Starbucks’ Entry into Tea-Drinking India
The IUP Journal of Brand Management, Vol. XII, No. 3, September 2015, pp. 45-58
Posted: 9 Dec 2015
Date Written: December 9, 2015
Abstract
Starbucks is the world’s largest coffeehouse company with a presence in 65 countries around the globe. As coffee shops were nearing saturation in the US and Europe, Starbucks identified the potential for expanding in emerging markets like China and India. Though China is mainly a tea-drinking nation, Starbucks won over this market with its localization and customization strategies. Starbucks believed that India provides a good business opportunity, given the size of its economy, rising spending power of the people, and the growth of café culture. In 2012, the company set up its first store in India. Initially, Starbucks’ stores received good response, but then faced challenges such as competition from organized and unorganized coffee(and tea) shops, high pricing of its products, getting the right store location and talent pool. The present case aims to analyze the challenges and opportunities that Starbucks face in the Indian market, and the marketing strategies that it should follow in the Indian market. Analysis suggests that Starbucks should adapt to the peculiarities of the Indian market. ‘Glocalization’ strategy can be adopted, which would use the successful Starbucks’ strategy used around the world, at the same time taking into account the changes required to suit the Indian context.
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