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An Inside Look at Starbucks

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INTRODUCTION
Starbucks was established in 1971 and it is an established, successful purveyor of Coffee. Starbucks is always known for its “rewarding coffeehouse” experience. In addition to coffee they offer selection of Tazo teas, pastries and other snack items like Panini to please the taste buds. For creating overall coffee house experience Starbucks stores have an appealing music and décor. Their focus in United States is to create a gathering place where people can chat, sit work much more just than a coffee place. Starbucks has a global presence over 17,000 stores all over the world. Starbucks entered India in 2012 as a joint 50:50 venture with Tata Group. This paper focuses on company’s strategy on entering the emerging market and how they have tackled the political, economic, social and cultural challenges of this growing market.
BACKGROUND
Coffee shops were nearing the saturation point in United States and Europe Starbucks decided to enter the lucrative emerging markets of India and China. India is traditional
tea
drinking
nation which is proven as 69.9 % hot beverages industry is dominated by tea industry. In India coffee is now a day’s coffee is becoming a style statement. Due to influence of western culture it is becoming popular amongst youngsters as well as young professionals. Going to a coffee house for socializing and networking this culture is slowly building up in India and hence it’s an emerging market for companies like Starbucks where they promote the overall coffee house experience. In addition to this due to industrial growth the spending capacity of youth in India has increased over the years and there by the popularity of this specialized coffee shop has increased. Currently in India Café Coffee day, Baris...

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...sed since 2009. The middle class and upper class are willingly spending in coffee shops and other beverages which was not the case in the past decade.
Social-Cultural Factor
As mentioned above India is a predominantly tea drinking nation. In addition to that this culture of going out with friends chatting over an expensive cup of coffee this was introduced to Indian by Café Coffee day. They were the first movers and hence companies like Starbucks being the late movers had an advantage as this culture was already introduced to Indian.
Legal factors
India’s government on January the 10th raised the ownership limit to 100% for foreign
Retailers selling a single brand, a decision benefiting companies including Starbucks
(Passport, Euromonitor 2011). In this case this was a joint 50 % venture. Due to these Legal factors companies are willing to invest in Indian market.