Global Business Opportunities Project: Essay

8736 words - 35 pages

Global Business Opportunities Project:
Starbucks Going to India

Prepared by: Group A

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This way everyone form students to high executive CEO’s can enjoy the environment Starbucks offers; all will have the same full service experience no matter how much they spend. Starbucks also has a relationship with India’s largest and successful company, Tata Group. Tata Group offers numerous coffee and tea products that local flavor palettes are fond of already. This is a gateway for Starbucks locations in the popular locations around Mumbai. By offering an “elite” experience for all customers, India will be extremely welcoming to experiencing a full service Starbucks for themselves.
Absolute and Comparative Advantage
Currently not all bordering countries have the expansion of Starbucks. This is the leading international market for Starbucks. China has made it an example that it is easy to develop and produce high quality Starbucks products with the chance of high profits. India and China are similar in their preference of tea over coffee but Starbucks is still successful in opening almost 500 locations in China. As seen in the US, Starbucks is a corporation that has expanded because of the high volume of stores. India is a great platform for opening up a more traditional full service Starbucks.

Business Opportunity Analysis
India has been the leading distributor and consumers of tea for over 170 years but that title went to China in 2004 with the rise of competition. There has become less and less demand, but not supply, of Indian teas. With the overabundant supply of tea, Starbucks has an opportunity to team up with local producers to promote and sell those local flavors in Starbucks all over India. One of the most staggering numbers that seems to keep on expanding in India is the coffee consumption per capita. The production of coffee within India is expected to be the highest it has been ever. The weather conditions in places like Brazil have impacted India’s exports positively because coffee is growing better in the weather conditions in India. According to an article about coffee growth in India, there was 13% increase in output of state-owned Coffee Board tonnes. With these types of numbers Starbucks Corporation will be entering the Indian market at a great time of expansion. Starbucks Corporation will not only specialize in making coffee but it will also focus on tea. In India tea is a big part of their culture. The national average of tea consumption nationally is at an average of 733 gram/capita. In western India the current average is 900 gram/capita. As you can see tea consumption is a big part of India and implementing a Starbucks will increase India’s per capita of tea drinking. Starbuck’s brand always brings coffee to mind, that makes it difficult to break into a market, successfully, that is focused on tea. Coffee consumption was nearly motionless in 1980s and 1990s. But in the past 7 years that growth in consumption of coffee is expected to be about 5% increase; this movement is pushed by the brand name coffee...

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