Motives for Starbucks' Joint Venture in India

University Name :London South Bank University
Module name : International Marketing (MMP_7_IMK_2)
Student number : 4035317
Date : 5TH May 2022
Module leader : Jun Nguyen
Name of seminar tutor :Miss. Ellie Abascal
Your chosen case study : Starbuck’s
Your chosen question : 2nd
Word count :

Executive summary
A brief introduction of Starbucks is provided in this report. The prime focus of this report is the
international expansion of Starbucks specifically in India. This report is conducted with the aim of
investigating the reasons for expansion in the Indian market through Joint Ventures instead of
acquiring and licensing. Due to that purpose, this report evaluates the motives behind the
expansion in the Indianan market. After identification of issues, findings are critically evaluated,
and concluding remarks along with recommendations are given at the end of the report.
Introduction

The introduction needs to be concise, to the point and clearly state what the direction and scope
of the report and who the case study company is.
While some background to the report/project is useful, think carefully about what your reader
needs to know about the background, and what might be unnecessary information.
Starbucks is one of the leading US-based multinational companies all over the world. It is
famous as the finest coffee-making company around the Globe. This company was founded
in 1971 by Gordon Bowker, Zev Siegel, and Jerry Baldwin in Seattle, Washington. Howard
Shultz was a vital person behind the worldwide success of Starbucks. In the beginning,
Starbucks faced various difficulties but nowadays this company is considered one of the
world’s best Coffee shops due to its wise international expansion decision and position
strategy. Starbucks company can enter the new markets in a quick manner and maximize
the brand presence as well as the consumer base by changing or transforming the
consumer’s coffee drinking ways. It helps to increase the Consumption of Coffee at the
global level. The mission of Starbucks is to encourage the individual spirit by one cup, one
person, and one region at the same time. Starbucks has one local major competitor known
as Coffee café day and two international competitors such as Barista Lavazza and Costa
Coffee in the Indian market. These competitors capture a major part of the Indian Coffee
Market. Tata Global Beverages and Starbucks are the two most compatible companies with
the same business values. In 2011, both companies have decided to enter the Indian market
as a joint venture. Both companies complement each other with diverse but substantial
assets. But there is a significant concern about Starbucks with the entry into the Indian
Market as the tea is a traditional drink in Starbucks and changing their preferences and
drinking habit is a great challenge for a company. Furthermore, several various strategies
are used by Starbucks for entering in Indian Market. This report will provide a detailed
reason behind the decision of choosing a Joint venture to enter in Indian market Instead of
acquisition and licensing. Starbuck made extensive research before entering the Indian
market and after 6 years of research, Starbucks decided to enter. Therefore, it can be said
that long-term and extensive knowledge about resources in the market can be the key
motivation for the company to enter the Indian market. Starbucks has made a Joint venture
with Tata Global Company with the use of the OLI framework and AAA structure.