Question

Case 23 - Starbucks

Introduction

Starbucks has had varying degrees of success as it expanded into international markets. This case chronicles their experience, as they expanded into India.

What is your recommendation for “Tata Starbucks” going forward? Should they use a strategy that is modified for the Indian market or should it pursue the same strategy it has in all other international markets?

Answer 1

In my opinion, Starbucks should continue with the same strategy in India too that they are having in all other international markets.

It is essential for them to maintain 'premium' image of its own brand. Competition already exists in the form of Barista, Cafe Coffee Day and other local coffee chains. Starbucks aims at upper class and high net worth individuals.They should continue to aim at them.

They can target slightly low income segment(youth and professionals) by launching promotional schemes suiting their budgets and can launch products that suits Indian tastes and on this name a slightly lower prices can be offered.

However, they should not come down very much in terms of pricing or else, a brand conscious and superior mentality customers may go away.

Hence, promotions, loyalty benefit programs and new products may be the strategy.