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A Case Study 
STARBUCKS
 About Starbucks 
JV in India 
PEST Analysis 
SWOT 
Business Model 
Strategy 
People Connect 
Roadmap and Challeng...
STARBUCKS COFFEE 
 American Global Coffee Company and Coffeehouse Chain 
•Based in Seattle, Washington 
•Founded in 1971 ...
New Delhi 
Gurgaon 
Mumbai 
Pune 
Bengaluru 
Chennai 
Hyderabad 
No. of Outlets 
15 
4 
23 
6 
10 
1 
3 
0 
5 
10 
15 
20 ...
BUSINESS MODEL
STRATEGY : PEST ANALYSIS 
•Starbucks entered in UPA reign. 
•Cap on FDI in multi-brand retail increased to 100% in 2013. 
...
CONSUMER SPENDING 
DISPOSABLE INCOME 
ULTRA HIGH NET INCOME HOUEHOLDS
STRATEGY : PEST ANALYSIS 
•Disposable income on the rise 
•Western Culture sweeping in 
•Market Penetration of coffee has ...
OPERATIONS 
COFFEE 
•TATA Global Beverages (HQ: Coorg, Bangalore, 18 units in South India) 
TEA 
•India CHAI project (Assa...
Strengths 
•High quality of products 
•Premium HR practices contributes to employee morale 
•Tata alliance (Partner and Su...
price 
Brand 
Quality 
Convenience 
location 
Variety 
Reputation 
Customization 
Online user 
low 
High 
Competitors Comp...
PEOPLE CONNECT 
. 
STORE AMBIENCE
PEOPLE CONNECT 
ADAPTATION OF MENU 
LOCALIZED MERCHANDISE 
Chai Tea Latte 
Panini 
Murg Tikka 
Konkani Twist Croissant 
Ch...
PEOPLE CONNECT 
CHAI 
Community Health and Advancement Initiative 
A collaboration between the Starbucks Foundation, Tazo®...
Land 
•Real estate acquisition is going to be very challenging, but again having Tata's help will be a big advantage for S...
•http://www.slideshare.net/ranganathpandit/tata-starbucks- ltd-a-strategic-analysis-15117792 
•http://en.wikipedia.org/wik...
TATA Starbucks
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TATA Starbucks

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Starbuck's venture in India : A Brief Overview

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TATA Starbucks

  1. 1. A Case Study STARBUCKS
  2. 2.  About Starbucks JV in India PEST Analysis SWOT Business Model Strategy People Connect Roadmap and Challenges Recommendations
  3. 3. STARBUCKS COFFEE  American Global Coffee Company and Coffeehouse Chain •Based in Seattle, Washington •Founded in 1971 •CEO : Howard Schultz Coffee Smoothies Tea Frappucino Pastries and Other Snacks
  4. 4. New Delhi Gurgaon Mumbai Pune Bengaluru Chennai Hyderabad No. of Outlets 15 4 23 6 10 1 3 0 5 10 15 20 25 No. of Outlets=61 JOINT VENTURE WITH TATA 50/50 joint venture between Starbucks Coffee and Tata Global Beverages : MoU Leveraging the global in-home expertise of Tata Global Beverages and the global out-of-home expertise of Starbucks Share common values of responsible business ethics and a commitment to community Quick Service Restaurant category
  5. 5. BUSINESS MODEL
  6. 6. STRATEGY : PEST ANALYSIS •Starbucks entered in UPA reign. •Cap on FDI in multi-brand retail increased to 100% in 2013. •BJP has austerity towards FDI in retail, but alliance with Tata ensures security •Forward approach towards labourers and employment welcomes Starbucks. •India has a population of 1.71 billion •a GDP growth rate of 5.6 % (approx) in 2014 •States with highest GDP are Maharashtra, Uttar Pradesh, Andhra Pradesh, Tamil Nadu and Gujarat •% of India’s industrial growth is attributed to specific regions; mainly in Gujarat, Maharashtra, Haryana, Karnataka and Tamil Nadu. POLITICAL ECONOMIC
  7. 7. CONSUMER SPENDING DISPOSABLE INCOME ULTRA HIGH NET INCOME HOUEHOLDS
  8. 8. STRATEGY : PEST ANALYSIS •Disposable income on the rise •Western Culture sweeping in •Market Penetration of coffee has increased from 59% in 2003 to 61% in recent times •80% customers : 18-45 years •High income band on the rise •Cheap Labour and 550 m unemployed •Eat Out culture among Youth: 21% market instant coffee •80% of India’s coffee is exported. •Agricultural technology needs attention. •Coffee brewing technology of Tata is at par with Starbucks practices. SOCIO-CULTURAL TECHNOLOGY
  9. 9. OPERATIONS COFFEE •TATA Global Beverages (HQ: Coorg, Bangalore, 18 units in South India) TEA •India CHAI project (Assam, North East) MILK (Only Pure Cow Milk) •Two suppliers in North and West, and now have developed one in south as well. SYRUP : US OTHER FOOD ITEMS: Locally Sourced 1000 + Employees •ETHICAL SOURCING •STRINGENT QUALITY SUPPLY CHAIN
  10. 10. Strengths •High quality of products •Premium HR practices contributes to employee morale •Tata alliance (Partner and Supplier) •Strategic relationships with suppliers •Sustainable practices and advanced agronomy solutions Weaknesses •Tall management structure •High pricing •Coffee Dominant Business •Limited Locations •Rented Land •Positioning •Bargaining Power of Suppliers Opportunities •India is a huge market •Customize Products • Diversify •Rise in economy and disposable income •Target Population rise •Increase in Coffee Culture Threats •Frequent changes in the market trends •Better value offered by local cafes •MoU with Tata •Awareness •Tea Culture SWOT
  11. 11. price Brand Quality Convenience location Variety Reputation Customization Online user low High Competitors Comparison
  12. 12. PEOPLE CONNECT . STORE AMBIENCE
  13. 13. PEOPLE CONNECT ADAPTATION OF MENU LOCALIZED MERCHANDISE Chai Tea Latte Panini Murg Tikka Konkani Twist Croissant Chatpata Paratha Wrap Chicken Reshmi Tikka Roll Tamarind Peanut Chicken Calzone Elaichi Mawa A 'pour-over set' single brew serving merchandise, typical of the filter coffee culture down south India themed mugs and tumblers
  14. 14. PEOPLE CONNECT CHAI Community Health and Advancement Initiative A collaboration between the Starbucks Foundation, Tazo® Tea, Mercy Corps Starbucks and tea have allies contributed US$2.6 million to these effort . Helped more than 12000 villages. More than 60% of Indian tea comes from Northeast India ,where approximately 3 million people work on tea estates Hygiene, Infrastructure, Vocational Trainings, Scholarships, Education, Women Empowerment SWASTHA A school for children with special needs (in partnership with the Coorg Foundation ) in Karnataka CSR
  15. 15. Land •Real estate acquisition is going to be very challenging, but again having Tata's help will be a big advantage for Starbucks Supply Chain •Developing the suppliers Pricing •Starbucks has been controlling its price, which is also affecting its profitability. Getting new sources might lower the cost Expansion •Starbucks can open stores in Tier II cities , educational institutes, with a subsidised brand. (e.g. Coffee Day Express) Diversify •Building up on the tea as it is a preferred drink for majority of Indians RECOMMENDATIONS
  16. 16. •http://www.slideshare.net/ranganathpandit/tata-starbucks- ltd-a-strategic-analysis-15117792 •http://en.wikipedia.org/wiki/Tata_Starbucks •http://www.authorstream.com/Presentation/anuj.jimj- 1317719-strategic-alliance-of-starbucks-and-tata-coffee/ • http://www.slideshare.net/ranganathpandit/tata-starbucks- ltd-a-strategic-analysis-15117792 • http://www.slideshare.net/arjunsingh023/tata-starbucks- india • http://www.tradingeconomics.com/india/gdp-growth • http://en.wikipedia.org/wiki/Demographics_of_India •* http://zeenews.india.com/business/slideshow/the- business-of-coffee-chains-in-india_104.html/6 • http://blogs.reuters.com/india/2013/04/04/people-say-we- shouldve-priced-our-coffee-higher-tata-starbucks-ceo/ • http://www.magnolia2mumbai.com/a-tata-alliance- starbucks-foreign-direct-investment-in-india/ REFERENCES

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