Cash-back offer from March 22nd to 31st, 2024: Get a flat 10% cash-back credited to your account for a minimum transaction of $50.Post Your Questions Today!

Question DetailsNormal
$ 60.00

Analyze the Starbuck case

Question posted by
Online Tutor Profile
request
  • Analyze the Starbuck case to uncover the business problem, evaluate the alternatives, and make a recommendation. Relate to the concepts as much as possible (see below checklist). 

Format (must follow): 

Introduction 

Problem Statement 

Alternatives 

Evaluation of Alternatives (Pro and Cons) 

Recommendations 

 

Concept Reference: 

1.Market: 

Market structure, market segment, target customer, unmet needs, Maslow’s hierarchy of needs 

2.Product: 

Product positioning, brand equity, brand growth strategies 

3.Price: 

Pricing objectives, value equation, price elasticity 

4.Place: 

Direct vs indirect channels, distribution partners, types of distribution 

5.Promotion: 

Marketing mix, buyer decision process, promotion response 

6.Strategy Reformulation: 

Marketing control, symptoms vs problems, effectiveness vs efficiency, data àinformationàinsight 

7.Global Marketing: 

Market selection & prioritization, types of distance, modes of entry, global brand characteristics 

 

 

REQUIREMENTS 

 marketing  marketing strategy  fordham 

In early 2015, the financial press reported that the Tata Starbucks joint venture had incurred major losses in its first full year in the Indian market. However, the company remained committed to making this venture a success over the long term.1 Starbucks had had its eye on the large Indian market for a while. An attempt to enter the market several years earlier had failed due to complications with the Indian government and foreign direct investment (FDI) restrictions.a The company had withdrawn its application then and was an eager responder when India’s esteemed Tata Group knocked on its door with a partnership opportunity. A 50-50 joint venture was formed, and Starbucks coffee was introduced to the Indian market in October 2012 with a generous initial investment of $80 million.2 The Tata Global Beverages board of directors expressed a lot of excitement about the potential of the newly formed joint venture between the company and Starbucks.b “Through Tata Starbucks, your company offers the legendary Starbucks coffee experience, backed by the trust of the Tata name, to the Indian consumer,” announced Cyrus P. Mistry, chairman of Tata Global Beverages.3 The Indian café market offered a lot of potential for the new Tata Starbucks alliance. While India was a nation known for its tea drinkers, sipping coffee and socializing at coffee shops was becoming increasingly popular. Domestic consumption of coffee had risen 80 percent in the past decade. Given these encouraging trends, Starbucks CEO, Howard Schultz, believed that India could one day rival the company’s successful venture in China. With its store count exceeding 40, the Tata Starbucks joint venture had clearly come a long way since it was kicked off in January 2012, but it was too early to celebrate. Continuing to succeed in the Indian café market would not be an easy task due to two key challenges—competition and profitability. The market was intensely competitive, with multiple domestic and foreign players. The most formidable competitor was domestic giant Café Coffee Day (CCD), which had already adopted a strategy of flooding the market with its cafés, closely mimicking what Starbucks had done in the United States. Another critical challenge companies faced was the ability to break even. High real estate costs and rental rates, along with competitive pricing pressures and Indiaspecific cultural preferences, made it extremely difficult for coffee companies to recover their initial investments. Tata Starbucks CEO Avani Davda admitted the initial consumer experiences had been a humbling experience. Tata Starbucks had opened its first store with a lot of fanfare in the trendy Horniman Circle area of Mumbai. Despite having a high-profile local partner, Starbucks was unable to use its name to secure any discounted rates in renting real estate. The first store was located in a Tata Group–owned 4,000-square-foot site that had been vacant for a while. By 2015, Tata Starbucks appeared to have expanded to over 50 locations across the country in major metropolises like Mumbai, Delhi, Pune, and Bengaluru.4 Yet this was well short of the initial expectations—the target at launch had been set at 50 stores by the end of the 2012 launch year. Clearly, something had changed in management’s expectations of the size or pace of growth from the venture. Quarterly earnings presentations since then had boasted of robust store profitability with no numbers provided, possibly pointing to a slower and more selective approach to expansion.5 However, in its first full year in the Indian market (12 months ending March 2014), Tata Starbucks reported losses of Rs 51.87 crores,c more than half its total sales of 95.42 crores during the same period.1 The joint venture appeared to be at the crossroads of an important strategic decision. It could revert to a plan to grow its store count aggressively, much like Starbucks did in the U.S. It is possible that this was the original intent. After all, the initial launch pricing had been set to be competitive with CCD’s pricing (coffee drinks available for as low as Rs 100). This approach would put it in direct price competition with CCD, the domestic café market leader. However, gaining market share among the youth of the country would allow Tata Starbucks to tap into a large demographic segment. India’s population showed a pronounced skew to younger age brackets (see Exhibit 1) and lower incomes when compared to countries like Japan and the United States. Building a presence within these segments as CCD had done could be critical for success in the long term. Alternatively, the venture could choose to embrace a premium-priced, niche approach similar to the one Starbucks CASES C

Available Answer
$ 60.00

[Solved] Analyze the Starbuck case

  • This solution is not purchased yet.
  • Submitted On 14 May, 2022 01:18:41
Answer posted by
Online Tutor Profile
solution
Analyze the Starbuck case Name Institution Page Break Analyze the Starbuck case Introduction Tata Starbucks Pvt. Ltd in the Indian market operates as a 50-50 joint venture between U.S based Starbucks and Tata Global Beverages. The business dates back to October 2012; when the two companies joined hands to enter the Indian market. Before the formation of the joint venture, the CEO had attempted introducing the usual Starbuck’s coffee menu in the country; an effort that proved to be futile. The failure drove the company to the adoption of India-customized strategic approach that would form a firm basis for the venture’s future success. It is imperative to highlight that the company’s initial stages of business were turbulent. However, the business soon flourished as evidenced by the establishment of additional stores in the country over a short period (Dev, Alan & Helaine, 2015). The joint venture succeeded in opening more than forty outlets in the country over the years. The company’s success in the Indian coffee market was significantly challenged by the stiff competition as well as low profitability. The business faced stiff competition from other entities such as Café Coffee Day among others. The business had a lucrative opportunity to thrive in the country’s market due to the high number of customers for the beverages. Profitability was crippled by the high operating costs such as rental and real estate costs. Avani Davda, the company’s CEO, sought to adopt strategic approaches that would see the business expand within the Indian market (Dev, Alan & Helaine, 2015). As such, the text offers an objective analysis of the case study in a bid to highlight the various alternatives available to the joint venture at the time it was formed, and which it could embrace to succeed in the Indian market. It will examine the marketing concepts covered in the case study to evaluate the alternatives available for the joint venture. Despite the formation of a joint venture with a local company, Starbucks experienced substantial difficulties after its inception in India. Problem Statement Starbucks entered the tea dominated Indian market by forming a joint venture with Tata Global Beverages, which was Indian. The Indian market proved a hard nut for the joint venture to crack because they were offering a new type of product in a market whose culture was also new to the bu...
Buy now to view the complete solution
Other Similar Questions
User Profile
Exper...

BTM8107-8 | Week: 4 | Activity: Analyze t test and ANOVA | Rated A+

The Creativity pre-test score and post-test score is graphically presented in the following histogram. The below graphs indicates that the post-test creativity scores are more skewed to the right. There are few values plac...

User Profile
termp...

Competency_Assesment_3.docx__2_.docx MM255-3 Analyze the results of mathematical calcula

Competency_Assesment_3.docx__2_.docx MM255-3 Analyze the results of mathematical calculations for financial decision making The best annuity option for the Viny Fence Company is the annuity due because it more lucrative. ...
User Profile
mtish...

Analyze the Starbuck case

Analyze the Starbuck case Name Institution Page Break Analyze the Starbuck case Introduction Tata Starbucks Pvt. Ltd in the Indian market operates as a 50-50 joint venture be...
User Profile
Acade...

Analyze the case of SeaWorld of Florida v. Perez, 2014 U.S. App. LEXIS 6660

Analyze the case of SeaWorld of Florida v. Perez, 2014 U.S. App. LEXIS 6660 (D.C. Cir.) located in your textbook on pp. 554–558, including the opinion of Judge Rodgers as well as the dissenting opinion of Judge Kavanaugh. ...
User Profile
BESTQ...

NURS6640D Week 6 Assignment: Addictive disorder and analyze the therapeutic approach for treatment

NURS6640D: Week 6 Assignment: to examine a client with addictive disorder and analyze the therapeutic approach for treating the client: Walden University FULL EXPLANATION IS IN THE ENCLOSED ATTACHMENT. ...

The benefits of buying study notes from CourseMerits

homeworkhelptime
Assurance Of Timely Delivery
We value your patience, and to ensure you always receive your homework help within the promised time, our dedicated team of tutors begins their work as soon as the request arrives.
tutoring
Best Price In The Market
All the services that are available on our page cost only a nominal amount of money. In fact, the prices are lower than the industry standards. You can always expect value for money from us.
tutorsupport
Uninterrupted 24/7 Support
Our customer support wing remains online 24x7 to provide you seamless assistance. Also, when you post a query or a request here, you can expect an immediate response from our side.
closebutton

$ 629.35