Expansion of Starbucks in India

Expansion of Starbucks in India

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to Starbuck's business expansion in India. In this study, we have proposed India for Starbucks to expand its operation. The purpose of selecting India is related to the fact that Starbucks hasn't properly expanded their operation in this region yet. Furthermore, due to its liberal policies and cooperative investment environment, India has the potential to help new business flourish. This is an expansion proposal suggesting whether or not the firm should enter the country we have identified in the first place. Our proposal would address investment prospecting process, investment strategies, financing options, cost of capital evaluation, cash management, and risk management strategies.

Discussion

Starbucks Corporation

Starbucks Corporation is considered as one of the finest coffee making companies in the world. It is one of the leading companies of Untied States of America, situated in Washington. Starbucks Corporation has 19,763 stores in various countries of the world. It has 12,848 stores in USA, 1,264 in Canada and 621 in China. Starbucks Corporation sells different varieties of coffees such as drip brewed coffee, espresso coffee, pastries, snacks and other items which include mugs and cups. There is also a brand of Starbucks Corporation such as Hear Music which sells books, music and film. The products of Starbucks Corporation are seasonal and vary from store to store and depend upon the locality. Ice cream and coffee are also sold at numerous stores. The business of gourmet coffee is at its peak. A number of players have entered into this market ranging from multinational chains to road side cafes. Specialty coffee in the United States is the fastest growing business. The credit of Starbucks' success goes to the projection of its stores. The stores of Starbucks coffee offer customers a venue where they can socialize. This strategy increased the customer base of Starbucks. A lot of customers prefer Starbucks as a place to socialize (Starbucks Corporation, 2011).

Indian Economy

India's economic growth will overtake that of China, on its way to a GDP in excess of US$2 Trillion by 2015. India's attractive GDP growth is a reflection of its large population. With a population of 1.17 billion, it is the second most populated country in the world after China. Forty-seven percent of the country's population is under the age of 20, and teenagers number about 160 million. Like other emerging economies, India is also witnessing two distinctive shifts: (a) a declining dependency ratio, and (b) the largest urban migration in its history. It is expected that the population in Indian cities will reach 590 million by 2030, increasing from 340 million in 2008. This increase in urban population is expected to drive a fourfold increase in per capita incomes and contribute up to 70 percent of the total GDP (Datt, 2011).

Starbuck's Decision of entering Indian Market

Whether Starbucks should enter Indian market or not depends on the potential of doing business in the ...