blog




  • Essay / An Inside Look at Starbucks - 1172

    INTRODUCTIONStarbucks was established in 1971 and is a well-established and successful coffee supplier. Starbucks is always known for its “enriching coffee” experience. In addition to coffee, they offer a selection of Tazo teas, pastries and other snacks like the Panini to please the taste buds. To create an overall coffee experience, Starbucks stores feature engaging music and decor. In the United States, their goal is to create a gathering place where people can talk and work, much more than just a coffee shop. Starbucks is present in more than 17,000 stores around the world. Starbucks entered India in 2012 as a 50/50 joint venture with the Tata Group. This article focuses on the company's strategy for entering the emerging market and how it has addressed the political, economic, social and cultural challenges of this growing market. BACKGROUND Coffee shops were nearing saturation point in the United States and Europe. Starbucks has decided to enter lucrative emerging markets. of India and China. India is a traditional tea drinking country which is proven as 69.9% of the hot beverage industry is dominated by the tea industry. In India, coffee is now an everyday coffee and is becoming a style statement. Due to the influence of Western culture, it is becoming popular among young people as well as young professionals. Going to a coffee shop to socialize and network, this culture is slowly growing in India and hence is an emerging market for companies like Starbucks, where they are promoting the overall coffee experience. In addition to this, due to industrial growth, the purchasing capacity of young people in India has increased over the years and the popularity of this specialty coffee has increased. Currently in India Café Coffee day, Baris...... middle of paper ......sed since 2009. Middle class and upper class willingly spend on cafes and other drinks, which was not the cases in the past decade. Socio-cultural factor As mentioned above, India is a predominantly tea-drinking country. In addition to this, this culture of hanging out with friends chatting over an expensive cup of coffee was introduced to India by Café Coffee Day. They were the first movers and therefore companies like Starbucks, being the later movers, had an advantage because this culture was already introduced in India. Legal factors On January 10, the Indian government increased the ownership limit to 100% for foreign retailers selling a single brand, a move that benefited companies including Starbucks (Passport, Euromonitor 2011). In this case it was a 50% joint venture. Due to these legal factors, companies are ready to invest in the Indian market..