3. 7/24/2013 SIMS BRAND AMBASSADOR 3
INTERNATIONAL & INDIAN BUSINESS SITUATION
INDIA
Excellent growth
rate post 1991
reforms
Large Number of
Educated People
IMPORT DUTIES
follow tariff
system ranging
from 40-60%(raw
materials) to 100%
for finished goods
Large IT Sector
New and Friendly
FDI LAWS
Young population
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BUSINESS OVERVIEW &STRATEGY
• CUSTOMIZED MENU FOR INDIAN CUTOMERS-Coffee without skimmed milk option, preference to
flavors of popular fruits like mango
• Raw materials from locals to support Indian agricultural community and US made equipment to
maintain highest quality
• PRICING is 20% Cheaper than Barista and even though a coffee can be bought at Rs.5 outside, we have
seen from the examples of Barista and CCD that customers are willing to pay more for better
quality, service and environment.
• Promotion through Billboards and Newspaper ads are good enough for target markets like Delhi and
Mumbai.
• Costs:
• Billboards: 1500 rupees (USD 27.27) per 10ft by 15 ft billboard ad.
• Direct Mail: 3000 rupees (USD 55.55) per 2500 prints plus stamps costs to mail directly to the
homes.
• Sales Brochures: 3500 rupees (USD 63.63) per 2500 prints
• Starbucks India will sponsor scholarship contests for the local students and make an annual large
donation of 275, 000 (USD 5000) to the local public school systems. This environmental campaigning
will give Starbucks positive publicity
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REVENUE
The predicted amount of customers per day for the Starbucks Coffee Co is
3,000. If USD $1.20 is amount of money on average spent by each customer then
the projected revenue per day is $3,600. If Starbucks closes for only 3 days in the
year for Diwali (Indian holiday) and Christmas, then the per annum revenue
would be USD $1, 306, 800.
PROFIT
Subtracting the predicted costs from the predicted revenue, we get a per
annum untaxed profit of USD $433, 545. Taxes are 33% for foreign businesses in
India. This would give us the new dollar amount of profit to be USD $289, 027.
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CONCLUSION
Keep in mind that the costs for the following years will reduce and revenues will
increase, giving higher amounts of profit. After the end of the first fiscal year, the
company will determine whether or not it should expand in the country of India.
If the first year proves to be a success, Starbucks Coffee can open over 200
location in the subcontinent of India, taking advantage of their international
partnerships with Sheraton (Starwood) Inn, and Hyatt Inn. Starbucks will also try
to win accounts with local airlines companies, so that they may serve Starbucks
drink on flight. In three years profits are expected to exceed one million dollars
per annum.
