Is Starbucks in the right position to see success in India? While many would consider it to be a successful venture, there are skeptics that believe it will be a definite struggle.

The corporation of Starbucks is reportedly lining up for a $78 million investment to enter the Indian market.  Starbucks, a company dating back to 1971 in Seattle, just recently combined with Tata Global Beverages for a joint venture in where they plan to open outlets in India as early as October of this year. With a rapid success in China, Starbucks is hoping to replicate that business model and integrate it in the Indian market. Starbucks plans to position its brand as a location of luxury; a high quality coffee experience serving to the upper middle class. Such a move directly relates to our class on brand positioning. Starbucks is attempting to establish itself as a cool and hip spot on the grounds of India.

Is such a move a guaranteed success? Maybe not. India already holds renowned coffee huts such as Cafe Coffee Day and Costa Coffee. With such strong competitors already, brand loyalty will prove to be a tough goal to manage for Starbucks. Secondly, although Starbucks is a global icon, not everyone in India’s demographic may know about it, and thus, leads me to my next point: Starbucks faces a price-sensitive market of Indian consumers. Average incomes in India are half of those in China (in terms of purchasing power) and the number of millionaires are one-tenth. With that said, consumers may find Starbucks a bit too pricy and may turn to another alternative.

Sources:

http://www.forbes.com/sites/greatspeculations/2012/09/07/starbucks-is-finally-coming-to-india-cautiously/