Made in irop country

Global Business Opportunities Project:
Starbuck’s in India
Prepared by: Team B
Table of Contents Global Business Opportunities Project: 1 Starbuck’s in India 1 EXECUTIVE SUMMARY 3 Module 1: IDENTIFYING GLOBAL BUSINESS OPPORTUNITIES 3 Module 2: ANALYZING INTERNATIONAL COMPETITORS 7 Module 3: ASSESSING THE ECONOMIC-GEOGRAPHIC ENVIRONMENT 9 Module 4: ASSESSING THE SOCIAL – CULTURAL ENVIRONMENT 9 Module 5: ASSESSING THE POLITICAL-LEGAL ENVIRONMENT 9 Module 6: SELECTING A GLOBAL COMPANY STRUCTURE 11 Module 7: FINANCING SOURCES FOR GLOBAL BUSINESS OPERATIONS 13 Module 8: A GLOBAL MANAGEMENT INFORMATION SYSTEM 14 Module 9: HUMAN RESOURCES for GLOBAL BUSINESS ACTIVITIES 15 Staffing 15 Module 10: MANAGING INTERNATIONAL FINANCIAL AND BUSINESS RISKS 18 Module 11: PRODUCT AND TARGET MARKET PLANNING 20 Module 13: PLANNING A GLOBAL PROMOTION STRATEGY 22 Module 14: SELECTING AN INTERNATIONAL PRICING STRATEGY 24 Module 15: DETERMINING ORGANIZATIONAL FINANCIAL RESULTS 24 Module 16: MEASURING INTERNATIONAL BUSINESS SUCCESS 24 References 25 25

EXECUTIVE SUMMARY
Starbucks’s was established in 1971. From the first inception in Seattle’s famous Pike’s Place Market to its expansion across the United States Starbuck’s has looked to the global market to share the Starbuck’s way of experiencing coffee. Starbuck’s offers a variety of coffees and teas. In addition to drinks Starbuck’s offers pastries, salads, and sandwiches. Currently Starbuck’s has over 19,000 retail stores in over 60 countries. Starbucks is looking to expand is global business presence in the Southern Asia region. In this plan we will explore business opportunities, discuss potential competition, and risks involved in expanding the Starbuck’s franchises to India.

Module 1: IDENTIFYING GLOBAL BUSINESS OPPORTUNITIES
Global Business Opportunities

Starbuck’s seeks the opportunity to expand its franchises to India. India is a demographic with a population of just over 1 billion. India is an emerging market with high economic growth. Investment in India’s food and drink industry has the opportunity for high returns. The population is predominately a tea drinking nation. A small coffee consuming culture already exists in the southern hemisphere of the country. With a virtually untapped coffee market from foreign direct investment, Starbucks has the opportunity to be the first corporate company to develop the market. With a population of over 1 billion people there are opportunities to bring coffee diversity and new coffee experiences shared by the Starbuck’s culture enthusiasts.

Market Potential

India is part of the small list of economies that are growing year after year. With a growth rate of 8% annually and a middle class of over 350 million people India represents a market with increasing purchasing power (Pathak, 2013). India’s market is driven by its large consumer base. India’s main culture base is still influenced by its ancient values but, today the younger generations are opening up to western culture ways. Western ways are becoming more acceptable. The internet has allowed for people all over the world to be exposed to many different cultures. The opportunity exists for Starbucks to penetrate this market. India’s population will continue to growth with more people migrating from the rural areas to the more urban surrounding. Starbucks will focus to allocate coffee houses in all of the major cities like Mumbai.

Absolute and Comparative Advantages

One of India’s agriculture products includes the cultivation of teas and coffee beans. Coffee beans are grown in the Karnataka, Kerala, and Tamilnadu regions. Currently India is the 6th largest producer of coffee beans. Their main coffee bean crop is Arabica beans. With the local production of coffee Starbucks will be able to utilize these resources to their advantage. This will allow Starbucks to develop a local market for the coffee production. Currently the overall production of coffee is 300 tons where domestic consumption of coffee is only at 100 tons. Coffee is not the main staple drink in India. Due to the lack of domestic coffee houses Starbucks holds the absolute advantage in creating and broadening the coffee consumption market.

Business Opportunity Analysis

India represents an opportunity for Starbucks to streamline and enable ease of access for coffee to the Indian population. As being the first international coffee franchise to enter the Indian market Starbucks can establish a more efficient system of conducting coffee transactions. From grower to end user Starbucks will have the comparative advantage of establishing a large end user market for the local coffee business. Collaboration with the domestic economy will enable Starbucks to prevent any hostility towards being a foreign company. Introducing new concepts and ideas will allow Starbucks to build on a communal relationship. Local coffee will be offered with the introduction of different coffee flavors from around the world. Job opportunities will be created for local people and franchise opportunities will exist for local entrepreneurs.

Market Strategy Risks Analysis

The table 1 below represents a standardize risk assessment strategy tool. Based on this market strategy risk assessment entering a new market generally possess a medium risk. A new market can have its risks due to the inability to connect with the end users. With Starbucks already having established franchises in over 60 countries we can rely on our existing strategy plans. Diversification in a new market is considered a high risk. Starbucks strategy in developing a new market will need to develop a relationship with an established domestic company. Starbucks looks to establish a partnership with Tata Global Beverage of India. This partnership will allow for ease of product integration.