Market Entry Strategies Case Study

Starbucks Coffee Company: The Indian Dilemma

OR

Abstract:

In 2006, the US based Starbucks Coffee Company, with over 11,000 stores in 36 countries was the No. 1 specialty coffee company in the world. Every week over 40 million customers visited Starbucks coffeehouses. After phenomenal success in the US, and revolutionizing specialty coffee culture, Starbucks undertook international expansion and popularized its specialty coffee worldwide. In the 1990s, Starbucks concentrated its expansion efforts mainly in Asia. The initial pages of the case delineate the origin and growth of Starbucks as a company and a super brand and the strategies adopted by it.

In 2002, Starbucks announced that it was planning to enter India. Later it postponed its entry as it had entered China recently and was facing problems in Japan. In 2003, there was news again that Starbucks was reviving its plans to enter India. In 2004, Starbucks officials visited India but according to sources they returned unconvinced as they could not crystallize on an appropriate partner for its entry. In mid 2006, Starbucks announced that they were all set to offer the ‘Starbucks experience’ to Indians in the next 18 months. The case explores India as the next destination for Starbucks and provides an industry analysis of the Indian coffee industry. It attempts at initiating a debate that whether Starbucks should enter India or not. If it should, then its entry strategy, differentiation strategy and long term strategy for India may be identified. The challenges that India may present for Starbucks and how should it cope up with, can also be discussed. The case is targeted at management students and can be taken up in their Strategic and General Management curriculum.

Pedagogical Objectives:

• To analyse Starbucks as a company
• To analyse the Indian coffee industry and India as a potential destination for Starbucks
• To discuss the entry strategies for Starbucks in India
• To discuss the opportunities and challenges that Starbucks could face in India.

Keywords : Starbucks; Howard Schultz; Seattle; Japan; China; India; specialty coffee instant coffee; coffee culture; third place concept; differentiation; spoke and hub strategy; Market Entry Strategies Case Study; word-of-mouth promotions; emerging economy; retail environment; Foreign Direct Investment; industry analysis; beverage market; tea; market entry strategy; differentiation strategy; second mover advantage; entry dilemma; joint venture; competitive scenario; market structure; market development; Starbucks experience; lifestyle marketing

Contents : 
About Starbucks
Howard Schultz and Starbucks
The new Starbucks
Focusing on Asia
Starbucks in Japan
Starbucks in China31
The next destination
Indian Beverage Market
Indian coffee market