Kofi or Coffee – Starbucks Enters the Indian Market
Avani Davda, the CEO of Tata-Starbucks, had to make major decisions soon on product positioning and building a strong consumer base. Tata-Starbucks was the partnership between two food industry giants: Starbucks and Tata Global Beverages. Tata Global Beverages, based in India, was to function as supplier. Starbucks, with headquarters in the United States, would leverage its brand name and contribute experience of the retail market. The clock had started for Avani. The Indian market presented both perils and promise, with great deal of uncertainty on political, social, and economic fronts. The failure of international coffee chains to gain local traction was a red flag. On the other hand, India’s population trended young, with a robust consumer group of westernized professionals. The biggest challenges would be pricing, location and entrenched consumption habits. A local coffee chain was a strong competitor, vertically integrated and diversified. Would Avani be able to rise to the challenge and lead this iconic co-branding attempt to success and profitability?
- Analyze the decision of a company (Starbucks) to enter a foreign market by identifying SWOT factors.
- Assess a company’s (Starbucks) potential for success in a specific foreign environment (India) using situation analysis.
- Appraise a joint venture business partnership (Tata-Starbucks) decision.
- Discuss the strengths and weaknesses of a joint venture (Tata-Starbucks) relative to those of its main rival (CCD) by performing a competitor analysis.
- Evaluate the impact of product, pricing and location strategic decisions on long-term performance and sustainability in the context of specialty products.