TATA STARBUCKS: HOW TO BREW A SUSTAINABLE BLEND FOR INDIA INSTRUCTOR'S NOTES

Starbucks entered the Indian market in October 2012 by forming a 50:50 joint venture with the Tata Group. The Indian Café market offered a lot of potential for the new Tata Starbucks alliance. While India was a nation known for its tea drinkers, sipping coffee and socializing at coffee shops was bec...

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Bibliographic Details
Published in:Journal of the International Academy for Case Studies 2015-05, Vol.21 (4), p.43
Main Authors: Das, Dev, Eisner, Alan B, Korn, Helaine J
Format: Article
Language:English
Subjects:
Coffee
Coffeehouses
Competition
Competitive advantage
Diversification
Joint ventures
Product lines
Shareholder meetings
Strategic management
Students
Studies
Success
SWOT analysis
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Summary:Starbucks entered the Indian market in October 2012 by forming a 50:50 joint venture with the Tata Group. The Indian Café market offered a lot of potential for the new Tata Starbucks alliance. While India was a nation known for its tea drinkers, sipping coffee and socializing at coffee shops was becoming increasingly popular. Domestic consumption of coffee had risen up 80% in the past decade. The joint venture appeared to be at the crossroads of an important strategic decision. It could either revert to a plan to grow its store count aggressively much like it did in the US. It is possible that this was the original intent. After all, the initial launch pricing had been set to be competitive with Café Coffee Day's (CCD) pricing (coffee drinks available for as low as Rs 100). Alternately, it could choose to embrace a premium-priced, niche approach similar to the one it had used successfully in other Asian countries like Japan and China. The premium offering would then cater to an older, business elite with higher spending power. This would result in less rapid growth with a cherry-picked list of high profile, business-friendly locations that could also allow it to build a premium brand with premium pricing. Would Starbucks and Tata under Davda's leadership finally be able to crack the code for sustained success in the competitive and complex Indian market? While Davda appeared proud of what the alliance had achieved at the 2014 Starbucks annual shareholders meeting, some critical strategic choices would need to be made to ensure the long term success of Starbucks in India.
ISSN:1078-4950
1532-5822