INDIA – CZECH REPUBLIC


STARBUCKS
 OBJECTIVES
 To develop a good base for the future in this
challenging market.
 To establish a consistent brand globally.
 To develop a niche position with year on year
growth of 5% for the next 5years.
 To secure long term profitability.
 Budget is £2.5million.
 STARBUCKS COFFEE COMPANY
 Founded: 1971 in Seattle, USA
 Main activity: Starbucks sells coffee, tea, food
Confectionery, Smoothies and pastries
through its specialty operations
 Subsidiaries:

Tazo Tea Company

Seattle's Best Coffee
Torrefazione Italia
Hear Music
Ethos Water
GLOBAL PRESENCE

Present in 49
countries
Global presence in
green
 STARBUCK‘S FIGURES
In US $ in 2008

Revenue: 10.383 billion

Operating income: 503.9

million

Net income: 315.5 million

Total assets: 5.673 billion

Gross Profit Margin:

57.5 %

Employees: 176,000
PERFORMANCE (REVENUE)
GLOBAL COMPETITORS
 INDUSTRY

 Beverage Industry
- Falls in largest disposable income spending

segment

- Steady growth in the segment in Europe and Asia

- Growth in restaurant and coffee culture

 Industry Analysis – Czech
Republic

• Market structure
- Oligopolistic competition ( Few companies
dominate)

• Competitive activity
- Moderate competition

- Location, Product innovation, local adaptation,

Competitive Pricing and Promotion are important
 PESTLE Analysis (Czech)

• Political
- Close business ties between the US & Czech
Republic
- Stable political conditions
- EU Member (2004)

• Economic
- Stable economic growth of about 3% per annum
- High GDP($261.777 billion)
- Good per capita income resulting in more
disposable income($25,118)
 PESTLE (CZECH)

Social
High number of working class
Consumers like value for money
Dense Population in Prague (132/km2)

Technological
Technology lowers operational costs
 PESTLE (CZECH)
Legal
No major legal barriers
Fair trade

Environmental
Lot of water is required for the production of
coffee
 INDUSTRY ANALYSIS(INDIA)

Market structure
- Oligopoly (Few competitors)

Competitive activity
- Moderate competition
- Location, Competition is in Pricing and
Promotion
 PESTLE (INDIA)
Political Economic

- Close business ties - High economic growth 6%

between the US & p.a
India - High GDP $2.965 trillion
- Largest middle class
population
- Stable political - Economy is based on
conditions Services.
- High consumption of tea
(70.2% of the market)
 PESTLE (INDIA)

Socio-cultural Technological
- • High Technology
Consumer preference for
value for money
- Price sensitive population
- High population density
 PESTLE (INDIA)
Legal Environmental

- Fair trade - high levels of

- No major legal greenhouse
barriers gases.
Low access to water
 PORTER 5 FORCES
(CZECH)
Supplier
power (1)

Threat of
Barriers to
Rivalry (2) substitute
entry (2)
(2)

Buyer
power (3)

1----------2----------3----------4
Low Medium High
PORTERS 5 FORCES, INDIA

Supplier
power (1)

Threat of
Barriers to
Rivalry (2) substitute
entry (1)
(3)

Buyer
power (3)

1----------2----------3----------4
Low Medium High
 MARKET ANALYSIS (CZECH)

 Accessibility:
The market is fairly accessible since FDI is encouraged
Main language is Czech but English is also spoken.
High bureaucracy in public administration.

 Competitive threats
Buyer Power is very high in the market

 Potential profitability
The prospects are high, Czech has a high number of travelers and tourists to
Prague and Bohemia and there is high middle class.

Risk Analysis (BERI INDEX)

 BERI index 72( average conditions)
 MARKET ANALYSIS INDIA
 Accessibility:
The market is fairly accessible, Language is predominantly English
Inefficiencies in public administration

 Competitive threats
Buyer Power is very high in the market

 Potential profitability
The prospects are high, has a high number of travelers and tourists.
Population density in Delhi, Agra and Mumbai.

Risk Analysis (BERI INDEX)

BERI index 72( average conditions)
 MARKET SIZING

INDIA Czech
2008 2013 2008 2013
$31.5M $652,000
 CONTEXT AND DIFFUSION
RATE
Diffusion

FAST SLOW

HIGH CZECH INDIA,

Context
LOW USA

This is useful for Marketing Communication

 Hofstede’s Variables

HOFSTEDE’s UNITED INDIA CZECH

VARIABLES STATES
INDIVIDUALISTIC HIGH LOW(COLLECTIVE) MEDIUM

POWER DISTANCE LOW HIGH HIGH

UNCERTAINTY LOW HIGH MEDIUM

AVOIDANCE

MASCULINITY MASCULINE MIXED BUT MORE FEMININE

TILTED TOWARDS
MASCULINE

Useful for marketing communications, as well

as marketing mix strategy
 SEGMENTATION
CZECH INDIA

Target market: • Target market: Tourists,

Tourists, travellers, young travellers, young western
western oriented generation, young
oriented generation, young business professionals and
business university students.
professionals and University
students
Target cities:
• Dehli, Agra and Mumbai
Target cities: Prague , Ostrava,
Bohemia regions

• Target areas within these

Target areas within these cities:
Airports, train stations, tourist
attraction places, business
centres,
cities: Airports, train
stations, tourist attraction
places, business centres,
motor way stops
 MARKET POSITIONING
 Starbucks is more than just COFFEE, it is a
UNIVERSAL EXPERIENCE for the customer.

 Starbucks a social gathering place and good

for networking.

 Starbucks provides an escape into relaxing,

peaceful environment
MARKETING INFORMATION SYSTEM
 Given the budget of only £2.5m, the preferable
sources of marketing information are:
 Qualitative:
 Personal sources including government employees and
consultants,
 Customer records

 Quantitative:
 Primary Data collection through research.
 Data generated at the points of purchase from Starbucks;
 Data derived from marketing campaigns.
STRATEGY
Wholly owned subsidiary ( Czech Rep.)
 Less risky, more control

Licensing ( India )
 Good for sharing risk.
 STRATEGY AND BRANDING
INDIA  CZECH

Promotions will capture world Promotions will capture

class world
service, Class service,

Indian adaptation, focus on Czech adaptation, focus on

nutrition and
nutrition and
Value. Endorsement by
Bollywood Stars Value. Endorsement

Special promotions during Special promotions during

festivals, festivals, Sports events
Cricket tournaments tournaments
THANK YOU