Starbucks in India

Starbucks in India

Question# 1 Summary

Introduction of the Company - Starbucks Coffee

Starbucks Coffee Company is now among the coffee retailer giants. The company has as many as 10,000 coffee shops in more than thirty countries. Starbucks aims to become the most recognized brand of coffee. In order to achieve long term growth, Starbucks is utilizing effective marketing strategies. Currently, the company is relying on retail expansion along with the product and service innovation to achieve growth and success. In order to implement these strategies, Starbucks has opened new stores in both existing and new markets (Willmott et al, 2010). The business of gourmet coffee is at its peak. A number of players have entered into this market ranging from multinational chains to road side cafes. Specialty coffee in the United States is the fastest growing business. The credit of Starbucks' success goes to the projection of its stores. The stores of Starbucks coffee offer customers a venue where they can socialize. This strategy increased the customer base of Starbucks. A lot of customers prefer Starbucks as a place to socialize. In the following paper, we will be discussion various factors related to Indian market so that Starbucks can prepare to enter into the Indian market. These factors include currency exchange risks and business environment in India.

Question # 2 Track the currency exchange rate for the past 24 months, explain what has occurred, and identify the economic variables that have most influenced these exchange rate movements.

Indian Currency Exchange rate Trend

Currency Exchange Rate Trend

The exchange rate of India was very low; the rate stated to appreciate during October 2011 and keeps appreciating during November 2011. After November it faces some depreciation till January 2012 and begins to appreciate in February 2012. After February 2012, it keeps appreciating and gains the highest point during May and June 2012. After June it faces some depreciation but again remains stable.

Question # 3 Analyze the exchange rate risks associated with transaction, economic, and transaction exposure in the Indian market. Then anticipate what fluctuations seem likely to occur in the next 24 months.

India develops as an economy of free market, despite maintaining ancient traits autarkic policies. Economic liberalization, including the industrial sector, the privatization of public enterprises and the reduction of foreign investment controls and trade began in 1990 and served to accelerate the country's growth, which has exceeded 7% per year since the 1997. The country has the fifth largest economy in the world in terms of purchasing power parity (PPP), with a gross national product of U.S. $ 4.06 billion on 2010.

The economy of the country is diversified from traditional agricultural activities are in small towns and crafts, to a wide range of industries and modern services. Just over half of the labor force works in agriculture, but the sector of services is the most important of the country's economy, and is responsible for half of GDP national, occupying one third of the workforce. The arrival of the digital age and the existence of a ...