. Ikinci was familiar with the culture, the market environment and with the skills he acquired overseas, he was able to build a strategy based on the adaptation of the product to local consumers as it included Turkish coffee. This demonstrates how the company did their research as coffee is an important component of the Turkish culture. The marketing strategy shows that Starbucks was thinking about the local patrons and they also brought the U.S. standard products to Turkey, which are some of the growth drivers, just like Gloria Jeans did with their coffee products.

companies market their brands in the United States as well as internationally and are very successful at it. In order to be successful in other countries both Caribou Coffee and Starbucks have learned that they need to change their menus, advertisement and sometimes layout of their stores to appeal to locals abroad. For example, Starbucks had success in India by partnering with a local business called TATA Global Beverages. Starbucks used them to gain knowledge sharing networks about Indian real estate as well as specifics on culture and local preferences. Starbucks strives to have the same in store format throughout India, this helps to maintain the unique selling point of the customer experience (Starbucks). They also have slow and

Figure 2: Competitive Position of Starbucks in UK based on Customer Loyalty (Source: Market Force Information (2015).

Starbucks’s LinkedIn page at its first appearance seems to be a flawlessly designed hiring hub for buoyant candidates. On second appearance you’ll realize that the company is looking towards educating its current and soon to be employees. In addition to current job postings running from the barista to the retail to corporate, the account posts insider accounts to what it is like to work at Starbucks from an employee perspective. Some recent articles on Starbucks in the news and various magazines are also available on the page for those applicants who like to go through the company’s details. LinkedIn is undoubtedly the one stop shop for such applicants.

Market expansion. A couple years ago Starbucks found themselves almost reaching the maximum capacity of coffee shops in the United States. In this instance, it is time for companies like Starbucks to start look globally if they wish to keep continually expanding. “In 2012, the company set up its first store in India.” (Rajasekaran, 2015). Originally it was found that only upper class residents of India would purchase coffee and that many low income civilians considered coffee a luxury. Starbucks understood that they were advancing into a predominantly tea drinking country. However, it is believe that the coffee market will have a considerable increase in India in the years to come and that the coffee is slowly becoming a more predominant

When entering a global market, it can be expected to overcome both controllable and uncontrollable elements. The Starbucks organization is no exception to overcome these elements when entering the global market. According to text (2011) controllable elements are attributes such as firms characteristics, type of product, pricing of product, the amount of research conducted, promotions and the channels of distribution. Uncontrollable elements effecting Starbucks are competitive structures, domestic and international, varying levels of technology and cultural differences. Starbucks encountered revised incomes with the economic downturns of recent and it quickly realized that its gourmet product was among the first

Starbucks corporation was found in 1971, in the United States, and it is one of current the most popular coffee store, roaster, brand proprietor in the world. Starbucks has guarantee to offer customer the highest quality coffee and services, as a result to let Starbucks become a trusted and comfortable zone besides people’ workplace and house. Starbucks has set more than 270 branch retailers in mainland China, since January in 1999, when the first store was founded in Beijing. During the developing period of Starbucks in China, it is responsible for the education communities, environment protection as well as other social communities. With the aesthetic economy development, enterprise can not only rely on the single quality to conduct marketing. Aesthetic perception combined with the brand development has obviously become the consumption trend. PESTLE is the abbreviation of Political, Economic, Social, Technological, Legal and Environmental. PESTLE analysis is a marketing concept that is used as a fundamental tool to measure the environment in which companies are operating or are going to launch a new brand etc. It has an

1. What factors in the global environment provide opportunities or threats for Starbucks? How do Starbuck’s strengths and weaknesses match up to its opportunities and threats?

More than 50% population of India is under the age of 25, 65% under the age of 35. It is anticipated that, in 2020, 29 years will be an average age of an Indian. Indians are famous to be food lovers and since large population consist of

With 29% population falling in the below 14 years age group and 88% below 54 years age group [ Source: http://censusindia.gov.in/], India is one of the most prominent markets with future potential, especially for its young

It is expected that by 2021, India’s projected population of 1.3 billion will constitute 64.2% of people in between the age group of 15 and 59.