Starbucks: The Indian Dilemma 2006

Starbucks: The Indian Dilemma 2006

Introduction

Starbucks is counted among the world's No. 1coffee retailer, having stores in more than 36 countries around the world, with more than 11, 000 stores. The company gets around 40 million costumers each week and has more than 7, 600 retail stores in United States only. As with all the other international organizations, Starbucks also started entering other parts of the world after spreading its roots in United States. The company opened outlets in Starbucks in 1995, starting from Japan and moving on the China and then India.

In 2002, Starbucks announced that it was planning to enter India and the plans were materialized in 2006, when the Starbucks spokesperson finally announced that the company is planning to offer the finest quality coffee to the Indian population and expects the positive response from the population.

Management

By the time Starbucks started to enter India, it was already too late and a number of coffee giants, including Barista as well as Café Coffee Day were already present in India and were growing in every part of the country. The management of the company was thus unable to manage the situation and failed to develop the required reputation in India, thus resulting in a failure and creating the Indian dilemma for Starbucks. It should be taken into account that the management of the organization, which was mainly composed of the local citizens and regional managers, made a number of attempts to settle in the Indian market but failed all the attempts, thus causing Starbucks to retract from the market.

Finance

The company after a number of failed attempts for settling in the area, decided to reenter the market in joint venture with an organization, in order to resolve the financial issues and make sure that the local strategies and marketing techniques are better adopted. Thus, Starbucks entered the market in joint venture 'New Horizons Retail', in order to manage the financial as well as the marketing issues, which were preventing the company from thriving in the company. However, there were a number of other financial issues as well that prevented Starbucks from thriving in India. For instance, the company had already received a dramatic decrease in growth at the same time, and the fact is evident from the comparison of store sales of Starbucks. Moreover, the same situation already caused Starbucks to lag behind its major competitors in the field, which clearly indicated the economic downturn of the company during the same period.

SWOT Analysis

The following paragraphs present SWOT Analysis of the Indian Dilemma of Starbucks:

Strength

Starbucks' major strength is its international and global reputation, which implies that the organization is internationally known and has an established reputation throughout the world. It is eminent to mention here that the clause is counted as a major plus for any organization planning to start operations in other parts of the world. In addition, there is strong tea and coffee addiction in India, thus providing ease in designing marketing as well ...