WAKE UP AND SMELL THE COFFEE STARBUCKS IS EVERYWHERE !

Introduction
Largest coffee house company in the world based in Seattle 17009 stores in 50 countries with over 11000 in US but none in India Ranked as the most Ethical Company in its category by Ethisphere magazine Purchases Certified Fair Trade Coffee

STARBUCKS COMING TO INDIA

KEY POINTS OF MoU WITH TATA GROUP (A) Starbucks will explore setting up stores in the Tata group's retail outlets and hotels, besides sourcing and roasting coffee. (B) The two companies will collaborate on providing training to local farmers and agronomists to improve coffee-growing and milling skills

(C) Explore social projects in the coffee-growing regions where Tata Coffee operates.

In Howard Schultz words

This MoU is the first step in our entry to India. We are focused on exploring local sourcing and roasting opportunities with the thousands of coffee farmers within the Tata ecosystem. We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations.

Operating Segments
OPERATING SEGMENTS ARE DIVIDED INTO THREE MAJOR CATEGORIES (A) US 71% revenue contribution (B) International 21% revenue contribution with Major players as Canada , Japan, UK. (C) Global Consumers Products Group (CPG) 7% revenue contribution CPG operates mainly through Joint Ventures with large consumer products business partners for selling packaged coffee and tea products through grocery stores, warehouse clubs and convenience stores.

Operating Models
OPERATING MODELS ARE DIVIDED INTO TWO CATEGORIES (A) : 52% of the total Starbucks stores worldwide. Out of these 75% are in US. Majority of the rest of the company operated retail stores are in countries like UK and Canada where culture and customer base is equivalent to US. : 48% of the total Starbucks stores worldwide. Out of these 55% are in US alone and rest 45% cater to International Market, majority of which includes Asian Markets like China, Japan.

(B)

Why India is Starbucks Cup Of Tea?

Economic Outlook (Trends in GDP and FDI) Socio Culture (Lifestyle and Demographic) Resource availability and Unsaturated Market

What Starbucks brings to the table?

Threats
Red Tape Risks Corruption Risks Regulation/ Law Risks Cultural Differences Competitive Issues

Possible Modes of Entry

Our Take On Entry

JV + Strategic Alliance best option Short-term Strategy (Enter into JV with TATA Coffee by sourcing and roasting beans from TATA plantations) Long Term Strategy ( Franchising)

STARBUCKS ENTRY INTO CHINA

1. There were many barriers like cultural difference, more popularity of tea in comparison to coffee, difficulty in getting permissions to run and sell businesses. 2. Starbucks entered into Chinese Market through a licensing agreement with Beijing Mei Da Coffee Ltd. Who ran a wholesle business of supplying coffee beans to various hotels and restaurants. 3. Through the wholesale business with Mei Da Coffee , Starbucks learnt the dynamics of Chinese market and three years later opened its first licensed retail store in Beijing. Starbucks came up with many innovations in Chinese market.

STARBUCKS ENTRY INTO UK AND OTHER EUROPEAN COUNTRIES

Starbucks entered into UK by acquisition of then 60 outlet UK based Seattle Coffee Company, rebranding the stores as Starbucks.