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?