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Transcription of this question: 5.Starbucks • and Tata CoffeeStarbucksf is a multinational coffee shop chain based in the United States (US). Starbucks* is indiscussions with Tata Coffee, an Indian company, about opening Starbucksv coffee shops in thefast-growing Indian market. The Indian government limits the entry Of foreign-owned retail chainsinto India.Tata Coffee grows and sells its own coffee. It is owned by Tata Group, the largest Indian businessconglomerate*. Starbucksv and Tata Coffee are considering forming a strategic alliance or ajoint venture. For the past seven years, the two companies have done business with each Other.Starbucksf has purchased coffee from various suppliers in India (for its coffee shops in Europe andthe US), including from Tata Coffee.Forming a strategic alliance or a joint venture with Tata Coffee will allow Starbucksr to enter theIndian market. Additional advantages for Starbucksu include:• Starbucksv could open coffee shops inside hotels of the Tata Group’s nationwide hotel chain• Tata Gmup would consider allowing open coffee shops in the numerous retail chainsthat it owns.Coffee has long been popular in southern India but not in the north. Over the past decade, however,consumption Of coffee in the north has increased significantly, as new coffee shop chains with morechoice, appeal to young Indians with disposable income. India (with its population of over 1 billion)is developing fast (with a growth rate Of8 % Of its GDP this year). Starbuckse has carried out researchand found that the global brand name “Starbucks*” is already well-known in India, although there areno Starbucksf coffee shops there yet.The competition in India is intense. Café Coffee Daye, an Indian company, dominates the market.An Italian company owns the Other big coffee shop chain, Barista(Source: adapted from “Starbucks to broaden dealings in India”. International Herald rribune, 14 January 2011conglomerate: a company that is made up ofa number of different u-nnpanies and business that is typically indiversified fields and, Otlen, different sectors of the economy(a)(b)(c)(d)(e)Define the term multinational company.Explain the importance Of branding for the decision Of Starbucksr to enter theIndian market.Explain one PEST factor that may influence the decision Of Starbucksr to enterthe Indian market.Analyse one advantage and one disadvantage for Tata Group (owner OfTata Coffee) Of forming a strategic alliance with StarbucksrDiscuss the decision Of Starbucksr to enter the Indian market.[2 marks][4 marks][2 marks][5 marks][7 marks]

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