Question

Case 23 - Starbucks

Introduction

Starbucks has had varying degrees of success as it expanded into international markets. This case chronicles their experience, as they expanded into India.

.      Analyze “Tata Starbucks’” general and industry environments and identify the opportunities and Threats that it faces.

Answer 1

Opportunities for Tata Starbucks -

1) Increasing spending power of Indians bring more business opportunities.

2) Young population is growing and that young population is more towards coffee chains and is known for changing usage of coffee. They drink coffee for recreation. Out of home drinking culture is growing among this sub population.

3) Skilled manpower is availabel here at very cheap cost.

4) Favorable infrasrtucture.

Threats and Challenges of Tata Starbucks -

1) Generally, indian prefers tea over coffee. Although the industry of coffee is growing but it is seen as stagnated market because of general preference of bewerages drinkers in India.

2) Starbucks faces strong competition directly from other coffee suppliers that have leave imprint on the habits and minds of Coffee Indian lovers. When asked for coffee brand, an Indian instantly would reply with Nescafe or Bru. When asked for coffee chain they mosty repsond with CCD.

3) HIgh calorie and fat enriched coffee of Starbucks have also faced backlashes from Indian sub markets.

4) Starbucks provide coffee experience to its dirnkers. However in India usage of coffee is not for recreation rather the purpose and way of usage is completely different from west. Starbucks need to adapt accordingly in India.

5) Starbucks operate in high class market which makes it earn very less profit as most of the coffee drinkers come from other classes.

6) There are other foreign exchange and political risks .