Chapter 8: TEACHER CASE NOTE
Brew Time:
Starbucks in the Indian Market
TEACHING NOTE
Case Overview
In January 2012, Starbucks is about to announce its joint partnership with Tata Coffee Limited
to bring Starbucks retail stores into the Indian market. John Culver, head of Starbucks Coffee
China and Asia Pacific, is on his way to a meeting to discuss any remaining issues he may have
Teaching Objectives
Intercultural Communication Course
This case was written for the Intercultural Communication course at the Mendoza College of
Business at the University of Notre Dame. Intercultural Communication is a two-credit elective
course that also fulfills a communication requirement of the MBA program.
The course examines global leadership and management from a cultural perspective, with a
Students Should be Able To
1. Identify and differentiate the cultural aspects of US, British, Chinese, and Indian cultures
2. Explain the cultural challenges that Starbucks might face in India on both a management
3. Recommend the best organizational structure for Starbucks’ management of the Indian
market expansion. Explain how it might change in the future.
Case Analysis and Country Analysis
Starbucks’ history has encouraged globalization through partnerships. Growth in international
markets has provided Starbucks with numerous opportunities to learn, increase its presence,
businesswomen.
People in the United Kingdom and US are further from Indians in terms of culture, but some
dimensions are not to be discounted. Like China and India, the United Kingdom values the
importance of a harmonious environment. Starbucks can align with this preference by
highlighting its social initiatives and framing itself prominently as the “third place,” which also
stability in the work environment. Relatedly, formal social customs are important to develop
relationships, which are valued in India’s collectivist culture. Yet, India falls into a different
GLOBE leadership category, that of Southern Asia. The implications associated with this are the
high scores for human orientation and in-group collectivism. Self-protective leadership is the
strongest style preference by the Southern Asian cluster. Knowing that the Indians respect
Questions for Discussion
1.What are Starbuck’s prior forays into the international market?
2.What are the changing Indian governmental, business, and cultural features that may impact
Starbucks’ entry?
3.What are lessons learned from these previous interactions in other cultures?
Issues to Consider
2. Localization.
4. Customer expectations based upon these similarities and difference.
More Questions
According to the Hofstede dimensions, what are the cultural differences among the United
States, Britain, China, and India that are relevant to Starbucks’ entry into the Indian retail coffee
market?
• How would a customer’s experience at Starbucks differ in each of the four cultures?
• What should Culver recommend to Schultz for where the Indian division should be located
within Starbucks’ organizational structure?
Conclusion
Expanding into each new country represents a challenge for a global brand like Starbucks.
Although there are similarities to large markets like China, attention to India’s unique cultural
dimensions could be the difference between success and failure.
The layout of the Starbucks retail locations will differ between the four studied countries as this
has to do with views on the dimensions of space and order.