Brewing the perfect blend: Starbucks enters India
Despite its global brand, entry into the Indian market had not come easily for Starbucks, a premier roaster, marketer and retailer of specialty coffee that owned the largest coffee chain in the world. With its 300 million strong middle class, India held a huge opportunity for Starbucks, and had been...
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| Main Authors: | , , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2013
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/cases_coll_all/52 https://cmp.smu.edu.sg/case/1881 |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Despite its global brand, entry into the Indian market had not come easily for Starbucks, a premier roaster, marketer and retailer of specialty coffee that owned the largest coffee chain in the world. With its 300 million strong middle class, India held a huge opportunity for Starbucks, and had been on the company’s business plan since 2005. It had however taken the company almost seven years to find the right partner and get permission from the Indian government to start operations. It was only in January 2012, following successful negotiations with the Tata Group, that this became possible. Starbucks entered into a 50:50 joint venture with Tata Global Beverages Limited (TGBL), under which Starbucks would own and operate outlet stores in Mumbai. The initial launch was a resounding success, yet the challenge was far from over. Starbucks’ partner, TGBL, had helped navigate its entry into the Indian market, and also had a presence through the entire production chain - growing, roasting and trading. But could Starbucks overcome the political, economic, social and cultural challenges unique to the Indian market and establish its stamp on this important market? Would it be able to do so without a local partner? This case study can be used to teach the range of factors that large, well-established multi-nationals need to consider while developing a market strategy to enter a developing market. This is also an appropriate case study to use in a class on partnerships. It can be used to explain the various business partnership models - such as joint ventures, franchises, and strategic alliances - along with their advantages and disadvantages. The assessment of strategic fit between the two partners can be used to engage the class in a discussion on finding complementary skill sets and the marriage of corporate cultures. |
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