Critical Issues
Critical issues are the incredibly competitive nature of the market in India, the high prices of real estate, and the prevalence of the tea-drinking culture.
Critical Facts
Starbucks has a history of success in expanding to foreign, non-coffee drinking cultures. Due to the partnership with Tata, Starbucks gained access to high-quality coffee beans (Lee et al. 119). On the other hand, the competition has proved to be stiff, with a Café Coffee Day franchise dominating the market and the appearance of new quick-service ventures (Lee et al. 120). India has always been a country with a rich tea tradition, which inspired Starbucks executives to opt for the inclusion of tea in the venture.
Analysis
The history of success in expansion to countries that are not accustomed to coffee is a factor that would allow the company to use its experience in other ventures. In Tata, the company has managed to obtain a sufficient business partner that would help crack the code to success in the Indian market by offering their products and negotiating real estate deals in beneficial spots (Fischer and Kaushik 126). The competition provided by Café Coffee Day and other coffee-drinking providers calls for decisions to be made to outshine these ventures. Due to the prevalence of tea-drinking culture, the company opted not for an excessive push coffee distribution but for the inclusion of tea in the menu.
Recommended Decisions
The success of the completion lies in its affordable pricing that comes from owning and sourcing the products locally. Hence, Starbucks should do the same. In addition, the low prices have managed to create a culture of socializing as opposed to the bars, which are considered to be inappropriate spaces for that purpose. Therefore, it would be ideal to tap into the same demographics. The focus of the company would be to provide a sense of connection to the Indian culture by promoting locally created products and inherent Indian values. Since India is an incredibly diversified country, it would be beneficial to provide menus with varying items, depending on the local culture.
Effectiveness of Recommended Decisions
The effectiveness of the given decisions is proved by the fact that India is a country that holds its values and history close to its heart. By including and emphasizing cultural values in business marketing, Starbucks would be able to create a connection with the customer. In addition, placing great emphasis on a family-friendly outlook would attract a wider range of customers with higher-paying potential.
Execution
The execution of the given plan would require a new set of responsibilities allocated to the local workforce, for example, finding or establishing local places of product processing. In terms of management actions and organizational structure, the marketing work would have to be delegated to younger people who can decide which cultural aspects are the most valuable to them. One crucial administrative action would be the protection of unique recipes created specifically for the ventures by controlling information access and distribution.
Scenario Planning
The execution phase could be hindered by the difficulty of identifying and comprehending each region-specific menu item. Moreover, complications might arise from the need to prioritize which items to include and which to exclude, as each region has several culturally important ingredients and products. This contingency would be solved by employing a marketing tactic such as allowing the customers to create suggestions for the menu for local spots.
Works Cited
Fischer, Dominik, and Kaushik Roy. “Market Entry in India: The Curious Case of Starbucks.” Rutgers Business Review, vol. 4, no. 2, 2019, pp. 124–139.
Lee, Seung-Hyun, et al. Strategic Management: Text and Cases. Marshall Islands, McGraw-Hill Education, 2021.