EXECUTIVE SUMMARY
India has perennially been a nation of tea drinkers with the coffee industry in a nascent stage of development, which is expected to grow at 70% between 2011 and 2016.

TGBL, the leading supplier of Arabica Coffee Beans, gave Starbucks access to a huge customer market which is turn helped it boost its revenue earnings. Tata Group, being the largest company in India, understood the modalities of the economic and political structure of the nation. Much of time, effort and resources of Starbucks were saved through this alliance. Additionally, TGBL being an established player in this industry undertook the supply chain management of the alliance that brought down costs significantly.

However, the advantages of the joint venture can be easily marred owing to the different management cultures in the two organizations. The high degree of mutual interdependence could paralyze the operations of the alliance if either side fails to execute its respective tasks. Further, both companies have equal clout in the industry as a result of which there could be possible clashes with respect to sharing of revenues and other variables.

However, the opportunity to tap into the massive consumer market and having the larger slice of the growing coffee industry clearly outweighed the threats posed by the existing local coffee chains and the uncertainties of the market and joint venture. The economic and political landscape of India is unique and having TGBL on board would help Starbucks transverse that with relative ease. The social expectations of the Indian market would be better fulfilled by this venture because Tata group is entrenched within the hearts and minds of the Indian consumers. A better understanding of the needs of the consumers would better help Starbucks to provide for the necessary arrangements in terms of menu, social experience etc.

We developed a business model to evaluate whether Starbucks could enter the Indian market all by itself. The various parameters used for the evaluation ranged were Political and Social Stability, Culture, Innovation, Judicial System and Law Enforcement, Market Potential, Human Development, Tax Rates, E-Readiness. India registered a score of 3.8 and ranked 7 out of 9 Asian Countries used in the model, which shows that venturing into India alone will not be highly advisable. Other reasons why Starbucks needed a sound local partner like Tata include high real estate costs, high import duties, the need for local knowledge and the competition from the home grown coffee chains.

Therefore, our key learning points are that irrespective of the size of a company, it needs to adjust to the local tastes and preferences of the consumer market and this is the pre-requisite for a successful venture abroad. Having a local partner adds that completeness to the understanding of the foreign company.

McDonalds, the largest consumer of beef and pork in the world, shunned the two meats in its India operations because of the sensitivities of the Indian consumers. The line that summarizes our learning is when in Rome, do as the Romans do.