Starbucks: Entry Prospects in India

4774 Words Nov 28th, 2012 20 Pages
STARBUCKS IN INDIA: THE TIME IS JUST RIGHT

4th May 2009

An OLI-PESTLE Analysis
The paper analyses the entry prospects of Starbucks Coffee into India. The analysis is based on the framework provided by the Eclectic Paradigm and the PESTLE analytical structure and shows that in spite of previous setbacks the current conditions in India are highly conducive for the likes of Starbucks to set up shop and be successful.

Bhooshan Parikh Copenhagen Business School Full Time MBA 2008-09

INTRODUCTION India has a population of nearly 1.2 billion people and a majority of this falls into the age bracket of 15-60 years of age, making it one of the youngest countries in the world with a median age of just above 25 years (www.cia.gov).
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This paper is structured around the Eclectic Paradigm (OLI Framework) and incorporates a PESTLE analysis and attempts to bring out the major areas of concern for Starbucks Corporation in order to enter the India market. Although, the FDI regulations and legal requirements have been reformed over the last couple of years and doing business in India is gradually improving, it seems that Starbucks needs to focus its attention more towards the economical and socio-cultural areas rather than the political and legal aspects of the business environment in India. OWNERSHIP SPECIFIC ADVANTAGES The Starbucks brand has become almost synonymous with coffee all around the world and the same is the situation in India even though India does not have a single Starbucks outlet. Having opened its first store in 1971, Starbucks has been highly successful in starting a cult following that has put the Starbucks brand at a level higher than just a coffee shop. The passionate staff and their unique blends of the best coffee beans have propelled Starbucks as a way of life in many parts of the world. The vision created by Howard Schultz, the President and CEO of Starbucks, has resulted in over 16,000 stores adding almost 1500 stores in the last one year (Starbucks Corporation, Annual Report, 2008). The company

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