Starbucks Case Study

SITUATIONAL ANALYSIS

This case first explores the Starbucks’ business strategy from its inception in US to further global expansions, particularly its success in china and then poses a question on having a repeat success in India. From the case, it can be gathered that main idea behind its strategies is to form an emotional attachment with the customers by providing them with a unique customer experience. Its philosophy is to create a concept of “Third place” i.e. a place apart from their home and work where people could just relax and meet friends over a cup of coffee. Starbucks has been focusing on three main aspects for expansion in international market. It always collaborates with the local business partners in order to develop an understanding of the local market conditions. This also helped it build up a healthy relationship with the suppliers. It always keeps in mind to integrate its business with the country’s local culture. Hence, in addition to coffee, it also offer local cuisine including drinks and snacks. It also pays huge attention to ambience and design of the store in order to attract more and more customers. The below sections highlight the unique issues it may face while entering India and also suggest an approach to tackle these.

SWOT ANALYSIS – STARBUCKS INDIA

Strengths

• The Theory of Business applied by Starbucks has been successful in US, China and Europe

• Vertical Integration by setting up a roasting plant in India

• USP of Superior Service and creating an Experience

• Joint Venture with the trusted brand of TATA

• Expertise of TATA finding prime locations and a robust supply chain

Weakness

• Late entry into the Indian market where coffee market has developed in the past few years and hence high competition and low penetration

• Premium pricing cannot be used to target tier II cities

• High operating costs due to high real estate costs in prime locations of India

Opportunities

• Huge population and hence scope for high growth

• Scope for innovation due to vast diversity in India

• Partnership with TATA opens avenues in stores of TATA group like Westside, Croma etc.

Threats

• Whether Indian customers will value the concept of premium service and experience for a premium cost

• Maintaining