Starbucks: Expanding into the Indian Market through Joint Venture

Starbucks

Contents
Introduction......................................................................................................................................3
Main body........................................................................................................................................4
Question 2 evaluates the motives underline Starbucks to decide to use a joint venture to
expand into the Indian market rather than licensing or acquisition.............................................4
Question 4 due to covid-19 Tata Starbucks has been planning to expand its E-Commerce and
enhance their Omni channels of retail strategy............................................................................7
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Introduction
Starbucks is an American multinational company, which use to provide a chain of coffee
and roaster reserves. The headquarter is situated in Seattle, Washington. It was founded in 1971
by the three coffee entrepreneurs those are Jerry Zev, Seigel, Gordon bowker. They have opened
this with the help of their personal savings small bank loan and their love for coffee. They settled
their first store in Seattle Pike Place public market. The organisation has decided to deal with
fresh roasted full beans in their store as a Revolutionary idea at that time (Arora and Jyoti, 2019).
The handmaiden committee to ethically Sourcing and roasting the highest quality of arabica
coffee around the globe. In the year 2008, the company has fast and aggressive growth and has
come to the halt. At the time more people are reassessing their daily spending habits on the
luxury items.
In 2012 the company reached the Indian market into an agreement with Tata coffee to
create Tata Starbucks Limited. The joint venture between Tata Starbucks Limited has made India
the 61st foreign market. The store, 4000 square foot and two level extravaganza is located in the
elegant and historic Elphinstore building in South Mumbai. Tata possesses a unique position in
India with the unique capabilities in terms of infrastructure. Avani Saglani Dada, is the CEO of
Tata Starbucks, who used to manage and develop the strategies for the benefits of organisation.
This report talks about PEST analysis of the company and also determines the opportunities and
challenges in the Indian market. Underline the decision of joint venture in order to expand
Starbucks into India rather than licensing or acquisition. Further, the report is discussed about the
key tangible and intangible brand attributes which must be adopted by the organisation to ensure
that Indian constructors have a positive experience with respect to romance in theatre when they
visit the outlets. Lastly, the planning to expand the organisation in India with the help of e-
commerce and Omni channel retailing study cheese and their recommendation to be successful
with the digital initiatives.

Main body
Question 2 evaluates the motives underline Starbucks to decide to use a joint venture to
expand into the Indian market rather than licensing or acquisition.
Joint venture is the business entity created with the help of two or more people where
they are generally categorized by their shared ownership return and risk. Many companies
generally pursue joint ventures in respect to expanding their businesses into new markets, to gain
scale of efficiency by combining Assets and operations, risk for investment or to access the
capabilities of one another (Bagchi and et. al., 2020). The joint venture is beneficial into
minimizing the downside risk for both the parties. The legal definition of joint venture is defined
as when two or more persons come together with an individual to form a temporary partnership
for the purpose of carrying out a particular project. The parties under it are called co Ventures. It
is beneficial for Starbucks to expand their business of beverages in order to offer it for the Indian
customers (Conlon and Morris, 2019). The company has agreed to joint leverage assets and
innovations to offer a premium tea product branded that is Tata Tazo. It is the common way of
combining resources in expertise by two or more unrelated companies. The benefits of Joint
venture are mentioned below:
 New insights and expertise: joint venture helps in providing the opportunity to gain new
insights and expertise to both the organisations that are coming under it. It helps in
determining the easier way for firm to understand the market in the short-term
partnership.
 Better resources: when we companies from joint ventures it will be easy for them to
access better resources such as specialized staff, technology and raw material and many
others (Espinoza and Elizabeth, 2017). All the equipment in capital which is needed by
the organisation in the project can be used in a proper and effective manner.
 It is on temporary bases: the formation of joint ventures is only hard temporary
agreement between the companies (Sheela and Sneha, 2017). It can be for a year or more
where the companies are committed on the agreed terms and conditions between them
such as sharing of risk and cost which means in a group of joint venture when the project
fails then the risk and cost will be bearded by both the organisation because both the
forms had volunteered to share their expense and also agreed to support the losses.