This document provides an overview of Starbucks' global expansion and operations in India and China. It discusses how Starbucks entered India through a joint venture with Tata in 2012, adopting a different model than other countries. Key differences in the Indian and Chinese markets are highlighted, such as price sensitivity and food preferences in India. The document performs a SWOT analysis of Starbucks and compares its strategy and market positioning to competitor Cafe Coffee Day in India. It concludes with recommendations for Starbucks' future growth in India.

1. TECHKRITI’20 –Best Manager
Case Analysis- Coffee Wars in India-Starbucks
TEAM MAGNUS

2. An Overview
2012
1996
1999
Starbucks and Tata Global
Beverages announced 50-50
joint venture and Tata
Starbucks opened its first
store in India.
1971
Starbucks started its
business selling coffee
beans, tea and spices in
Seattle Starbucks opened its first
international store in Japan
Starbucks entered China
with three different firms
in northern, eastern and
southern China
Followed ‘One city at a
time policy’ and expanded
slowly across USA
By 1996, Starbucks projected
itself as most recognized
specialty coffee brand, riding
on these unique business
practices.
Instead of advertising Starbucks
depended on ‘Word of mouth’ to
attract customers, relying on its
superior product quality &
customer service

3. Global Reach-Analysis
India China
Japan
 TATA Starbucks, joined venture between TATA &
Starbucks , to own & operate Starbucks cafe across
India
 Opened first store in India in 2012, in South Mumbai.
 Different operating model then Starbucks from other
countries, where it generally collaborates with smaller
partners & later acquires them
 Starting with Japan, it ventured into China in 1999, in
partnership with three different local firms in
Northern, Easter & Southern region of China.
 By 2014, it expected china to become its second
largest market
 Starbucks Opened its first international store in Japan
in 1996.
 Entered in joint venture with Sazaby, a national food,
apparel & lifestyle retailer.

4. Marketing Strategy
PRODUCT
PROMOTION
PRICE
PLACE
PROCESS
PEOPLE
Customized Coffee (The way
you want)
Higher than others
Accessible and available
Attractive Store outlook and
ambience, uniform sign
boards
Quick service, customized
cups, feedback from
customers
Social, positive attitude,
active, skilled staffs
Social media, Free Samples,
Credit card discounts
Marketing
Mix- 7 Ps
PHYSICAL

5. SWOT Analysis
Strength
Opportunity
Weakness
Threat
 Strong brand image
 Extensive global supply chain
 Moderate diversification through subsidiaries
 Adaptability with local culture
 Friendly store design.
 High price points
 Generalized standards for most products
 Imitability of products
 Expansion in developing markets
 Business diversification
 Partnerships or alliances with other firms
 Rise in target population due to rapid
urbanization
 Competition involving low-cost coffee sellers
 Imitation of brand in market like China
 Independent coffeehouse movements
 Fickle customer loyalty/frequent changes in
market trend
Threat
Strength

6. India-China Cultural Differences
Key Differences Capitalizing Differences
 In India, the consumers are very discerning and their
expectations are high
 The service industry in India does not have a positive
reputation.
 Price sensitivity of customers in India is high compared to China
 Competitors presence in India before Starbucks entered (CCD &
other chains), unlike China where starbucks proved to be the
pioneer
 Starkly different food habits and preferences.
 Less number of metropolitan cities compared to China
 Collaboration with TATA, known for its service-procuring in
services & location of retail space
 Unlike China, where it went with three small local players, in
India, selected TATA, which had better outreach across India &
understood local cultures better.
 Catering to local tastes: Offered Tea & beverages in china,
Tandoori chicken in India
 Delivers fresh supply to every store, 7 days a week.
 Proper training provided to staffs.
 To provide better services, staffs were trained to build personal
connections with customers.
 English speaking culture of India helped Starbucks.

7. Starbucks Vs CCD
 Starbucks is entering in Indian market, which already has major competitors, CCD leading the way among
them.
 The target segment of Starbucks & CCD are completely different.
 Starbucks target premium customers, in high price range and are mostly expanding in premium locations.
 CCD works in affordable price range, targeting middle class consumers & youths.

8. Way Ahead-India
 It can go for extensive marketing instead of relying on ‘word of mouth’.
 Differentiate itself from CCD/other chains in terms of status symbol.
 Indianization of food: Studying and developing variants suited to Indian flavors
 Association with Indian emotion: Associating with sports such as Cricket, with
festivals can prove to be great way to reach out to customers.
 Utilize the association with TATA as they have deeper reach and trust among Indian
masses.
 Can open stores in all TATA brands like (Westside) and leverage their customers
base.
 Segment targeted by Starbucks is very small and the there is a need to tap into the
middle class segment, which is already crowded by players like CCD & Barista.
However, Starbucks can’t lower its prices to capture this section as it will hamper
brand conscious upper class. Hence, it can enter with some alternate brand under
the same umbrella.

9. Recommendations
 Real Estate Acquisition is going to be very challenging, but again having Tata’s help
will be a big advantage for Starbucks
 Developing the suppliers.
 Starbucks has been controlling the price, which is affecting its profitability. Getting
new resources might lower the cost.
 Starbucks can open stores in Tier-II cities, educational institutes, with a subsidiary
brand.
 Building up on Tea as it is most preferred beverage in India.