Cultural Differences Between Starbucks And India

Cultural Differences

India is a market that is considered to be complex not only economically but also socially and culturally to foreign investors.

When Starbucks had planned its entry into the Indian market, it noticed that the culture in India is different from that in America. India is a tea-drinking nation, people enjoy their tea and most Indian consumers did not prefer coffee. Where as for the American consumers, coffee was the preferred drink. According to market surveys, Indian people usually consumed tea about two times in a day. Coffee in India was mainly consumed in the southern part of the country. Where as in the northern states of the nation, people were not really coffee drinkers, but they would drink coffee occasionally only

The Tata group has proposed that they will cater to different products that will be available in the Starbucks, A Tata Alliance outlets that will suit the Indian tastes and preferences.

Despite the difference in cultural between India and America, Starbucks and Tata, although they are both from two different countries that have completely different cultures, they both share similar organizational values. They both care for their people. They both help in enriching and investing in the quality of lives of the communities that work for them. They also believe in practicing ethical CSR activities to help their surrounding environment. The similarities in the values that both these companies share have enabled them to work together

Both Starbucks and Tata global beverages limited have shown a keen interest in implementing CSR policies. Starbucks invested time and money in supporting Tata’s ‘Swastha’ initiative of improving the quality of life of the coffee growing community at Coorg.

5. They decided to equally share ownership and brand usage fees resulting in a 50:50 Joint Venture

The negotiation was successful in many ways because Starbucks and Tata global beverages limited share common values and objectives.

Public Statements:

Tata declared in a public statement that the Joint venture with Starbucks is in line with their inorganic growth strategy through strategic alliances. They considered the Joint venture as an exciting business opportunity that provides a different retail expertise and common understanding of business values.

Starbucks declared that they found the best strategic partner for their company in Tata. They further agreed with Tata and spoke about common business values such as earning the trust and respect of the customers and responsible business