Bringing Starbucks to India GROUP # 5 Karan Bhagatwala : Roll No. 09 Amol Kakde : Roll No. 54 Jyoti Khandre : Roll No. 66 Ashutosh Palande : Roll No. 102 Zeeshan Qureshi : Roll No. 125 Vijay Singh : Roll No. 158
The Indian ‘Coffee Shop’ industry1. Market pegged at nearly Rs 1,440 crore.2. Expected to grow at a compound annual rate of 30 per cent over five years.3. Indian market is underpenetrated.4. A recent report by Technopak Advisors says: – The market grew by 200 stores a year for the past five years, – The market was worth $190 million by 2010/11. – India has over 1,400 cafes and the country has space for up to 2,700 more in five years. – This is tiny, compared to 200,000 cafes in Italy.
Starbucks’ foray into India1. In the coffee house business, a larger footprint means more revenues.2. Starbucks, in a 50:50 joint venture with Tata Global Beverages, called Tata Starbucks Ltd.3. It plans 50 outlets by the year-end - a drop in the ocean for the 17,000- store global chain.4. The group may target 3,000 outlets in India in a few years.5. The Tata Group, of course, is no newcomer to the business, having been a Barista partner earlier.
Competition Analysis Barista Lavazza • Operates 230 outlets in the Indian sub-continent (2000) • Claims to be the pioneer of Indian Café culture Gloria Jean’s Coffee • It has outlets in New Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Pune. (2008) • Aims to open 40 outlets by end of 2012 Costa Coffee • It has outlets in Bengaluru, Mumbai, Delhi, Pune, Jaipur and Agra. (2005) • Opening another 100 stores over next 24 monthsCoffee Bean & Tea Leaf • It has outlets in Delhi, Mumbai, Kolkata and Hyderabad (2008) • Offers its signature ‘Ice Blended’ coffee. Café Coffee Day • Brought in the concept of cafés in India. • Plans to open 250 outlets over the next year. (1996) • Owns 11,500 acres of coffee estates.
SWOT Analysis of Starbucks Strengths Weaknesses Opportunities Threats• Global Brand • High rental or • Favorable • Rise in cost of• Product leasing cost government coffee and Diversification • Intense policies dairy products• Profitable competition • Growing • Rising real organization • Known only consumer estate cost• Sound for coffee product • Political financial • Company market opposition foundation owned stores • Rising affluent• Customer not feasible class loyalty• Favorable forex market
Market Related StrategyObjective: The firm seeks growth by targeting its existing products to new markets / market segments.Starbucks Strategy: To focus on maximum visibility at the time of launch especially in urban metros with an aim to generate desire for the brand in the mind of the potential customers.
Product Related Strategy “DIFFERENTIATION STRATEGY”Objective: Incorporate differentiating features that cause buyers to prefer firm’s product or service over brands of rivalsKey to Success:1. Find ways to differentiate that creates value for buyers and are not easily matched or cheaply copied by rivals.2. Not spending more to achieve differentiation than the price premium that can be charged.
Market Segmentation Lifestyle BasedTypical Customer:“An educated urban resident with the disposable income to spendon fine coffee” 1. Segment A: Daily Consumers of Specialty Coffee. 2. Segment B: Occasional Consumers of Specialty Coffee.
Targeting Strategy Positioning StrategySr. No. Positioning Strategy Definition Advertising Claims Product is highlighted based on 1 Price Vs Quality service features. Manufacturer Value for Money charges high price. Associating a product or service 2 Product Class World Class products in a particular product class
Differentiation Strategy “SERVICE DIFFERENTIATION”1. Only coffee shop in the world where the coffee beans are ground each time a new pot is brewed instead of grinding coffee only in the morning.2. Sensory Branding in terms of the consistent & distinct smell of freshly ground coffee beans when one enters a Starbucks outlet.3. Creating the signature Starbucks experience for Indian customers which is identical to any of its stores abroad.4. Introducing the ‘Starbucks Card’ service in Indian market for customer loyalty & feedback.