Page 91 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes
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Caselet Starbucks’ Expansion into the Indian Territory

S tarbucks aims to open 50 outlets in India by 2012’s end, through a 50-50 joint venture
with Tata Global Beverages, the companies said Monday.

Tata Starbucks Ltd., as their venture is known, hopes to capitalize on the rising aspirations
– and fattening wallets – of many Indians, who are eager to partake of the global latter life.
“What we are seeing is an evolution in lifestyles,” said R. K. Krishnakumar, vice chairman
of Tata Global Beverages. “In some ways the distinctions between the developed world
and the developing world are blurring.”
He said the partners would initially invest 4 billion rupees ($80 million), with the first
outlet to open in Mumbai or New Delhi by September.
Long known as a nation of tea drinkers – despite a rich tradition of coffee in the south –
India has embraced coffee house culture with a vengeance.
Last year, India had 1,600 cafes, up from just 700 in 2007, according to Technopak Advisors,
which expects India’s $170 million cafe market to grow 30 percent a year, adding up to
2,700 more outlets over the next five years.
“We’re going to move as fast as possible in opening as many stores as we can so long as we
are successful and so long as we are embraced by the Indian consumers,” said John Culver,
president of Starbucks China and Asia Pacific.
Unusually, the stores will be cobranded “Starbucks Coffee: A Tata Alliance.”

The companies will also develop a tea for the Indian market under the Tata Tazo brand.
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Last January, Starbucks signed an agreement with Tata Coffee, a unit of Tata Global
Beverages, to source and roast coffee beans in India.
The alliance with Tata could help ease one of the main burdens for retailers in India: the
high cost of real estate.
Source: www.huffingtonpost.com

Self Assessment

State whether the following statements are true or false:
10. Pizza Hut and McDonald’s have adopted the internalized expansion route.

11. International retailing satisfies the increasingly complex and demanding needs of global
consumers.
12. International sourcing can be achieved through the establishment of international buying
groups and networks.

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