MBA Global Business: Starbucks Entry into India - Framework Analysis

This report provides an in-depth analysis of Starbucks' market entry strategy in India. It applies the Dunning OLI framework to assess the ownership, location, and internalization advantages that contributed to Starbucks' success. The report also examines the AAA framework, focusing on the dimensions of adaptation, aggregation, and arbitrage, and evaluates their relative importance in Starbucks' Indian market entry. The analysis considers factors such as market potential, consumer behavior, and the company's ability to leverage its global brand and operational strategies. The report also discusses the choice of entry mode, considering factors like resource availability and the need for control. The study draws on academic research and publicly available data to provide a comprehensive understanding of Starbucks' strategic approach to the Indian market, offering insights into the application of these frameworks in a real-world business context.

MBA GLOBAL BUSINESS

TABLE OF CONTENTS
Starbuck's entry into India...............................................................................................................3
1. Dunning OLI framework for the company..............................................................................3
2. Three dimensions of AAA framework....................................................................................4
REFERENCES................................................................................................................................7

Starbuck's entry into India.
1. Dunning OLI framework for the company.
Starbuck is the coffeehouse chain and operates in the various countries. In recent time the
company entry into India while for having their more developments. As India has become the
world largest in the economy and also the second most important in emerging the market trend
for its high gross domestic (Laitinen, 2020). The company has also offers the high products and
services to their customer while by opening the business in India and also makes sure about local
market in India. Starbuck have some technical knowledge for developing the store in having the
proper global operations. Here are some of the framework that help for company in knowing
about the activities for determining the corporations:
Ownership advantages:-
Possession explicit benefits are established in the substantial or elusive assets claimed by
a company. These assets can be viewed as giving a benefit over rivals in the unfamiliar market
furthermore, are for the most part established in the assets a particular firm controls or gets to.
Bigger firms tend to have a bigger number of assets than more modest ones with regards to
possession advantage. Perhaps the most basic asset is a brand name. Starbucks is mindful of the
worth of its worldwide image, principally that clients see Western brands as offering quality and
administration, prepared to set up a premium brand in developing business sectors. The cups fill
in as versatile announcements and extra publicizing things (Wang, 2020). The general brand
signal delight from different tangible modalities, like the incredible smell of its espresso claims
to fame and giving aurally satisfying retail outlets permitting unwinding. As it were, Starbucks
additionally sells way of life and mentality. In this manner, clients are willing to address
premium costs.
Location advantages:-
Location advantage generally concern financial, political, or institutional factors in the
focused on countries, with the end goal that nations draw in organizations to embrace esteem
adding exercises there. The more these benefits add up to the proprietorship benefit of an
organization, the more probable it is that the organization will put resources into the country.
Market potential with respect to development and size is one of the basic mainstays of fruitful

abroad tasks. The freedom to build up an economical market presence in an arising market made
India an appealing objective for Starbucks. The Indian retail espresso market is assessed at
fundamental belief with current anticipated development assessed driven by more Indians who
are profiting from a higher extra cash. Westernization and a change in utilization propensities are
extra drivers. Additionally, Indian customer disregard mental obstructions to spending RS 100–
300 for some espresso enhanced with food (STARBUCKS, 2021). Starbucks had the option to
win a few Tata organizations only as providers for India and thus accessed crude materials. This
is in accordance with the pattern for expanding the interior worth chain, restricting vulnerability
and working with feasible upper hand.
Internalization advantages:-
It is frequently utilized in light of the fact that organization issues emerging from outside
workers for hire are dreaded, for the most part grounded in exchange cost hypothesis, when
control modes are low, and the institutional climate in the objective nation is challenging.
Especially when requirement of re-appropriating contracts is enticing and expensive,
organizations notice expanding exchange costs connected to principal agent issues Starbucks'
plan of action is more cantered around administration than creation, moving its center abilities
toward capacities, like the implicit information on baristas, which are hard to move (Wang, Han
and de Vries, 2020). Nonetheless, when running an auxiliary in an exceptionally dangerous and
muddled climate, banding together with a nearby firm might be of value. Starbucks brings some
disguise benefits, while Tata brings information available, like how to maintain a business in
India, just as an essential organization.
2. Three dimensions of AAA framework.
Starbuck often have their main focus on the global strategies while through which they
can work for having the high impact on their business. In developing the business into local
market as they are must be seems for having the framework for which they can also makes sure
about the work which are must be required for them in developing the strategies towards the
customer (AlQershi, Abas and Mokhtar, 2021). Along with this, the goal for working with the
global strategy as they are required to deal with the boarders of the market and also makes sure
about the economy in which they can operates the best business plan. Here are some of the
dimension which are required to have the followed and also makes the business to be well-
developed:

Aggregation:-
Starbucks utilizes a total methodology to supplement its transformation system. The
organization intends to abuse economies of scale through fractional execution of worldwide
tasks, principally through normalizing items and administrations or gathering its turn of events
and creation measures. The collection procedure stems basically from its possession benefits that
are generally appropriate like a solid brand, representing an exceptional espresso culture and in
this way making client pull (Djedouboum and et.al.,2020). Comparable store designs have been
set up across India, what adds to a customized and yet normalized insight of utilization. Further
extension influences these cycles. Normalized activities permit the productive dispatch of stores,
effective creation strategies, and high haggling power when buying hardware and store insides.
Starbucks utilizes a similar Swiss marked espresso machine wherever as a basic asset, which is
considered as a distinct advantage. In maintaining the business with the high level of competition
as they are must be required with having the global market knowledge and also make sure about
they can focusing through primarily along with allowing for several outlets in India. As they are
must be required to focus on the economies of the country and also make sure about how they
can easily deal over the situation for which they are developing the business.
Arbitrage:-
This framework abuses contrasts between business sectors, regularly by parting cycles of
the worth chain among various areas and consequently differentiating levels of creation costs and
expertise. Starbucks sells stock from all throughout the planet in its stores, delivered in a couple
of industrial facilities (Pignot, Nicolini and Thompson, 2020). In India, a Westernized item is
sold at an exorbitant cost, while simultaneously creation data sources, for example, work stay at
a neighborhood level. The plan of action of normalized item quality in all outlets is regular of US
food and refreshment organizations. The organization has applied a similarly idea even to India.
To summarize, a Westernized item is sold at a cost over the substitutes' value levels, delivered
under ease conditions, showing slight exchange components.
Adaption:-
Making nearby specialty units in business sectors completing strides of the worth chain
autonomously is an illustration of variation for the most part utilized when organizations begin
working together external their home business sectors. This worries the difference in components
in an organization's proposal to address nearby issues. A few level of variation is essential in

each market, e.g., acclimation to the overall set of laws (Seninde and Chambers, 2020).
Generally, India said to tea-drinking country, with a low espresso culture contrasted with the
West, where espresso is regularly them for hurry refreshment. Starbucks offers worldwide
recharged items just as home grown items, with both nearby sourcing following a worldwide
brand and a local item approach.
I thought that this framework is mightily related to Starbucks for entry into India market.
This framework help for having the better customer and also makes their high profits towards the
young age people. I think that as Starbucks need to developed more strategies and also makes
their business towards many other states in India so through which they can make their high
customer ranges of their various products and services.
Figure 1 Market Entry in India: The Curious Case of Starbucks
Sources : Market Entry in India: The Curious Case of Starbucks, 2020

REFERENCES
Books and journals
AlQershi, N., Abas, Z.B. and Mokhtar, S.S.M., 2021. HOW INTELLECTUAL CAPITAL
DIMENSIONS IMPACTS STRATEGIC INNOVATION IN MANUFACTURING
SMES. Academy of Strategic Management Journal. 20(2).
Djedouboum, A.C. and et.al.,2020. A framework of modeling large-scale wireless sensor
networks for big data collection. Symmetry. 12(7). p.1113.
Laitinen, A., 2020. B2C email marketing and its future.
Pignot, E., Nicolini, D. and Thompson, M., 2020. Affective Politics and Technology Buy-in: A
Framework of Social, Political and Fantasmatic Logics. Association for Information
Systems.
Seninde, D.R. and Chambers, E., 2020. Coffee flavor: A review. Beverages. 6(3). p.44.
Wang, G., Han, Q. and de Vries, B., 2020. A geographic carbon emission estimating framework
on the city scale. Journal of Cleaner Production. 244. p.118793.
Wang, P., 2020. Dynamic Global Positioning Strategy. In The Economics of Foreign Exchange
and Global Finance (pp. 455-477). Springer, Berlin, Heidelberg.
Online
STARBUCKS, 2021. [Online]. Available through:
<https://www.coursehero.com/file/24843752/STARBUCKSdocx/>
Market Entry in India: The Curious Case of Starbucks, 2020. [Online]. Available through:
<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3518799>

1