Extended Essay

To what extent the joint venture between Tata Global

Beverages and Starbucks has contributed to the increase
in market share of Tata Starbucks Private Limited in
India?

Candidate Number: gwk300

Word Count: 3945

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Table of Contents
Introduction: ........................................................................................................................................... 3
Source of information:............................................................................................................................. 6
Approach:................................................................................................................................................ 6
SWOT Analysis of Starbucks Tata private Limited: .................................................................................... 8
Ansoff matrix:........................................................................................................................................ 13
Graphical representations on Starbucks India: ....................................................................................... 17
`Segregation of customers based on the income group: ..................................................................... 17
Starbucks target age group and target customer’s: ............................................................................ 17
RATIOS .................................................................................................................................................. 20
Profitability ratios: ............................................................................................................................. 20
Efficiency ratios: ................................................................................................................................ 20
LIQUIDITY RATIOS: ............................................................................................................................. 20
Product life cycle: .................................................................................................................................. 21
Marketing Mix of Starbucks (Four p’s of Starbucks): .............................................................................. 24
Marketing mix product: ..................................................................................................................... 24
Marketing mix Price:.......................................................................................................................... 25
Marketing mix Place: ......................................................................................................................... 25
Marketing mix Promotion: ................................................................................................................. 26
CSR and Ethical objectives of Starbucks: ................................................................................................ 27
Conclusion:............................................................................................................................................ 30
Appendix: .............................................................................................................................................. 33
Appendix 1: ....................................................................................................................................... 36
Income statement: ............................................................................................................................ 36
Balance sheet ........................................................................................................................................ 38
Appendix 2: ....................................................................................................................................... 42

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Introduction:

Starbucks, an American coffee company and coffee-house chain founded in 1971 at Seattle,

Washington and today is the leading coffee chain in the world. Starbucks is operating in

74countries and having 237681 outlets worldwide. It roughly had revenue of 21 billion USD and

made a profit of about 5.28 billion2 USD. Starbucks sells a wide variety of coffee, drinks and

other snacks ranging from different tastes to size with an array of different flavors on both

extremes of thermostat. Starbucks after gripping a strong hold on the coffee market worldwide

tried tapping the Indian coffee market way back in 2007 but failed and withdrew, nevertheless

Starbucks were back in January 2011, announcing their joint venture with the leading Indian -

conglomerate Tata Group.

1
http://www.starbucks.in
2
http://www.starbucks.in/about-us/company-information
3
https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&
ved=0ahUKEwjaqsuwkK7XAhWMqI8KHcJ0CkEQjRwIBw&url=https%3A%2F%2Fwww.wor

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Starbucks and Tata Global Beverage went in for a 50:50 joint venture for opening coffee-house

countrywide which is operated under the name of ‘Starbuck a Tata Alliance’. One of the main

reasons for joint venture’s success in India, is Tata Global Beverages being a local company and

one of the biggest beverage group in the nation having a first-rate knowhow of the Indian

market.

Today nationwide Starbucks Tata limited has opened 100 stores4 in the major metro cities of

India and every year there is a steady but quiet significant growth in the company. Starbucks has

been a big craze among the Indian population especially the youth, teenagers and middle-aged

working population typically because of its striking brand image, diverse menu and lucrative

interior. With the globalization the trend of coffee has increased and so coffee has started

attracting a lot of customers in India, a nation is usually dubbed as tea drinking nation.

To cater the demands, it opened many outlets but all in the metro cities of India and the reason

for this is Tata Starbucks private Limited’s high pricing. Under the present scenario, India still

being a developing country cannot afford to pay such huge prices for their services. Starbucks is

facing tough competition from Café Coffee Day who is the market leader in the nation in terms

of number of stores and customer base in the coffee business.

ldcoffeepress.com%2Ftata-starbucks-taking-indian-coffee-
market%2F&psig=AOvVaw0bABUe4gtYG3diSGrxLIQJ&ust=1510201216088605
4
http://www.business-standard.com/article/companies/starbucks-steps-up-its-india-game-
116020301281_1.html

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In addition, poor implementation of demonetization and G.S.T. has crashed the financial and

economic market of India, and as people see Starbucks as a premium coffee outlet are reluctant

to go and spend there.

Some other reason for Starbucks decline in growth rate can be because of poor economic,

financial and business environment due to demonetization and G.S.T.

Even though the prices of the product are high you cannot ignore its quality and its sophisticated

atmosphere in the outlets. Today India is the most promising country for Starbucks and will be

among the top 5 grosser for Starbucks in the coming years. Ever-since opening the first store in

the country in 2012 company has gone well about its business, tactics and strategies responding

and reacting well to the consumer’s demand and suggestions and are expecting to break even by

2021.

Therefore, my research question is:

To what extent the joint venture between Tata Global Beverage and Starbucks has contributed to

the increase in market share of Tata Starbucks private limited in India?

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Source of information:

For this extended essay I have collected both primary and secondary data giving me information

about their present position, how successful their journey has been in India till now, how

successful they were in achieving their set goals and what were their goals, what are the biggest

problems they have faced in India and how they are facing them, customer reviews regarding

their quality and overall satisfaction, how has the Tata contributed to the joint venture keeping in

mind their initial failure. All this information I will thoroughly analyze my research question.

My primary research includes:

1. Questionnaire answered by company’s employees

2. Interview of employee

3. Personal observation

Secondary research includes:

1. Online resources

2. Periodicals

3. Magazines

4. Business reports

5. Media reports

Approach:

This research is based on both primary and secondary data. The secondary research is taken from

the most reliable sources like Business times, economic times, Forbes, Tata Global beverages

official publishing’s, Starbucks official site and the analysis of India coffee market from café

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coffee day’s official publishing’s. To reduce the extent of biasness information was taken from

multiple sources.

Tools which I will use to study my research question are:

1. SWOT analysis

2. Analysis of the graphical data

3. Financial Analysis

4. Customer response

5. C.S.R. and Employee satisfaction

6. Ansoff Matrix

7. 4 p’s

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SWOT Analysis of Starbucks Tata private Limited:

SWOT stands for STRENGTH WEAKNESS OPPURTUNITIES AND THREATS.

These business tool asses the internal and external factors affecting the business and helps the

business administrators find the best strategies for the business assessing their strengths and

weakness keeping in mind in mind the external factors of opportunities and threats. With SWOT

analysis we can find the current market position of the company in the Indian market today.

Internal Factors:

 STRENGTHS:

1. Great brand image globally.

5
https://www.google.co.in/imgres?imgurl=https%3A%2F%2Fs3-eu-west-1.amazonaws.com%2Ftutor2u-
media%2Fsubjects%2Fbusiness%2Fdiagrams%2FSWOT-
Matrix.jpg&imgrefurl=https%3A%2F%2Fwww.tutor2u.net%2Fbusiness%2Freference%2Fswot-
analysis&docid=T4ECQHUz-
jrDyM&tbnid=zEWPm194IbU8EM%3A&vet=10ahUKEwjh06Lamb7XAhUC57wKHZgkDfoQMwg9KAAwAA..i&w=793
&h=313&bih=700&biw=1366&q=swot%20analysis%20ib&ved=0ahUKEwjh06Lamb7XAhUC57wKHZgkDfoQMwg9K
AAwAA&iact=mrc&uact=8

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 2. Ambience and the atmosphere of the outlets.

3. Starbucks card loyalty system, which builds relation with customers.

4. Premium quality coffee provided by Tata

5. Huge menu list with both tea and coffee

6. Complete customization of drinks.

7. High average sales per day of around Rs. 3 crore rupess6 which is highest among

all the snack and beverage stores in India.

8. High customer satisfaction.

9. Customer friendly employees

 Weakness:

1. Poor reach and accessibility.

2. Heavy pricing

3. Lack of food items in menu, and

4. Non-availability of table services.

5. Starbucks is only preferred by high income class, while most of the population of

India is middle and lower class.

External factors:

 Opportunities:

1. Glocaliztion7of the menu, by which you can localize your global menu making it

appealing for the local customers.

6
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-
sales-growth-in-india-in-last-fiscal/articleshow/60916606.cms
7
http://searchcio.techtarget.com/definition/glocalization

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 2. Big untapped market.

3. Tie up with cinema houses and entertainment hubs.

4. Increasing the reach to more towns.

5. Small per capita consumption of coffee.

6. India’s huge population of globalizing youths and middle-agers.

 Threats:

1. Tough competition with competitors like café coffee day, barista coffee etc.

2. Threat from new coffee houses as the market can be penetrated easily.

3. Low per capita income of India and on the contrary, their premium pricing.

4. Food and restaurant chain entering coffee market.

5. Popularity of local coffee shops

6. Large population still favor tea over coffee in India, tea occupies 79% 8of non-

alcoholic beverage market.

So far, so good for Starbucks as they clocked a revenue of around Rs. 272 crores and a growth of

14% around the end of March, 2017,9but to be honest it dropped sharply in comparison with last

year when it was 39%. So, Starbucks is controlled by price-sensitive market of Indian market10,

which is when any global brand enters a new regional market it gains a lot of attention but soon

stabilizes and this has happened to Starbucks in India’s. Starbucks need to syndicate their

8
https://www.forbes.com/sites/krnkashyap/2017/07/21/starbucks-is-the-company-to-beat-in-indias-30-billion-
tea-market/#e40a29537a5c
9
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-growth-in-
india-in-last-fiscal/articleshow/60916606.cms
10
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-growth-in-
india-in-last-fiscal/articleshow/60916606.cms

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strengths with opportunities to exploit the gaps in the Indian coffee market and maintain their

growth.

Starbucks can try to glocalize their menu or/and add some food stuffs in their menu, and having a

good brand image will help them to minimize their risk while doing this.

Starbucks need to eliminate their threats or need to strategize against them to increase their

market share by increasing their outlets in the country. It has been fairly successful in expanding

its operations in India in the past year.

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Ansoff matrix:

11
0

In analyzing the market strategies for Starbucks, Ansoff matrix is usually taken for study. It will

focus on firm’s potential and present products in the market for considering ways to grow

through different strategies with new and existing products as well as in new and existing

market. The four-possible product market combination we can obtain through Ansoff matrix are

evaluated below.

Market penetration-:

Is strategy of growing sales by using existing product into existing markets.

11
https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjc9-
a16NTXAhXLqo8KHQKGAe8QjRwIBw&url=https%3A%2F%2Fwww.smartinsights.com%2Fmarketing-
planning%2Fcreate-a-marketing-plan%2Fansoff-model%2F&psig=AOvVaw0xUW9g0QzqqD48gc-
HaEBi&ust=1511530592056264

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In the case of Starbucks, their scope for penetration is very minimal as, Starbucks for penetration

wouldn’t consider the option of decreasing their price, as for maintaining their high quality. So,

presently to penetrate they can think of extensive marketing, wherein they can attack their main

customers which are mostly youth and middle-age population, and market their brand in such a

way as showing some connect to them by using their global brand image.

Market development:

It is a method of growing sales of existing products into new markets.

Starbucks already have many products in their menu of coffee, tea and other kind of beverages

so this can be a good strategy for growth and increase their market share.

By doing market development company can cut cost on R&D, other heavy marketing costs

related to launching a new product.

As in India Starbucks is hardly present in only five states while, in the other states the market is

untapped and un-tested. Hence, there can be some way through for them to open outlets in other

states, or at least in the capitals of the states keeping, their cost in my mind.

States like Gujarat are untouched. Even-though the demand of coffee is less but the market can

be developed.

Product development:

Is intending to launch new products into existing markets to increase the sales.

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This might not be too helpful for them in terms of beverages as they already have lot of options

under beverages and so by adding new products will make them spend too much on R&D and

wouldn’t affect their market sales and their growth.

Product development 12 has the potential to rapidly grow sales, particularly for Starbucks, the new

food range can become a major source of revenue. Food items also help increase the spend per

customer in store, which is important for coffee outlets that are limited by the number of

customers that can be seated. Therefore, this is a more efficient strategy than increasing the

number of consumers visiting Starbucks.

Coffee market is becoming is becoming too competitive due to the presence of local competitors,

already established business and the small coffee vendors, on that other restaurants and fast-food

chains are also entering coffee business like MacDonald’s as Mcafe’.

12
https://manifestedmarketing.wordpress.com/2013/10/07/starbucks-related-diversification/

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Currently peak sales for Starbucks occur in mornings and afternoons for coffee breaks; an

emphasis on food encourages consumers to visit their outlets at meal times. Consequently, it

will be easier for Starbucks to manage their capacity and not have to use inconvenient shift

patterns.

Concluding the Ansoff matrix:

Starbucks not expanding quickly since its entry in India in 2012, it has resulted in resulted in

slowing down of their growth 14% from 39% in previous year. Their sluggishness has finished

all the craze and flare of new globally famous company entering the country and in this time,

they have not been able to capture enough market share, and the steadily the market of coffee in

India is becoming saturated. Now, strategies like market development has to be used, which will

need huge amount of advertisement costs, and product development which will soon be adopted

by Starbucks will take in a lot of risk as of their market share is not so big.

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Graphical representations on Starbucks India:

Segregation of customers based on the income group:

There exists wide disparity in the level of income of the customers’, as more 60% of the

customer's are from the upper class or the cream of the society, and the middle class and higher

middle class adds upto only 40%, and the lower class can be ignored. This is a place where

Starbuck’s need to think on as, in country like India, which has huge middle class population

contributes less than 10% of the Starbuck’s revenue.

It should also be kept in mind that their quality is of very high standards andso to reduce price

they might have to lower their quality, which is Starbuck’s is not intrested in doing as it is known

for its quality al throught the world.

Starbucks target age group and target customer’s:

Up-till now the input to starbucks sales revenue is mostly from the students, teenagers and the

office going middle aged men. Both the graphs are complimentary to each other as one shows

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the occupation of the customers’ and the other shows the age of the customer’s contributing to

the sales revenue. Contribution to Satrbucks revenue from the students, teenagers and youth is

mostly because of its big brand image, it’s awe-factor in the population and the way market is

devloped for the product as if it relates to their lifestyle, for example the coffees given by

starbcuks are trendy, flashy and attractive which gets the youth there. Office-goers and miidle

class group find peace and good quality of coffee with different variety and customization which

attracts them there.

Age group

11%
<25
25-40
34% 55%
>40

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Over here, one thing has to be kept in my mind that this people who heavily contruibute to sales

revenue, like students, teenagers and office-goers are all mostly from the upper class and upper

middle class.

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Financial RATIOS (as for the current year until march 31, 2017):

2017 2016

Profitability ratios:

Gross profit margin: 39.93 40.37

Net profit margin: 13.22 12.89

Efficiency ratios:

ROCE: 31.02 29.28

LIQUIDITY RATIOS:

CURRENT RATIO: 1.57 0.76

ACID TEST RATIO: 1.38 0.54

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Product life cycle:

13

Starbucks is there in India from last five years and this is their sixth year and they can be

considered to be still on the introductory stage and will soon be entering growth stage. This year

with Tata global beverage Starbucks’s clocked a revenue of Rs.272 crores against Rs.239 crores

previous year posting a growth rate of 14% and this year the joint venture has brought down their

net loss since their entry to Rs. 41 crores14and soon they will be on their path to break even and

on their way to growth stage as they start collecting profits from their huge initial investment in

the country.

13
https://www.google.co.in/search?q=product+life+cycle+of+starbucks+india&source=lnms&tbm=isch&sa=X&ved
=0ahUKEwjl6a_a8r3XAhUMTrwKHQVnB90Q_AUICigB&biw=1366&bih=651#imgrc=OqHYZ1OTLX6dKM:

14
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-growth-in-
india-in-last-fiscal/articleshow/60916606.cms

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Starbuck’s has not taken full advantage of their introduction stage as they could have grown

faster than this, but, their inability to expand quickly and in the many parts of their country, has

resulted in slower growth and lesser market share.

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Marketing Mix of Starbucks (Four p’s of Starbucks):

The marketing mix concentrates on four main components of the company’s marketing plan,

which are, product, price, place and promotion. Let us see what the marketing mix of the

Starbucks’s show:

Marketing mix product:

Starbucks mainly concentrates on their following main products15:

1. Coffee

2. Tea

3. Pastries

4. Frappuccino beverages

5. Smoothies

6. Merchandise (mugs, instant coffee, etc.)

They continue to innovate and adapt new things in their menu as they global trend and taste

change which has led to such high popularity of Starbucks all thought the world and the nation.

They also apply the idea of localizing the food according to the local taste so as to increase its

sale in the market. Starbucks all the product are considered premium and are of the best quality

and taste.

Products are of good hygiene and they are fresh and the presentation of their products is also

appealing which make them attractive to the customers.

15
http://www.starbucks.in/menu-list

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Starbucks has recently started innovating into snacks and lately they have ventured into selling

tea under the name of teavana 16 which are again localized.

Marketing mix Price:

Starbucks follow a premium pricing for their products, by doing so it has set aside themselves

from the rest of the coffee chains all thought the world. This pricing strategy takes advantage pf

behavioral tendency of people, which is, people tend to purchase stuffs which are costly on the

basis of the perception that the costly stuffs are of high quality.

While pricing high Starbucks makes sure that they give product of highest quality.

They also follow the idea that if people get better quality they don’t mind paying a bit more extra

and so for the company quality is the most important thing which cannot be comprised.

Marketing mix Place:

Starbucks all the 100 stores in India is right now present in the metro cities lone, which are,

Mumbai, Delhi, Bangalore, Chennai and Pune17. These are some of the fastest and most

developed cities of the country and Starbucks stores are in the poshest areas of these cities.

The presence of Starbucks in the most developed and posh region of the cities has resulted in the

high revenue per store and it is higher than any other similar stores. It is three times higher than

16
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwj5ovn
LmYzYAhVHvY8KHeh3Dd8QFggtMAE&url=http%3A%2F%2Fwww.starbucks.in%2Fmedia%2FStarbucks%25C2%25A
E%2520Teavana%25E2%2584%25A2%2520India%2520Launch%2520Press%2520Release%2520170117_tcm87-
27543.pdf&usg=AOvVaw0IdY8xFezJczH-Ff_iVjJh
17
http://www.starbucks.in/store-locator/search

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their rival Café coffee day which has Rs. 84 lakh annual sales per store while Starbucks has Rs. 3

crores per store.18

Marketing mix Promotion:

Starbuck is a firm who do not advertise on tv’s and big screen. Starbucks like to work in niche

environment and mostly follow the below-the line promotional strategies which focuses on

customer engagement. They offer many varieties of gift, loyalty card and other type of bonuses

for their customers19. Starbucks mostly relied on word of mouth which passes from one loyal

customer to another which strengthens their brand loyalty and brand awareness.

Starbucks also promote them digitally through social media, right now, Starbucks has 27 million

Facebook fans and 2 million twitter followers. 20

There should also be some change in their promotional and marketing strategy in reference to

India. They should be marketing their production tv’s and big screens and try to hire a famous

personality as an ambassador and somewhere they also need to advertise their labor friendly

relations, their CSR works and show to the command public their responsibilities for the

environment.

18
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-growth-in-
india-in-last-fiscal/articleshow/60916606.cms
19
http://www.starbucks.in/card/rewards
20
https://www.marketing91.com/marketing-mix-of-starbucks/

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CSR and Ethical objectives of Starbucks:

Mission statement:

To inspire and nurture the human spirit – one person, one cup and one neighborhood at a

time.21

Starbucks is one such company in the world who is always concerned about environment,

recycling and reducing environmental footprint and climate change. From the beginning onward,

they have been concerned about community and about their workers, whom they call partners.

Starbucks takes proper care of their farmers who source coffee for them to their employees, they

have always been considerate about all this. They believe in full transparency, starting from

selling their products to customers to their payments to workers and the working conditions for

their employees, farmers and other labor force.

They have always been committed to doing business responsibly and conducting themselves in

ways that earn the trust and respect of our customers and neighbor’s – from creating a great

workplace to ensuring that our customers have access to nutritional information on our products.

Starbucks™ Shared Planet™ means focusing on the core areas where we have the biggest

influence – ethical sourcing, environmental stewardship and community involvement 22.

Coffee sourcing of Starbucks is done in the most ethical way, while, quality is always kept at its

peak. Since 2000 Starbucks has been buying Fair Trade Certified™ coffee and has become its

21
http://www.starbucks.in/about-us/company-information/mission-statement
22
http://www.starbucks.in/responsibility/learn-more/shared-planet

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biggest buyer since 2009, purchasing about 40 million pounds (18 million kilograms) of coffee

worldwide.23

Starbucks plan to have recycling available in all of their stores by 2017, where they will control

waste collection and serve 25% of beverages in reusable cups24.

Starbucks has been building more energy-efficient stores and facilities, conserving the water and

energy we use, and purchasing renewable energy on credits, they are pushing themselves in

reduce the environmental footprint their business operations. 25

Starbucks believe that that the main reason for their success is their hard working farmers and

their employees.

Starbucks has recently extended full insurance for both part time and full-time employees, which

is a great step in building a god employee-firm relationship. 26 It has been providing flexible work

timings, proper and transparent payment, and good amount of benefits as incentives to work hard

Starbucks has planned to increase the loan capital provided to the farmer to $20million by

201627and also has decided to provide them with important facilities and support centers to make

their farming methods more greener and also to make their life better.

23
http://www.starbucks.in/responsibility/ethical-sourcing/coffee-sourcing
24
http://www.starbucks.in/responsibility/environment/recycling
25
http://www.starbucks.in/responsibility/environment/energy
26
https://www.forbes.com/sites/brucejapsen/2016/07/18/starbucks-will-expand-health-benefits-via-private-
exchange/#48e9e2c36831
27
http://www.starbucks.in/responsibility/ethical-sourcing/farmer-support

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 Employee's Response

80%

70%

60%

50%

40%

30%

20%

10%

0%
High Work culture Interactive High productivity Flexibility level
responsibilities enviroment

The employee’s response, which I collected using primary research, showed that the quality of

the work, flexibility, work culture and other factors were pretty positive with the respect to

Starbucks.

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Conclusion:

The joint venture has worked very well and performed great in India and has been the fastest and

the most promising country for the Starbucks, even their expansion or venture into China wasn’t

so fast28. The reason for the fast expansion is because of the great global and brand image of

Starbucks worldwide, and the expertise, industrial, infrastructural and, other regional knowledge

and expertise which they received from Tata because of their joint venture. Tata being the one of

the biggest and oldest conglomerate is one of the biggest and the most respected company in

India and worldwide has worked well for the joint venture.

While analyzing the different tools we find the company is doing pretty well in terms of revenue

and profits, while carrying their values and social responsibilities along with them. In a bid to

raise their partnership to a new level, Starbucks Coffee Company and the Tata Group have

agreed to take a host of initiatives, including the inclusion of coffee from India in its U.S. outlets,

bringing the coffee brand to Vistara airlines for on-board services and taking Himalayan mineral

water to Asia Pacific markets.

Starbucks this year experienced the growth rate of 14% and total sales revenue of Rs.272 crores

and bringing down their net loss to Rs. 32 crores29. In June 2015, the company had about 74

stores in India; a year later, it has 84 stores across six cities and right now it has around 100

stores, adding first 75 stores in first three years and then adding only 25 in two years. When

inquired to the representative of the country, for now, enterprise now is planning only to

penetrate only into the metro cities of the country where the stores are present since the

28
http://www.livemint.com/Companies/fiQt5sCymCdYD3J5DP0xYO/Is-Starbucks-slowing-down-on-store-
expansion-in-India.html
29
https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-growth-in-
india-in-last-fiscal/articleshow/60916606.cms

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beginning, basically going easy and risk free in the country where the middle class population is

still on rise. The countries’ GDP is on a tremendous growth rate and the per capita GDP of the

middle class is on rise which will be the new potential customers on Starbucks in the newly

developed India.

Starbucks although initially started in India as the fastest amongst all the countries, lost the title

soon in 2015-2016. The enterprise has slowed themselves down due to numerous reasons like

poor economic environment in India due to demonetization, GST and due to absence of good

population of high class population who drinks of coffee from Starbucks, which is considered of

luxury. All these things has made Starbucks decide on only penetrating in developed and metro-

cities of India. Up till now, Starbucks has established them comfortably in the country and is

ready on the launching pad for the Indian market to shoot-up. Looking at picture below we can

understand that Starbucks can easily exploit the growing conditions of the market with proper

strategies and plans.

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Limitations:

In my extended essay I couldn’t easily find the data on Starbucks Private Limited particularly for

India, as their share or India is very less.

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Bibliography:

<http://www.starbucks.in/about-us/company-information>.

<http://www.starbucks.in/about-us/company-information>.

<3. https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-

growth-in-india-in-last-fiscal/articleshow/60916606.cms>.

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media%2Fsubjects%2Fbusiness%2Fdiagrams%2FSWOT-

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analysis&docid=T4ECQHUz-jrDyM&tbnid>.

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33 | P a g e
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30-billion-tea-market/#e40a29537a5c>.

<https://economictimes.indiatimes.com/industry/cons-products/food/starbucks-posts-slowest-sales-

growth-in-india-in-last-fiscal/articleshow/60916606.cms>.

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UKEwjc9-

a16NTXAhXLqo8KHQKGAe8QjRwIBw&url=https%3A%2F%2Fwww.smartinsights.com%2Fmarketing-

planning%2Fcreate-a-marketing-plan%2Fansoff-model%2F&psig=AOvVaw0xUW9g0Q>.

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X6dKM:>.

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34 | P a g e
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expansion-in-India.html>.

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35 | P a g e
Appendix:

Appendix 1:

Income statement:

2017 2016

INCOME

Revenue from Operations 3063.89 2986.79

Other Income 96.34 111.48

Total Income 3160.23 3098.27

EXPENSES

Cost of Materials
1867.72 1888.58
Consumed

Purchases of Stock-in-
23.03 11.93
trade

Change in Inventories of

Finished Goods/Stock-in- -1.79 -3.92

trade/Work-in-progress

Employee Benefits
187.82 168.62
Expense

Finance Costs 49.1 67.71

Depreciation and 23.7 22.79

36 | P a g e
Amortization Expense

Advertisement and Sales

221.37 195.58
Charge

Other Expenses 403.09 366.88

Total Expenses 2774.04 2718.17

Profit before

Exceptional Items and 386.19 380.1

Taxes

Exceptional Items (Net) - -63.22

Profit before Tax 386.19 316.88

Tax Expenses

Current Tax 110.24 92.52

Deferred Tax -0.05 -2.13

110.19 90.39

Profit for the year 276 226.49

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Appendix 2:

Balance sheet:

As of march 31,2017

Rs. In crores

2017 2016 2015

ASSETS

Non-Current

Assets

Property, Plant 197.76 182.5 168.17

and Equipment

Investment 0.69 0.71 0.73

Property

Capital work- 11.5 10.1 11.28

in-progress

Intangible 16.03 16.05 24.43

Assets

Financial

Assets

Investm 2903.97 2624.49 3055.36

ents

38 | P a g e
 Loans 24.73 24.75 30.68

Other 21.07 20.47 21.64

Financial

Assets

Deferred Tax 38.86 73.61 28.3

Assets (Net)

Non-Current 62.89 44.64 33.28

Tax Assets

(Net)

Other Non- 76.69 74.29 74.3

Current Assets

3354.19 3071.61 3448.17

Current

Assets

Inventories 764.19 890 819.59

Financial

Assets

Investm 67.7 173.33 10.92

ents

Trade 99.62 109.7 83.11

Receivables

39 | P a g e
 Cash 13.76 59.57 4.13

and Cash

Equivalents

Other 7.02 6.3 6.05

Bank Balances

Loans 11.97 14.31 27.03

Other 26.8 40.09 32.8

Financial

Assets

Other Current 53.23 54.48 39.22

Assets

1044.29 1347.78 1022.85

TOTAL 4398.48 4419.39 4471.02

ASSETS

EQUITY

AND

LIABILITIES

Equity

Equity share 63.11 63.11 61.84

capital

Other Equity 3721.44 3373.57 3458.12

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TOTAL 3784.55 3436.68 3519.96

EQUITY

Share - - 1.27

Suspense

Account

Non-Current

Liabilities

Financial

Liabilities

Borrow - - 357.48

ings

Others - 1.25 4.64

Financial

Liabilities

Provisions 130.87 177.87 114.02

130.87 179.12 476.14

Current

Liabilities

Financial

Liabilities

Borrow 32.26 52.61 152.5

ings

41 | P a g e
 Trade 244.33 174.92 133.37

Payables

Other 88.06 467.42 80.22

Financial

Liabilities

Other Current 72.32 71.73 73.25

Liabilities

Provisions 46.09 36.91 34.31

483.06 803.59 473.65

TOTAL 4398.48 4419.39 4471.02

EQUITY

AND

LIABILITIES

42 | P a g e
Appendix 3:

Starbucks India Employee Survey:

Yes No Can’t

say

Q.1 Are proud of your service which you give at Starbucks? 12 2 1

Q.2 Are the working conditions comfortable and employee 12 1 2

friendly?

Q.3 Are you offered medical benefits? 15 0 0

Q.4 Are you offered with proper working gear? 9 2 4

Q.5 Dou you get Starbucks products at subsidized prices? 15 0 0

Q.6 Are the working conditions for women safe and comfortable? 13 1 1

Q.7 Are there enough sick leaves and holidays? 11 4 0

Q.8 Are the customer’s happy with the service and product 11 2 2

provided?

Q.9 Are the products offered made out of fresh quality materials? 13 0 2

Q.10 Are you overall satisfied with the service? 12 2 0

43 | P a g e