INTRODUCTION

In 1991, the Indian economy experienced a rebirth after the liberalization policies of the new prime minister. Thirteen years later, India has become one of the most exciting economies in the world with a huge increase in foreign investment and consumers who are willing to spend, spend, spend! Due to massive outsourcing on the part of foreign companies especially from the United States, educated Indians are now presented with exciting career opportunities, excellent pay, and the confidence to spend more money. Time magazine reports that these new consumers command $10.5 billion in cash to burn. There couldnt be a more opportune time for the Starbucks Coffee Company to open its shops in the exotic land of India. The following is a proposal to open two new locations of Starbucks in India: one in Mumbai, a highly populated cosmopolitan business city, and the other in the nations capital, New Delhi. These locations were strategically picked to ensure success of the business venture and will serve as test locations. If the new stores are highly profitable, Starbucks can expand to more than 200 locations in India. Starbucks India locations will customize their menu to meet the tastes of their new target market. This includes the addition of more tea items taking in accordance that Indians are known to be more a tea-drinking population, as well as adding some new flavours in their coffee selection. The major competition for Starbucks at the moment is the Barista Coffee Co., which is an existing coffee shop branch in India, but Starbucks is expected to gain its market share for several reasons. The international popularity of the Starbucks brand will help the company step into the country. With superb marketing and reasonable prices, neither of which the Barrista Coffee Company is able to provide, Starbucks will take over the market, and with its assurance of quality and commitment to giving back to the community, the company will earn brand loyalty.

INTRO
Indias pop culture shows a heavy desire to follow western trend. As put simply by Indian entrepreneur Ravi Deol, Indian consumers want to do what the rest of the world is doing. The young Indians buyers want everything from McDonalds, to Levis Jeans, and Brittney Spears CDs, but whats more is that they are willing to pay for it. Indian consumers will definitely welcome the internationally popular Starbucks Coffee Company to its country, as thirty-nine other countries have. The two new proposed locations for Starbucks Coffee shops are strategically picked to ensure their success. Both Mumbai and New Dehli are home to many call centers where these younger spenders work, and many colleges and Universities are also located here. This will allow Starbucks to target the younger consumer generation with the advertisement campaign. These two cities are also major hot spots for tourists, who recognize a multinational brand such as Starbucks. The new Starbucks menu must cater to the India taste, mixing traditional menu items with those that a customized for the Indian tastes.

POLITICS
Indias government was formed in 1947 after the country gained its independence from the Imperial Britain. The Indian constitution adopted in 1950 was modeled after the United States constitution. Under this constitution, India is a federal republic, meaning its a representative democracy with power divided between the state and federal government. There also three branches including a bicameral legislature, executive branch, and judicial branch. Unlike America, the head of State and the head of government in India are different. The head of state is the President who serves more as a symbolic ceremonial figure, and has little power except for in emergency situations. The current Indian president is Dr. A.P.J. Abdul Kalam. The head of government is the prime minister and is responsible to the Indian parliament. The current prime minister of India is the Honored Atal Bihari Vajpayee. The current government of India is in favour of long-term foreign investment. In 1999, The Prime Minister called for a second Generation of reforms to include improving the investment climate, cutting red tape, a comprehensive WTO strategy, reform in agriculture and small scale industry, and better corporate governance. India's time tested institutions offer foreign investors a transparent environment that guarantees the security of their long-term investments. These include a free and vibrant press, a judiciary that can and does overrule the government, a sophisticated legal and accounting system and a user-friendly intellectual infrastructure.

ECONOMICS
India's economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of support services. India has recently emerged as a vibrant free-market economy, rejecting its previous socialist path along with the old inefficient centralized bureaucratic state. In 1991, when the Congress party gained power under the leadership of P.V. Narashima Rao, the government liberalized the number of industries open to foreign investment, loosened approval requirements and allowed majority foreign equity ownership. The economy has posted an excellent average growth rate of 5-7% since then, reducing poverty by about 10 percentage points. Management guru, Peter Drucker sees India as an economic powerhouse, and the risen GDP of 8.4% in the last quarter of 2003 supports his argument. India has large numbers of well-educated people skilled in the English language. The country has recently become is a major exporter of software services and software workers, and the information technology sector leads the strong growth pattern. With a world changing from an industrial to an informational economy, India is bound to play a monumental role in the future of the global industry. Though liberalized, economic policies for International business still have many restrictions. The most common business organization used by foreign investors in India is the locally incorporated company because other forms such as sole proprietorships and partnerships are essentially impossible under the Indian law. Companies may be public or private but the common public is not allowed to buy shares of the company and there can only be up to fifty shareholders. Import duties are applied to almost all goods entering India. The tariff system is based on the Harmonized System (HS) and tariffs are in the 40 to 60 percent range for basic raw materials, 60 to 100 percent for semi-processed goods, and 100 percent and

above on finished and consumer goods. Shipments to India require a commercial invoice, a packing list and bill of lading. A certificate of origin is not required on imports originating in the United States. The following are the foreign investment policies of India: All foreign investment projects, not considered a priority industry eligible for automatic clearance by the Reserve Bank of India, require approval by the Foreign Investment Promotion Board or a newly created committee for review of smaller investment projects. The government permits foreign firms to hold up to 51 percent equity in Indian venture on a case-by-case basis. Automatic approval is granted to foreign investments of up to 51 percent equity in 34 high-priority industrial sectors. Foreign companies are permitted to acquire land and own buildings as long as permission is obtained from the Reserve Bank of India. *No specific tax incentives exist to attract foreign investment.

SOCIOCULTURAL
With a population of about 1.03 billion people, India is the second most populated country in the world. That makes up over 15% of the worlds population even though the country only occupies 2.4% of the worlds land. The male to female ratio is 1.08, and the birth rate is 1.9%. This large population provides a huge consumer market for businesses. On average 50% of Indians are literate. The breakdown of religions are as follows: Hindu 80%, Muslim 14%, Christian 2.4%, Sikh 2%, Buddhist 0.7%, Jains 0.5%, and other 0.4%. Many Indians are vegetarian and most do not eat beef. Some of the rituals associated with normal life are the frequent relegious fasting days of the Hindus, Muslims and Parsis. The national language is Hindi and about 83% of the population speaks it. Other than that, India has 18 official languages primarily asscociated with the different states, as well as over 700 different dialects. Though English enjoys associate status, it is the most important language for national, political, and commercial communication. India has been influenced by many cultures including the English, the Iranians, Central Asians, Arabians and Afghanistani. Therefore, India itself has a very diverse culture and history. The caste system though no longer sanctioned by the government still exists to a certain extent, yet it is slowly fading away. Geographically speaking, India is located in South Asia in the Eastern Hemisphere. There are 25 states and seven union territories and New Dehli is the capital. Though most of India is rural land, there are also large Urban areas. Indias land features are as diverse as its people, ranging from the tall Himayan mountains to tropical rainforests of Jamunake. Heavy rainy season and stretches of extremely hot summers are common. The Primary target market for Starbucks Coffee Co. in India is the young both male and female from the ages of 16-38. This market is well educated and comes from middle class to upper middle class population. Since our locations are close the newly opened call centers

where well educated and highly paid consumers work, special marketing strategies will be used to gain their brand loyalty to Starbucks. The geographics of the target market are mainly consumers who live or work in the vicinity of the two proposed locations for the Starbucks Coffee shops. The secondary target markets are the tourists in the areas. Tourists will recognize Starbucks, as it is a multinational company, as most tourists in India come from the countries of U.S., England, Germany, and Japan. This market will also fall in the middle to upper middle class population and will find the Starbucks India prices relatively cheap.