Tata Starbucks’ Expansion to India: Case Study

In 2012, American company Starbucks and Indian Tata Global Beverages began their joint venture in the Indian coffee market. The companies’ alliance was successful, and Tata Starbucks became a profitable business by 2019. However, the company is still far from being financially stable in the Indian market and is exploring further improvement opportunities. This paper analyzes aspects that led to the company’s past success and its actions and external factors that caused challenges. It examines issues from the CEO’s perspective and suggests how Tata Starbucks could improve in the future.

Factors that Enabled the Company to Deliver Strong Performance in the Past

Starbucks is a globally famous company with an exceptional reputation. It is a responsible employer providing its workers with healthcare coverage and other benefits. Apart from excellent working conditions, Starbucks is recognized for hiring refugees and buying ethically-produced coffee beans only. Therefore, the company’s name and reputation are one of the primary reasons for its success in India as people recognize Starbucks’ achievements, bringing loyal customers worldwide. Another reason for the company’s strong performance is its choice of the international expansion strategy. The company chose a multi-domestic strategy characterized by “customizing products and marketing strategies to specific national conditions” (Jones & George, 2022, p. 233). Tata Starbucks customized its menu to local demands and culture. Indian population prefers drinking tea over coffee, so the company introduced “18 diverse varieties of tea to serve the Indian market” (Dess et al., 2021, p. 114). They also found that their prices are above the local average coffee prices, and citizens are not willing to pay more. Therefore, the company focused on serving clients with above-average income, selecting locations in premium places visited by tourists and wealthy, westernized part of the population.

Important Issues Confronting the Company

However, Tata Starbucks faces external challenges due to high competition and the consequences of its wrong internal actions. Indians are a tea-drinking nation as “for every cup of coffee, an Indian drinks 30 cups of tea” (Dess et al., 2021, p.120). Local tea is also cheaper than Starbucks coffee and citizens are much more willing to buy tea, preventing Starbucks coffee from bringing expected revenues. The company overlooked or did not consider local preferences before coming to the region and is currently facing a challenge due to this internal action. Meanwhile, the main external threats are such competitors as Chai point or MacDonalds. Both places offer beverages for a lesser price than Tata Starbucks and have the relatively same quality, which is more appealing to the customers.

Actions Addressing Tata Starbucks’ Issues

As a company CEO, I would suggest improving advertising and opening more branches in places popular among travelers and the wealthier part of the population. Currently, Tata Starbucks target middle-aged citizens, so they could invest in advertising their coffee to teenagers and young adults by using popular platforms like TikTok or Instagram. Advertising beverages to the younger population would attract more customers and allow the company to expand. However, there is a risk that younger people will not be able to afford Starbucks coffee, and money spent on advertising is wasted. Opening more outlets in premium places would allow the company to get more clients from its target audience. Tata Starbucks can open new branches in airports as many tourists and wealthy citizens visit it. The company has already announced its plan to open 40-50 more outlets (Roy & Kalra, 2021). The potential risk of this action is that the company overestimates the need for new branches, and some do not attract enough customers.

Tata Starbucks is a promising company that can continue its expansion in the future. The company was successful due to its brand name, premium locations, and Indian-specific strategy. The company is facing challenges associated with high competition and local preferences. However, these issues can be addressed by improved advertising and opening more outlets. Tata Starbucks has much potential and can succeed in the Indian market in the following years.

Dess, G. G., McNamara, G., Eisner, A. B., Lee, S.-H., & Sauerwald, S. (2021). Strategic management: Text & Cases (10th ed.). McGraw-Hill Education.

Jones, G. R., & George, J. M. (2022). Contemporary Management (12th ed.). McGraw-Hill Education.

Roy, A., & Kalra, A. (2021). Starbucks Eyes Faster India expansion with new store formats . Web.

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School of Management

Tata starbucks: how to brew a sustainable blend for india.

Dev Das , Pace University Alan B. Eisner , Pace University Follow Helaine J. Korn , Baruch College

Document Type

This case is primarily intended for use in the corporate strategy section of a business policy or competitive strategy course. It can be used as an overview of the many decisions and actions that an organization has to undertake to sustain a competitive advantage. This case can also be used to augment discussions of strategic analysis, specifically both internal and external environmental analysis and strategic formulation. The case is rich enough for advanced and graduate students, and has been developed in a manner that will allow students to diagnose the root(s) of the company’s issue(s) as detailed in the case, and then form opinions and suggestions for any strategy that the company should pursue. In doing this, students should consider the activities, history, and goals of the company as presented. It would be effective at the business strategy level, especially, to discuss the implications of industry life cycles, and at the corporate strategy level to discuss implications of diversification. The case also lends itself to discussions of strategic implementation and the effect of leadership on innovation, especially when trying to maintain a mature brand.

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Journal of the International Academy for Case Studies

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business strategy, competitiveness, competitive advantage, Starbucks, Tata

Repository Citation

Das, Dev; Eisner, Alan B.; and Korn, Helaine J., "Tata starbucks: How to brew a sustainable blend for India" (2015). School of Management . 126. https://commons.clarku.edu/faculty_school_of_management/126

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The Business Rule

Case Study Of Starbucks: How Starbucks Became The Coffee King?

Supti Nandi

February 21, 2024

Case Study of Starbucks

Starbucks, a brand that became synonymous with coffee has created a sensation in the world with its coffeehouse culture. Have you wondered how? Well, to answer this question we will delve into the case study of Starbucks.

Case Study of Starbucks

Stay tuned!

(A) Starbucks: A Brief Overview

Let’s buckle up for a Starbucks journey! Founded back in 1971, this coffee giant now reigns supreme as the world’s largest coffeehouse chain, with its home base in the city of Seattle, Washington.

Before diving deeper into the Starbucks case study, let’s have a look at the company’s profile-

Fast forward to November 2022, and you’ve got Starbucks waving its coffee wand in a staggering 35,711 stores across 80 countries. And when you zoom in on the U.S., you’re looking at a whopping 15,873 Starbucks hotspots. 

Here’s the scoop – over 8,900 are Starbucks-run, and the rest are running under licensed partnerships.

Now, let’s talk coffee vibes. Starbucks is the unsung hero of the second wave of coffee culture, dishing out an array of coffee delights. Think hot espresso, chill Frappuccinos, and a lineup of pastries and snacks that’s strong enough to trigger your taste buds.

Oh, and did you know some Starbucks treats are exclusive to certain locations? How? You may wonder. Well, here’s a bonus – most Starbucks joints worldwide offer free Wi-Fi. Coffee and connectivity – a match made in heaven.

So there you have it – the Starbucks saga! 

(B) Business Overview of Starbucks Case Study

Understanding the business perspective is one of the essential parts of the Starbucks case study. Reason? You will get to know how Starbucks is performing in the market in terms of financials and business.

Go through the table given below-

In today’s date, the coffee giant is flexing a market capitalization of a whopping $105.82 billion – that’s some serious coffee beans.

Now, rewind to 2023, and Starbucks made it rain with a revenue of $35.976 billion. But what about the nitty-gritty? Operating income in 2022 hit $4.62 billion, while net income settled at $3.28 billion. These aren’t just numbers; they’re the financial pillars of Starbucks.

That’s not all!

Hold onto your coffee cups; we’re diving into assets and equity. Total assets in 2022 clocked in at $27.98 billion – that’s like a treasure chest of coffee goodness. But here’s a twist – total equity dipped to -$8.70 billion. It’s like a plot twist in a coffee-fueled drama.

Business of Starbucks

Now, let’s talk about expenses and profits. In 2023, expenses tallied up to $30.584 billion, but here’s the kicker – profits soared to $25.108 billion. 

That’s like balancing a delicate espresso shot with a mountain of whipped cream.

In a nutshell, Starbucks isn’t just brewing coffee; it’s a financial powerhouse, stirring up a caffeinated storm in the business world.

(C) History of Starbucks: Timeline & Key Events

Coming to the third part of the Starbucks case study, let’s delve into the history of Starbucks-

Founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Seattle’s Pike Place Market, Starbucks underwent pivotal changes in ownership and leadership. In the early 1980s, Howard Schultz acquired the company and transformed it into a coffee shop, introducing espresso-based drinks after being inspired during a business trip to Milan, Italy.

Schultz served as CEO from 1986 to 2000, orchestrating an expansive franchise expansion across the West Coast.

Orin Smith succeeded Schultz, focusing on fair trade coffee and boosting sales to US$5 billion. Jim Donald took the helm from 2005 to 2008, overseeing substantial earnings expansion. Schultz returned during the 2007–08 financial crisis, steering the company towards growth, expanded offerings, and a commitment to corporate social responsibility. Kevin Johnson assumed the CEO role in 2017.

In March 2022, Starbucks announced Schultz’s return as interim CEO in April 2022, with Laxman Narasimhan appointed to succeed him in April 2023. Narasimhan assumed the position earlier, in March 2023.

Beyond beverages and food, Starbucks stores offer official merchandise and select locations to provide “Starbucks Evenings” with beer, wine, and appetizers. The company’s products, including coffee, ice cream, and bottled drinks, are available in grocery stores globally. The Starbucks Reserve program, initiated in 2010 for single-origin coffees and high-end shops, has evolved. Starbucks operates six roasteries with tasting rooms and 43 coffee bars. 

The company faced controversies but maintains substantial brand loyalty, market share, and value. As of 2022, Starbucks ranks 120th on the Fortune 500 and 303rd on the Forbes Global 2000.

(D) Significance of Logo in Starbucks Case Study

Logo Evolution of Starbucks

Let’s delve into the details of the Starbucks logo evolution. In its inception in 1971, the original Starbucks logo featured a complex design comprising a two-tailed mermaid or siren, encompassed by a wordmark. This design was a visual nod to the brand’s early identity and origins. The mermaid, with its twin tails, was a dual representation of the sea and Seattle, the birthplace of Starbucks.

As the brand progressed, the logo underwent a significant transformation. The evolution saw a shift towards simplicity, as the wordmark surrounding the mermaid was phased out. This marked the beginning of the modern Starbucks logo we recognize today. 

The current emblem showcases a simplified and stylized green siren enclosed within a matching green ring, emphasizing a cleaner and more focused visual identity.

Beyond aesthetics, the modern logo carries symbolic weight. The green mermaid within the circle has become an iconic representation of Starbucks’ commitment to delivering high-quality coffee experiences. 

Additionally, it reflects the brand’s emphasis on creating a sense of community that extends beyond geographical boundaries.

In essence, the evolution of the Starbucks logo is a journey from a detailed and intricate design to a streamlined and symbolic representation. It mirrors the brand’s growth, emphasizing its roots, dedication to quality, and the broader cultural impact it seeks to make through coffee and community.

(E) Market Penetration Strategy: How Starbucks became the coffee king?

In this section, we will look into the key plans and actions that helped Starbucks gain a strong foothold in the beverage and cafe industry.

Starbucks continues to blend innovation and growth, navigating the ever-changing landscape of the coffee industry.

(F) Starbucks Entry in India: Core of Starbucks Case Study

In 2012, Starbucks initiated its venture into India through a significant 50:50 joint venture with Tata Consumer Products Ltd. The inaugural flagship store, which opened its doors on October 19th, 2012, found its home in the historic Elphinstone Building in Mumbai. 

The architectural design of this store ingeniously merged Starbucks’ global coffee legacy with the vibrant local culture, creating a welcoming space for community and connection. Over time, this Mumbai location evolved into India’s first Starbucks Reserve® Store, setting the stage for an elevated coffee experience.

(F.1) The Starbucks Reserve® Store Unveiled: A Coffee Lover’s Haven

The introduction of the Starbucks Reserve® Store marked a milestone in the coffee giant’s presence in India. Spanning an impressive 5,200 square feet, this store greeted customers with the intoxicating aroma of coffee. 

The entrance featured a stunning monolithic terrazzo Reserve bar, a masterpiece crafted by local artisans. Trained black apron coffee masters curated an exceptional coffee experience, showcasing rare and exquisite brews through various brewing methods. 

This Reserve Store was not just a coffee shop; it was a canvas for creating unique moments of connection through the artistry of coffee.

(F.2) Expanding Horizons: Tata Starbucks’ Nationwide Presence

Starbucks in India

Tata Starbucks established a substantial footprint, operating 350+ stores spread across 36 cities in India. In a significant achievement in 2022, Starbucks executed its largest single-year expansion in India, reaching 14 new cities. The brand’s influence spanned major cities such as Mumbai, Delhi NCR, Hyderabad, Chennai, Bengaluru, Pune, and more.

(F.3) Coffee Blends Celebrating Indian Flavors and Heritage

Starbucks paid homage to India’s rich coffee heritage by introducing special blends. The India Estates Blend, sourced from estates in Coorg and Chikmagalur, the birthplace of coffee in India, made its debut in 2013. Additionally, the Diwali Blend, introduced in 2020, served as a tribute to India’s vibrant culture and longstanding coffee traditions.

(F.4) The Tata Alliance: A Successful Partnership

Starbucks in India proudly bore the branding “Starbucks Coffee – A Tata Alliance,” underscoring the synergy between Starbucks and Tata Global Beverages.

Starbucks’ journey in India was not merely about coffee; it was about brewing connections, transcending cultural boundaries, and crafting unforgettable coffee experiences that resonated with the diverse tapestry of India.

(G) Business and Marketing Strategies of Starbucks in India

Starbucks, despite entering India’s coffee scene with strong strategies, faced challenges in a market dominated by competitors like Cafe Coffee Day and Barista Lavazza. Unlike the U.S., where coffee is a staple, India is traditionally a tea-drinking country. 

Starbucks aimed to create a space for relaxation, blending its global coffee legacy with local culture.

Let’s look at the business and marketing strategies of Starbucks in India-

In short, Starbucks’ journey in India reflects a careful blend of global strategies and localized approaches, aiming to create a unique and sustainable presence in a market with diverse preferences and cultural nuances. The success indicators appear promising, showcasing Starbucks’ commitment to long-term growth and meaningful community integration.

Note: Do you know Starbucks collaborated with Apple during the horizontal marketing in the US? We have covered it thoroughly here- Horizontal Marketing System . You can check it out for detailed information.

(H) Wrapping Up the Case Study of Starbucks

Starbucks Growth Strategy

The Case Study of Starbucks unveils a fascinating journey that transformed Starbucks into the reigning coffee king. What started as a local coffee bean store in Seattle’s Pike Place Market in 1971 boomed into a global coffee empire. The strategic moves, like Howard Schultz’s visionary shift to espresso-based drinks, had set the stage for Starbucks’ aggressive expansion.

Throughout its evolution, Starbucks faced challenges, leadership changes, and controversies, but resilience and strategic pivots marked its trajectory. The decision to focus on corporate social responsibility under Schultz’s leadership during the financial crisis showcased Starbucks’ adaptability.

The engagement with local cultures, from the iconic two-tailed mermaid symbol to store designs reflecting regional aesthetics, contributed to Starbucks’ success. Key partnerships, like the one with TATA in India, demonstrated a keen understanding of local markets.

Starbucks’ commitment to quality, community, and sustainability resonated with consumers globally. From unique store experiences to tailored product launches, Starbucks consistently adapted its offerings to cater to diverse tastes.

In essence, the Case Study of Starbucks illuminates a narrative of coffee, community, and corporate strategy, culminating in Starbucks’ reign as the coffee king. 

The journey is a testament to the power of adaptability, brand loyalty, and a steaming cup of coffee that transcends borders, making Starbucks an integral part of daily rituals worldwide!

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Starbucks Case Study - How Starbucks Conquered The Coffee Industry?

Devashish Shrivastava

Devashish Shrivastava

Starbucks Corporation is an American coffee chain that was established in 1971 in Seattle, Washington. By mid-2019, the organization had a presence in over 30,000 areas around the world. Starbucks has been depicted as the fundamental delegate of "second wave espresso," a reflectively-named development that advanced high-quality espresso and specially simmered coffee. Starbucks now uses robotized coffee machines for proficiency and well-being.

Starbucks serves hot and cold beverages, entire bean espresso, micro-ground moment espresso known as VIA, coffee, caffe latte, full-and free leaf teas such as Teavana tea products, Evolution Fresh squeezes, Frappuccino refreshments, La Boulange baked goods, and bites (for example, chips and wafers); some offerings such as the Pumpkin Spice Latte are explicit to the territory of the store. Numerous Starbucks outlets sell pre-bundled nourishment items, sweltering and cold sandwiches, and drinkware such as cups and tumblers. Furthermore, there are Select "Starbucks Evenings" areas that offer brew, wine, and appetizers.

Starbucks first ended up productive in Seattle in the mid-1980s. Despite an underlying financial downturn with its venture into the Midwest and British Columbia in the late 1980s, the organization experienced rejuvenated success with its entrance into California in the mid-1990s. Starbucks opened an average of two new stores every day between 1987 and 2007. On December 1, 2016, Howard Schultz reported he would leave his position as the CEO and would be supplanted by Kevin Johnson. Johnson accepted the role of the CEO of Starbucks on April 3, 2017, and Howard Schultz resigned to end up as the 'Chairman Emeritus', effective from June 26, 2018. Kevin Johnson is currently serving as the CEO and President of Starbucks.

Starbucks - Company Highlights

Startup Story Of Starbucks Corporation History Of Starbucks Corporation Starbucks - Name and Logo Starbucks Expansion Journey Starbucks Corporation in India Business Strategy Of Starbucks In India Products Of Starbucks Corporation Business Growth Of Starbucks Corporation Over The Years Future Plans Of Starbucks Corporation

Startup Story Of Starbucks Corporation

Starbucks Corporation

If you are wondering how did Starbucks start? Then, the story of Starbucks started back in 1971, when the company was a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market.

Zev Siegel stated that at that time he knew the coffee industry inside and out, he was well-versed, especially with the gourmet end of the industry. Besides, he was also known as the most educated coffee guy in the country at that time. So, the three college friends - Zev Siegel, Jerry Baldwin and Gordon, started out with their coffee bean shop and roastery at Seattle’s famous Pike Place Market in 1971. Eventually, they found a mentor in Alfred Peet, who was the founder of Peet’s Coffee and the man responsible for bringing custom coffee roasting to the U.S. and started with the coffee business in full swing. Starbucks initially began by selling coffee beans that were roasted by Peet's, a gourmet coffee company in Berkeley, California, and later on, started roasting on their own.

History Of Starbucks Corporation

tata starbucks case study analysis

The first Starbucks store was initiated in 1971 in Washington by 3 individuals who met while they were studying at the University of San Francisco: English educator Hun Baldwin, history educator Zev Siegl, and author Gordon Bowker. The trio was encouraged to sell top-notch espresso beans and hardware after businessman Alfred Peet showed them his style of simmering beans.

During this time, the organization sold simmered, entire espresso beans. During its first year of activity, Starbucks bought green espresso beans from Peet's, and then started purchasing legitimately from producers.

Starbucks - Name and Logo

tata starbucks case study analysis

Bowker reviews that Terry Heckler, with whom Bowker claimed a publicizing office, thought words starting with "st" were ground-breaking. The organizers conceptualized a rundown of words starting with "st" and in the long run arrived on "Strabo," a mining town in the Cascade Range. The team then finalized on "Starbuck," the name of the young chief mate in the book "Moby-Dick".

Starbucks has given too many slogans/taglines already among which the most popular one is - " Brewed for those who love coffee".

Starbucks Expansion Journey

Number of Starbucks stores Worldwide

In 1984, the first proprietors of Starbucks, driven by Jerry Baldwin, acquired Peet's. During the 1980s, all-out offers of espresso in the US were falling. However, offers of strength espresso expanded, shaping 10% of the market in 1989; it stood at just 3% in terms of market share in 1983. By 1986, the organization worked six stores in Seattle and had just barely started to sell coffee.

In 1987, the first proprietors sold the Starbucks chain to the previous manager Howard Schultz, who rebranded his II Giornale espresso outlets as Starbucks and immediately extended. Starbucks then launched its outlets outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois. By 1989, 46 stores existed over the Northwest and Midwest, and every year Starbucks was simmering more than 2,000,000 pounds (907,185 kg) of coffee. At the hour of its first sale of stock (IPO) on the financial exchange in June 1992, Starbucks had 140 outlets with an income of $73.5 million, up from $1.3 million in 1987.

The organization's fairly estimated worth was $271 million at this point. The 12% segment of the organization that was sold raised around $25 million for the organization, which encouraged a multiplying of the number of stores throughout the following two years. By September 1992, Starbucks' offer cost had ascended by 70% to more than multiple times the income per portion of the past year. In July 2013, over 10% of in-store buys were made on the client's cell phones utilizing the Starbucks app.

The organization used the versatile social media stage when it propelled the "Tweet-a-Coffee" campaign in October 2013. People had the option to buy a $5 gift voucher for a companion by entering both "@tweetacoffee" and the companion's handle in a tweet. Research firm Keyhole observed the advancement of the event and a media article from December 2013 detailed that Starbucks had discovered that 27,000 individuals had taken an interest and $180,000 of buys were made to date.

Starbucks Expansion Around The World

As of 2018, Starbucks is positioned 132nd on the Fortune 500 rundown of the biggest United States organizations by revenue. In July 2019, Starbucks announced a "monetary second from last quarter total compensation of $1.37 billion, or $1.12 per share, up from $852.5 million, or 61 pennies for each offer, a year sooner." The organization's fairly estimated worth of $110.2 billion expanded by 41% in the middle of 2019. The income per share in quarter three was recorded at 78 pennies, considerably more than the estimate of 72 cents.

tata starbucks case study analysis

Starbucks Corporation in India

tata starbucks case study analysis

In January 2011, Starbucks Corporation and Tata Coffee reported designs to start opening Starbucks outlets in India. Despite a bogus beginning in 2007, in January 2012, Starbucks declared a 50:50 joint endeavour with Tata Global Beverages, called Tata Starbucks Ltd. , which would possess and work outlets marked "Starbucks, A Tata Alliance". Starbucks had endeavoured to enter the Indian market in 2007. However, it didn't provide any explanation behind its withdrawal of it.

It was on October 19, 2012 that Starbucks opened its first store, a 4,500 sq ft store in Elphinstone Building, Horniman Circle, Mumbai. Starbucks opened its first cooking and bundling plant in Coorg, Karnataka in 2013 to supply its Indian outlets. The company extended its reach to Delhi on 24 January 2013 by opening 2 outlets. Tata Global Beverages declared in 2013 that they would have 50 areas before the end of the year, with a venture of ₹4 billion ($58 million). The organization did open its 50th store in India on July 8, 2014.

The third city of India to get a Starbucks outlet was Pune, where the organization opened an outlet at Koregaon Park on 8 September 2013. Starbucks opened a 3,000-square-foot lead store at Koramangala, Bangalore on 22 November 2013, making it the fourth city to have an outlet. Starbucks opened the biggest espresso-forward store in the nation at Vittal Mallya Road, Bangalore on 18 March 2019. The store is estimated at 3,000 sq ft and is Starbucks' 140th outlet in India.

Tata Starbucks opened 25 stores between 2017 and 2018, which went up to 30 during 2018-19. On 21 February 2019, CEO Navin Gurnaney reported that Tata Starbucks would use only compostable and recyclable bundling materials over the entirety of its stores from June 2020.

tata starbucks case study analysis

Starbucks reported its entrance in Gujarat on 7 August 2019. The organization opened five stores in Surat and Ahmedabad the following day. Starbucks' leader store in the state is situated at Prahlad Nagar, Ahmedabad, and offers more vegan alternatives than other Indian outlets. CEO Navin Gurnaney expressed that the organization would open more than 30 stores in the 2019-20 financial year, of which 11 have already been opened.

tata starbucks case study analysis

Business Strategy Of Starbucks In India

Starbucks' strategies for business in India seemed rock-solid but the brand wasn't completely immune still. In any case, the world's biggest bistro chain is building its position cautiously via a progression of well-picked steps. Numerous worldwide brands have entered India since the 1990s, being pulled in by its developing and optimistic customer base. Yet, not all have succeeded.

Starbucks isn't the primary contestant in India's composed espresso showcase; so it doesn't have any first-participant advantage. Cafe Coffee Day (CCD) is the market head while Barista Lavazza was the main espresso chain to open for business. Both are valued by the white-collar class. Costa Coffee, Coffee Bean and Tea Leaf (CBTL), and Gloria Jean are valued by the rich group in India.

India is customarily a tea-drinking nation, so espresso chains have concentrated on giving a feel where individuals can unwind and invest energy with one another. This setup implies higher capital expenses. It is different from the US, where the vast majority have a liking for espresso. The Indian buyer base has likewise advanced in the recent decade. What can worldwide brands like Starbucks do to augment their odds of achievement in India? Here are a few thoughts:

Picking a Local Partner

Worldwide brands face the difficult choice of either going solo or tying up with a nearby accomplice. Starbucks' choice to team up with India's TATA Global Beverages demonstrates attention to utilizing different advantages. The TATA Group is one of India's morally determined brands, an observation passed on about Starbucks India too.

Given that India produces espresso beans in just a couple of spots, the other sourcing alternative was bringing in the beans. Be that as it may, this would have raised costs fundamentally.

Tata's espresso plant in Karnataka has been contracted to supply beans to Starbucks' universally, making common cooperative energies. It has contracted to take into account TATA's TAJ SATS, which supplies to TATA's top-notch lodging network – The TAJ. The TATAs are put into the retail part with store brands like Westside, Tanishq, Croma, Star Bazaar, and so forth. Starbucks can use them for information sharing on Indian land, territory points of interest, and handling land administrations. This would enable its very own development to outline. This strategy gives scope for store-in-store deals.

Consistency in Store Arrangements

This keeps up the one-of-a-kind selling purpose of customer experience and allows to pick up economies of scale on CAPEX. Starbucks plans to have a similar store group crosswise over India. However, the size can change depending on financial matters. This is how it works all around. Starbucks wants to provide an agreeable 'café' experience. Having a similar organization gives clients the solace of accepting the equivalent 'Starbucks' vibe any place they go throughout the world.

Keeping the store designs steady means it needs to pick and open new areas stringently, to such an extent that the area can yield a throughput by the venture. Its methodology in-store arrangement is different from CCD, which has picked various configurations to tap the potential interest in any region. CCD has opened a couple of premium outlets dependent on the area's customer profile . It has additionally gone for non-store organizations like takeaway booths and candy machines. Be that as it may, Starbucks may expect that such non-store configurations may weaken its image esteem.

Estimating the Pace of Expansion

India is the place where an inability to screen primary concerns has tossed numerous organizations out of the rigging. So, a top-line just approach doesn't work here. Since Starbucks needs to pick new areas stringently by its equivalent configuration approach, it has decided on a deliberate pace of extension. It is concentrating on the budgetary feasibility of every outlet, as opposed to going for an aggressive development plan which may have brought about rehashed calls for capital.

This operational process is different from its system in the USA and China where it has fabricated scale by opening stores in pretty much every area – being the main port-of-call for espresso by basically being all over the place. CCD's methodology behind adaptable store organizations was to guarantee there is a CCD bistro at a simple reach. It is intriguing to check its normal store gainfulness given its scale.

Guaranteeing Top-Authority Backing and Responsibility

Top initiative responsibility from the two sides of the organization, Tata and Starbucks, has been plentifully clear. Starbucks took as much time as is needed to enter the market (6 years), recognizing that India was a mind-boggling market and required cautious passage arranging. The two sides have spoken finally about their dedication and shared their future plans to give their business a new direction toward growth.

Altering Contributions to Suit Indian Market and Client Needs

Being adjusted to Indian culture, tastes, and inclinations conveyed at a suitable "esteem" guarantees customer importance, construct, and continued utilization. Starbucks mirrors this comprehension – as observed through a blend of western staples, a wide scope of intriguing Indian tidbits similar to confined refreshments on the idea. Since its experience ( and item as well, however to a lesser degree) is its image guarantee, its test lies in conveying an all-around steady, yet locally significant brand experience.

The stores, or the "third spot" as Starbucks calls them, have been altered likewise. The stores don't pursue the worldwide layout and appear to have been planned with consideration, with neighbourhood contacts consolidated. Stores in various urban communities have been structured unexpectedly, mirroring the neighbourhood culture – for e.g., New Delhi's store has ropes and chat on the dividers and henna designs on the floor, though the Pune store has a rich showcase of collectables and copper.

There appears to be sufficient utilization of shading – something missing in the US. The stores have been intended to convey a particular, premium café experience, predictable, and in a state of harmony with the one conveyed over the rest of the world.

tata starbucks case study analysis

Making Inventive and Restricted Plan of Action

Starbucks appears to have made a confined plan of action, planned for conveying a universally reliable item and involvement with locally-focused costs. The Tata group conveys a major sourcing advantage (attributable to its quality over the generation chain, developing, broiling, and exchanging espresso), yet it has just gone past that to develop and support associations with nearby espresso cultivators – putting resources into structure economical cultivating rehearses. All of Starbucks' espresso is sourced locally, a first-ever for the organization.

Scaling up using Arrangements and Organizations

The Tata organization is the genuine overthrow in the Starbucks passage story. Having Tata as an accomplice is gigantically profitable, not due to the validity and strength it offers, or because it coordinates the scale and stature of Starbucks as an organization.

It offers numerous advantages catalyzing pretty much every market section achievement variable - for example, The Tata group has involvement in the retail business , a solid reputation in advancing new pursuits, gives a sourcing advantage through Tata espresso, offers access to high traffic areas using its lodgings and other retail outlets, guarantee excellent nourishment and refreshment supply through its F&B business and so forth.

Furthermore, the potential for an effective organization is amazingly high given Starbucks' and Tata's mutual qualities – the two of them have a solid social inner voice and are resolved to "give back" to the general public and network.

Influencing India for Worldwide Items

Not long after it finished its first year, Starbucks reported that it was serving top-quality Indian Arabica espresso as "Indian coffee" in different markets. Another world-class office for cooking and bundling has just been initiated in Coorg, Karnataka; the results of which are to be analyzed in India and abroad.

Overseeing Discernment and Guidelines

This viewpoint is tied in with structure, a solid positive observation and a picture for the business and brand crosswise over key outer partners and crowds – incorporating the administration, corporate accomplices, networks inside the eco-framework, and customers on the loose. Given what Starbucks has figured out how to accomplish in a year and a half since dispatch, it appears to be genuinely evident that its thought combined with the Tata advantage (critical reach and impact) has helped in developing solid connections and a positive picture with key outside partners and voting demographics.

Engage Nearby Association

Starbucks is by all accounts constructing a nation-explicit activity with nearby individuals in charge and overall unmistakable customer interface focuses, giving them the necessary position to coordinate and work. There is overwhelming interest in enlisting the perfect individuals and giving the essential preparation – to install and instil the organization's culture and administration models.

Along these lines, how has Starbucks fared against the McKinsey spread out variables for long-haul India achievement? Its accomplishments against the scorecard look noteworthy. With thorough vigorous passage arranging and brilliant and quick execution, the multi-month-old endeavour appears to have impressive force, making purchaser and network-driven ventures and focused on sustaining its centre business and brand. It appears to be very much set to "win" in India.

Whether Starbucks will collect a huge piece of the overall industry and accomplish its objective of India being among its best 5 markets over the long haul is not yet clear. It's still early days, yet for the organization, this appears to be an incredible beginning and a great globalization model for multinationals looking for an India section.

Products Of Starbucks Corporation

Aside from the typical items offered globally, Starbucks in India has some Indian-style item contributions, for example, Tandoori Paneer Roll, Chocolate Rossomalai Mousse, Malai Chom Tiramisu, Elaichi Mewa Croissant, Chicken Kathi Roll, and Murg Tikka Panini to suit Indian customers. All coffees sold in Indian outlets are produced using Indian broiled espressos by Tata Coffee. Starbucks additionally sells Himalayan packaged mineral water. Free Wi-Fi is accessible at all Starbucks stores.

tata starbucks case study analysis

In January 2017, Tata Starbucks presented Starbucks' tea image "Teavana". Teavana offers 18 unique assortments of tea in India. One of the assortments called the India Spice Majesty Blend was explicitly created for the Indian market and is just accessible in India. India Spice Majesty Blend is a mix of full leaf Assam dark tea injected with entire cinnamon, cardamom, cloves, pepper, star anise, and ginger. On 15 June 2015, Tata Starbucks reported that it was suspending the utilization of fixings that had not been affirmed by the Food Safety and Standards Authority of India (FSSAI).

The organization didn't indicate what the fixings were or which items they were utilized in. The organization additionally expressed that it was applying for FSSAI endorsement for these ingredients.

tata starbucks case study analysis

As per the Latte Index positioning of the expense of a tall hot latte at Starbucks in 44 nations, India was the fifth most costly nation to buy the drink dependent on January 2016 costs. The record distributed by US-based buyer research firm ValuePenguin found that a tall hot latte cost $7.99 in India, far higher than the $2.75 it costs in the least expensive nation, the United States, yet much lower than the $12.32 in the most costly nation, Russia .

Tata Starbucks propelled the Starbucks Delivers program in mid-2019. The administration offers home conveyance from Starbucks outlets through an organization with Swiggy. The administration was first propelled in Mumbai, with designs to turn it out to other cities.

In its menu, the Tata Starbucks company has launched ice-creams as their new products. The frozen delights are available even in flavours like java chip and caramel macchiato among others and will come in takeaway tubs and single scoops. The ice-creams are now available in 50-60% of the Starbucks stores.

Business Growth Of Starbucks Corporation Over The Years

Starbucks Revenue Over The Years

Tata Starbucks, a 50:50 joint endeavour between Tata Global Beverages and Starbucks Coffee of the US, has announced a 30%  top-line development in financial 2018-19, driven by new store openings and improved execution. Tata Starbucks, which is hoping to make back the initial investment in the current money, has opened 146 stores to date. Tata Starbucks announced "twofold digit top-line development - 30% for the entire year, driven by new stores and improved store execution," Tata Global Beverages Ltd (TGBL) said in a financial specialists' introduction. Tata Starbuck's income for 2018-19 is required to be approximately INR 450 crores.

TGBL said Tata Starbucks opened 30 outlets in the past financial year, out of which 15 new stores were opened during the last quarter of the money-related year. The organization claimed detailed benefits at the store level; all urban areas were likewise productive, and additionally saw an ascend in nourishment share in general deals.

The Starbucks company has added around 40 stores in FY21 but the company had recorded a 33% Y-O-Y  fall in its revenues during the same fiscal. According to the Sushant Dash, CEO of Tata Starbucks, the recovery that the company has seen after the second wave of COVID-19 was better than what it saw after the first wave of the deadly pandemic. The quarterly growth after Q2 FY22 was 120% more than what it saw during the same period in the previous fiscal. The company has hugely focused on home deliveries ever since the pandemic broke out. It has already addressed concerns associated with the spillage and other challenges pertaining to home delivery, which contributed to over 18% of the total sales that the company witnessed this fiscal, as per the reports in November 2021. Furthermore, the company has also added ice-creams to their menu in flavours like java chip and caramel macchiato. The Sanjeev Kapoor menu is another thing that has been freshly launched by Tata Starbucks. Besides, the company also launched a one-litre freshly brewed beverage and at-home coffee.  

tata starbucks case study analysis

Future Plans Of Starbucks Corporation

Tata Starbucks Pvt. Ltd. is looking to forcefully grow its impression in the Indian market with its eyes on the quickly spreading "espresso culture" among the twenty to thirty-year-olds and upwardly versatile customers. Tata Starbucks, a JV between US-based Starbucks Coffee Company and Tata Global Beverages Ltd, hopes to set up altogether more number stores this monetary than it did previously.

Starbucks is hopeful about solid business development in India throughout the following year as it means to leave red in monetary numbers after 2020. "Our proceeded with development in topline and reasonable methodology towards extension will enable us to accomplish make back the initial investment by March 2020," Navin Gurnaney, CEO, Tata Starbucks disclosed to Business Line in the wake of declaring five new stores in Gujarat - three in Ahmedabad and two in Surat. Gurney likewise included, "First time in quite a while, we are opening five stores in any state in one go.

Gujarat is a significant market for us. In the wake of opening these five stores on Thursday, the all outnumber of hides away goes up to 157 in India." Starbucks entered India with its first store opened at Mumbai in 2012. Of the 157, the organization has opened all out 11 stores so far in this financial, as against complete 30 stores opened during 2018-19. It takes into account 270,000 clients each week in India. The organization had announced a turnover of INR 442 crores for the monetary 2018-19.

"Espresso business in India is developing significantly. The espresso culture is being initiated by recent college grads, upwardly versatile, and individuals who travel and get brand. Two years back, we set up 25 stores (in a year). During the last financial 2018-19, we included 30 stores.

This year we will beat that number considerably and by end of March 2020, we will have included a lot a greater number of stores than we included in the past," Gurney said. With per store venture prerequisites being evaluated at INR 1.7-2 crores, the complete CAPEX plan by the organization works out in overabundance of INR 50 crores during current monetary on the off chance that it opens more number of stores than a year ago. Be that as it may, Gurnaney ceased from giving venture figures for 2019-20.

The organization is likewise open to different open doors for development including inorganic development through acquisitions. Be that as it may, when tested about any probability of a venture plan in the espresso chain Cafe Coffe Day (CCD), Gurnaney denied estimating any discussions for securing. "We are very hopeful about India. We will be attentively forceful (to extend). (At present) we are not in discussions with anyone for obtaining.

In any case, we are hoping to develop constantly," he included. With an end goal to upgrade the client experience, Starbucks is presenting new nourishment things, taking into account all client needs including breakfast and lunch. The income share from nourishment things is right now around 25%, even as it keeps on developing with new things to meet the client's needs.

Who founded Starbucks?

Starbucks was started by Hun Baldwin, Zev Siegl, and Gordon Bowker in 1971.

Where was the first Starbucks started?

Starbucks was started in Pike Place Market, Seattle, Washington, United States.

When was Starbucks started in India?

Starbucks was launched in India in 2012.

What is the revenue of Starbucks?

Starbucks revenue was recorded $29.02 billion in 2021.

How many Starbucks stores are there worldwide?

There are 33,830 Starbucks stores in the world as of 2021.

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