Starbucks took a decade to decide to enter the Indian market
In 2012, the first Starbucks locations established its stores in New Delhi and Mumbai, India. Actually, Starbucks spent ten years on the plan of entry to Indian market. As for the reason of Starbucks taking one decade to enter the Indian market, I think one of reasons is that U.S fell into financial crisis in last decade, which caused the global economic downturn. So many companies put off or cancelled out on plan of strategic alliances, including the Starbucks.
Secondly, Indian government was increasingly frustrated by many economists and corporate executives for the slow pace of decision-making on foreign investment.? That is a problem of administrative distance. For instance, as early as in 2005, Starbucks intended to explore the Indian market, but the application was rejected by India’s Foreign Investment Promotion Board (FIPB). Under the development of globalization, Indian government found that they should not be self-enclosed any more. Due to the backward of warehouse and logistics system, Indian agricultural products as retail lost much money per year. Then at the end of 2011, the Indian government decided to open retail market to foreign supermarket giants for learning the operation of modern retail enterprise system. It was the best time for Starbucks to enter into Indian market.
What’s more, Starbucks have to face considerable challenges in India. Since Indian market is dominated by Cafe Coffee Day, which is owned by an Indian coffee conglomerate based, especially popular with the country’s youth, has around 1,350 outlets and is the current market leader.? And more chains, including Barista and Costa Coffee, have also set up themselves. Despite all this, Starbucks obviously have no reason to ignore the Indian market with growth of coffee consumption per year as well as about 1.2 billion consumers. It has huge space of its growing middle class and a large youth population for development…