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Starbucks-Tata Coffee Alliance in India

Through a memorandum of understanding, Tata Coffee and Starbucks agreed to provide roasted coffee beans in India. Starbucks aims to enter the Indian market and believes it can be an important source of coffee domestically. Tata Global Beverages can provide knowledge of the Indian market as it has experience operating there. This study examines how Starbucks can compete and promote its brand in India, where tea is preferred. Objectives include becoming a top emerging market and increasing profitability through the high-quality Arabica coffee available in India. Alternative actions for Starbucks include avoiding comparing coffee to tea, adding popular Indian teas to its menu, or attempting to greatly increase coffee consumption in India over time to match tea.

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Alyssa Mae Bona
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182 views3 pages

Starbucks-Tata Coffee Alliance in India

Through a memorandum of understanding, Tata Coffee and Starbucks agreed to provide roasted coffee beans in India. Starbucks aims to enter the Indian market and believes it can be an important source of coffee domestically. Tata Global Beverages can provide knowledge of the Indian market as it has experience operating there. This study examines how Starbucks can compete and promote its brand in India, where tea is preferred. Objectives include becoming a top emerging market and increasing profitability through the high-quality Arabica coffee available in India. Alternative actions for Starbucks include avoiding comparing coffee to tea, adding popular Indian teas to its menu, or attempting to greatly increase coffee consumption in India over time to match tea.

Uploaded by

Alyssa Mae Bona
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Objective of Tata Coffee behind this Alliance

The agreement of Tata coffee and Starbucks in India allow them to provide roast coffee

bean.

Starbucks provide new technology to the promotion of responsible agronomy practices.

Starbucks aiming to enter in Indian market through this Memorandum of Understanding.

Starbucks believe that India can be an important source for coffee in the domestic market,

that’s why they enter in India.

The knowledge and understanding of the Indian market can be brought by the Tata Global

Beverages, because it has been in this play for a while.

The Tata also have an arm in retail so there’s a synergy there as well.

Statement of the Problem

This study aims to determine how can Starbucks, a company that is known for selling

coffee, to compete and promote its brand to a country, like India, that prefers

alternative beverage which is tea.

1. How can global brand like Starbucks do maximize their chances of success in

India?

2. How will Starbucks going to advertise their coffee in India, which is a tea-drinking

country?
Objectives of the Problem

1. To be the top emerging market of India.

2. To help increase its profitability due to declining market and over dependence on

US market.

3. To have access to the high-quality Arabica coffee.

Alternative Courses of Action

One problematic challenge, in expanding Starbucks’ coffee chain into India could

present for the company, was expected strong competition to its coffee from its

traditional Indian beverage it’s the tea. There are number of alternative approaches

that a company can pursue in order to overcome this challenge:

Option 1: : Starbucks can avoid the question of competition between tea and coffee

altogether and follow the recommendation of Christine Day (president of Starbucks Asia

Pacific Group) by simply advertising its coffeehouses as places for hanging out, eating and

drinking, and seeing and being seen (Mankad and Thadamalla, 2012).

Advantages: The uniqueness of Starbucks’ outlets may temporary attract people who like

variety when it comes to the places they frequent for eating, drinking and socializing

outside the home.

Disadvantages: Starbucks will face strong competition from almost every other Indian

eatery, bar, tea shop, and rival coffee chains; which may prove overwhelming.
Option 2: Starbucks can add a large selection of various types of teas, that are popular in

India, to its menu.

Advantages: Even those Indians who only drink tea will come to Starbucks’ outlets.

Disadvantages: This approach is unlikely to allow Starbucks achieve any significant

competitive advantage as its outlets will face stiff competition from countless tea stalls that

are found on every street corner in India (Indian tea culture, n. d.).

Option 3: Starbucks can attempt to greatly increase the popularity of coffee consumption in

India, so as to make the volume of coffee consumption equal to that of tea, through various

possible methods.

Advantages: Given that around a half of all non-free beverages consumed in India is tea,

while coffee forms no more than 2% of the total consumption of non-free beverages in

India (Mankad and Thadamalla, 2012), successfully carrying out this approach, will

enormously expand India’s coffee market while allowing Starbucks to dominate it.

Disadvantages: This option is more time consuming and will require a much larger

investment of resources.

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