Starbucks Discussion

Starbucks Discussion

1. Why is India an attractive market for Starbucks?

India is an attractive market due to its growing interest in social sittings over coffee. Although it is mainly a tea-drinking nation, the consumption of coffee had seen more than 80% increases over the past years. The country has also experienced a population explosion of young people. With the right strategy, this would be an important niche to promote their product and increase their competitive advantage. Starbucks figured they had the ability and brand presence to take advantage of the increasingly favorable conditions towards coffee consumption in India.

2. What is Starbucks’s international strategy? Is it more of adaptation or standardization?

Adaptation strategy involves changing the product design to suit the preferences and requirements of the new market. In standardization, a client finds the same product, wherever it is available internationally, which means a blanket marketing strategy is also used (Akgün et al., 2014). Starbucks’ international strategy is more of adaptation, as it mainly seeks market niches in the new location to take advantage of. Although there may be some similarities in strategies used in some countries, Starbucks’ marketing strategy makes use of market analysis to identify exploitable conditions.

3. Why did Starbucks enter India with a joint venture?

The first attempt at entering the Indian market was met with complications arising from the Indian government and the FDA. The first reason for the partnership was to overcome the challenges involved in introducing a foreign business into India. The partnership with one of India’s largest beverage production company gave Starbucks the brand promotion advantage it needed to enter the market. The partnership also offered Starbucks a competitive advantage over the leading coffee brand CCD, which incidentally used Starbucks US’s flooding marketing strategy to conquer the Indian market.

Reference

Akgün, A. E., Keskin, H., & Ayar, H. (2014). Standardization and Adaptation of International Marketing Mix Activities: A Case Study. Procedia – Social and Behavioral Sciences, 150, 609–618. doi: 10.1016/j.sbspro.2014.09.080

Hi Emily,

I like your analysis of the first question. You gave statistical information that shed light on what attracted Starbucks to the Indian market. However, the second answer is a bit vague on whether Starbucks uses adaptation or standardization in its international strategy. I also hoped for an explanation of why you made the choice. Lastly, from the case study, Tata Group’s partnership with Starbucks involved Tata Global Beverages, which is a beverage company like Starbucks, and, therefore, more related.