Tata Starbucks CEO: Our business in India continues to exceed expectations | Business Line Tata Starbucks CEO: Our business in India continues to exceed expectations Anil Urs Tweet Avani Saglani Davda Avani Saglani Davda, the CEO at Tata Starbucks Ltd since September 2012, has played a key role in the development of the joint venture between Tata group and Starbucks Corp, which runs the world’s largest coffee chain. The company recently entered South India by opening a coffee outlet in Bangalore. In an interview with Business Line, Davda shares the joint venture’s plans for the India market. Edited excerpts: Now that you have entered South India, how many stores are you planning in this region? In addition to the flagship store at Koramangala (Bangalore), Tata Starbucks will open two more stores by the end of this year in Bengaluru. It is an important city entry that demonstrates our long-term commitment to expand across India and we will continue to work thoughtfully to build a strong foundation and open stores quickly. The South is primarily a coffee drinking market. Can we expect any specific flavour for both food and beverages here?

We are committed to delivering a locally relevant Starbucks experience to our customers; one that reflects the Starbucks brand as well as India’s rich culinary heritage. Our store here in Bangalore will introduce a strong mix of international favourites as well as specially designed food offerings to reflect local flavours. Additionally, our store offers a broad beverage portfolio to include a wide range of Starbucks signature espresso-based beverages and Starbucks VIA Ready Brew. We will introduce the India Estates blend to consumers in Bengaluru. This blend is Tata Starbucks’ special country-specific coffee, developed thoughtfully with Tata Coffee for the Indian market and reflects the high quality Arabica coffee available in India. Created to celebrate our first anniversary in the country in October 2013, this coffee captures the essence and rich heritage of the Indian coffee history. Additionally, with our entry in the Indian market, we launched the Indian Espresso Roast which is sourced locally through the coffee sourcing and roasting agreement between Starbucks and Tata Coffee. What will be the price range of the food and coffee at the India stores? We strive to price our products competitively based upon the assessment of how we can provide high-quality products and an uncompromised experience.

We understand how important it is to our customers that they receive a high quality experience at an appropriate value, and we believe that our approach to value holistically balances the experience we provide customers with our need to effectively run our business. You had a target of 50 stores in 2012. Are you revising this number? Since our foray into the Indian market in October 2012, we have launched 30 stores across Mumbai, Delhi NCR, Bengaluru and Pune. We are overwhelmed by the way in which our customers have embraced us. With a little over one year of being in operation in the country, I can assure you that our business in India continues to exceed our expectations. We work to balance the need to run the business effectively while ensuring that we deliver the highest-quality Starbucks experience to our customers. It’s not only about running several stores across the geography, but to nurture each store to provide the experience and deliver the brand promise to customers – every day. What kind of investment you have planned for 2014 in India? When do you plan to break even?

We are committed to India for the long-term and the JV will invest long term in the development of our partners (employees), coffee growing communities and the neighbourhoods we serve. Our business in India continues to exceed our expectations and we remain focused on a long-term, disciplined growth in this dynamic market to establish a strong presence here, delivering an elevated coffeehouse experience to our customers in India. What has been the experience so far? Are you revising your footprints here? Our journey over the last year has been very gratifying and the venture has attracted acclaim from Indian consumers. This journey has only just begun and we will continue to work to exceed the expectations of our customers. We are confident in our ability to build and grow the Starbucks brand in India, and continue to remain excited about the opportunities India presents for our business. (This article was published on November 27, 2013) Related Indian telecom sector - Free Finance Essay - Essay UK Indian telecom sector EXECUTIVE SUMMARY The Indian telecom industry is the fastest growing industry with an addition of 9- 10 million monthly subscribers. The Indian telecommunications network with over 375 Million subscribers is second largest network in the world after China.

Major players in this sector are BSNL, MTNL, Airtel, Vodafone, BPL, Tata, Idea, etc. Buyer power and threat of rivalry is very high in Indian Telecom Sector. Both these factors are formidable. This could be reason of consolidation in the industry. Companies try to reduce threat of rivalry by merging or buying out rival companies. Telecom sector is one of the integrated parts of economy of any country and the Government regulatory and policy initiatives have also been directed towards establishing a world class infrastructure in India also. It provides an ideal environment for the investment but it also has a very complex structure. The challenges imposed on the Indian telecom market are increasing day by day because of the new technologies and knowledge. The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry. The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. Despite the gloomy outlook owing to the global recession/slowdown in the economy, the telecom sector of India continues to attract record number of new subscribers.

The Indian mobile phone operators have been adding about 8-10 million subscribers every month throughout this year, and the figure has regularly topped the 10 million mark during the last three-four months. Considering the current pace of fresh additions per month, India has the potential of taking the total tally of subscribers to 700 million in the next five years from the current level of about 350 million, second only to China. INTRODUCTION TO INDIAN TELECOM SECTOR India's telecom sector is one of the world's fastest growing sectors. The industry has maintained its growth momentum despite a slowdown seen across various sectors. India has crossed the 500 million wireless subscriber mark in November last year. With the increase in the number of players and reduced tariffs, this number is expected to soar. Overall tele-density has touched 46.32, a whopping 250% jump in the last four years. The rapid growth in Indian telecom industry has been contributing to India's GDP at large. Telecom industry in India started to set up in a phased approach. Privatisation was gradually introduced, first in value-added services, followed by cellular and basic services.

Telecom Regulatory Authority of India (TRAI) was established to regulate and deal with competition (the service providers). This gradual and thoughtful reform process in India has favoured industry growth. Upcoming services such as 3G and WiMax will help to further augment the growth rate Telecom Industry Sectors From holistic point of view telecom industry can be divided to four sub-sets. The major forces in Indian telecom industry are Service providers. All major telecom equipment suppliers have their R&D centres in India.

In last 5 years, global giants in mobile devices have set up their manufacturing facitilities in India MAJOR PLAYERS IN INDIAN TELECOM INDUTRY There are three types of players in telecom services: State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices, Shyam) -Foreign invested companies (Vodafone, Aircel, Bharti Tele-Ventures, Escotel, Siestema Idea Cellular, BPL Mobile, Spice Communications) 1.4 TELEPHONE SUBSCRIBER BASE The number of telephone subscribers in India increased to 581.81 Million at the end of January-2010 from 562.21 Million in December-09, thereby registering a growth rate of 3.49%. With this, the overall Tele-density in India reaches 49.50.

1.4.1 Wireless Segment (GSM, CDMA & FWP) Wireless subscriber base increased from 525.15 Million in December-09 to 545.05 Million at the end of January-2010 at a monthly growth rate of 3.79%. Wireless Tele-density stands at 46.37. Wireless Service: A. Service Providers' share in net additions during the month SOURCE: B. Service Provider wise Market Share as on 31-1-2010 Bharti-Airtel leads the wireless market with 22% market share. The company recently achieved the magic figure of 100 million subscribers. However, Bharti-Airtel expects a bloodbath in the Indian telecom market in the near future, and is looking to spread its risks by entering new geographies .With 12-13 players present in the market there would be a severe pressure on margins. Be it an Aircel or Etisalat, the new operators would not remain fringe players in the Indian market, but would try and rock the applecart of existing operators. The growth in Indian market could start tapering off very soon.

According to an industry expert the subscriber base will not expand beyond 800 million in coming years from current number 400 million. Also, ARPUs in India have steadily falling ($5-$6). There have been talks about 3G and IPTV pushing growth, but it all seems far-fetched. The third generation of mobile services (3G) will be used by telecoms to gain more spectrums. Besides, the services will be used only in urban areas. 1.4.3 Wireline Segment Wireline subscriber base declined from 37.06 Million in December-2009 to 36.76 Million at the end of January-2010. BSNL/MTNL, two PSU operators hold 84.96% of the Wireline market share. However, they lost 0.36 Million subscribers in the month of January-2010. Overall Wireline tele-density is 3.13.

Service Provider wise Market Share as on 31-1-2010 SOURCE: 1.4.2 Broadband (≥ 256 Kbps download) Total Broadband subscriber base has increased from 7.83 million in December-09 to 8.03 Million in January-2010, there by showing a growth of 2.42%. POLICY INITIATIVES The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry. 100% foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing FDI ceiling in telecom services has been raised to 74% Introduction of a unified access licensing regime for telecom services on a pan-India basis Plan to introduce mobile number portability in a phased manner The government is implementing a program of connecting 66,822 uncovered villages under the Bharat Nirman programme. The government will invest US$ 2 billion to set up 112,000 community service centres in rural India to provide broadband connectivity in 2008-09.

The Department of Telecommunications (DoT) has stated that foreign telecom companies can bid for 3G spectrum without partnering with Indian companies. Only after winning a bid, would they need to apply for unified access service licence (UASL) and partner with an Indian company in accordance with the FDI regulations MAJOR INVESTMENTS IN INDIAN TELECOM SECTOR The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. Buoyed by the rapid surge in the subscriber base, huge investments are being made into this industry. The Russian government picked up equity amounting to US$ 670 million-US$ 700 million in Sistema Shyam TeleServices Ltd (SSTL), a joint venture between Russia-based telecom major Sistema and Shyam Group in India, by the end of this financial year. SSTL is also planning to invest US$ 5.5 billion over the next 5 years in India. Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion.

Japanese telecom major NTT DOCOMO acquired a 27.31 per cent equity capital of Tata Teleservices for about US$ 2.6 billion in November 2008. Bahrain's Batelco has signed a deal to buy 49 per cent in Chennai-based S-Tel, a GSM service provider, for US$ 225 million. BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project. Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile subscriber base from 40 million at present to over 100 million. Telecom operator Aircel, which launched GSM mobile services in Bangalore in February 2009, plans to invest US$ 220.58 million over the next year to set up base stations across the state. REVIEW OF LITERATURE Jain (1993) analyzed that in response to the business needs of faster, cheaper, and more varied modes of communication, the telecommunication sector in many countries has been undergoing rapid technological and structural changes over the past few years.

Since the mid 1980s, the telecommunication sector in India, too, has undergone major transformations. Private participation in the manufacture of end user equipment and services, reorganization of the monolithic Department of Telecommunication, and raising finances from the public for investment in the state owned factories and organizations have been some of the policy initiatives of the government. The Indian telecom sector is characterized by under-investment, amalgamation of regulatory and operational functions, ill-defined sector policies, and lack of financial and administrative autonomy - features which are common to many other developing countries. In such a scenario, the consequences of sectoral changes have implications both for decision makers at the national level as well as in other developing countries. The policy changes initiated by the government and the lessons to be drawn from India's experience are reviewed. Monie (2002) stated that India is the great big oasis most multinational corporations are looking to as they consolidate their position in Indian companies. This was evident during the past year where foreign players accounted for approximately 35% of the value of Indian acquisitions. The telecoms sector dominated the M&A scene accounting for 24% of all deals done last year.

The Batata-BPL telecom deal ($662 million) represented 10% of all deals done during 2001. This study show that M&A deal requires active management of desired business synergies, market prospects, price, structure, negotiations and human resources. However, before considering an M&A the acquirer would need to consider the legal and tax aspects of the deal. Singh (2005), stated the role that information and communication technologies are playing for Indian society to educate them formally or informally which is ultimately helping India to emerge as an information society. Though India has a huge population, the illiteracy rate is also huge in this country. The paper has taken an approach to find the historical situation and present the prevailing scenario as well as the change that are taking place with the application of ICT to the advantage of the society in different areas including daily life. India is making all out efforts to be counted among the developed nations of the world. The article also describes the considerable attention India is taking for application of technology, development of infrastructure and human resource for meeting national needs. Basically India is building an information society. Technology has helped society to cut across the traditional boundaries for getting converted into an emerging information society.

The study concludes that The Indian software and services industry has significantly helped to boost the Indian economy. In IT-enabled services too, India has been clearly perceived to be the dominant hub. The Indian software sector is being recognized as the single largest contributor to incremental market capitalization in India but the sector is still small in terms of contribution to GDP, especially when compared to other large sectors in the economy like agriculture and manufacturing. Similarly, the telecommunication sector has contributed a lot but still has a considerable way to go. The paper also enforces that comparisons of India's telecommunication statistics with those of developed and other emerging economies show that the country is still far behind its contemporaries. Kokil et al. (2006) emphasized that the Telecom sector is one of the integrated parts of economy of any country and the Government regulatory and policy initiatives have also been directed towards establishing a world class infrastructure in India also. It provides an ideal environment for the investment but it also has a very complex structure. The challenges imposed on the Indian telecom market are increasing day by day because of the new technologies and knowledge.

India's 21.59 million-line telephone network is one of the largest in the world and the 3rd largest among emerging economies (after China and Republic of Korea). Given the low telephone penetration rate -2.2 per 100 people of population, which is much below the global average, India offers vast scope for growth. There is great need of Indian Telecom companies to be flexible. This paper basically deals with the different kind of flexibilities and types of flexibilities exist in any company. Here, basic research is done for two Indian companies that are Bharti Tele-Ventures Limited (BTVL) and Bharat Sanchar Nigam Limited (BSNL) and this shows how any company do well in market if it is flexible. Gupta (2008) stated that even there was slow down in the market but merger and acquisition were happening in the telecom sector, it showed that it is only sector which is on boom .the main thing is it's also boosting the Indian economy.

near about 20 deals has done in telecom sector and worth $9.15 bn The study reveal that maximum of the telecom deals were inbound with foreign companies infusing money to the tune of $ 8.065 bn .in order to gain ground on the on the Indian soil during April to November 2008 merger worth $676 million was announced. The main considerable thing is that there is not any effect of Global liquidity Crisis on the telecom sector. Indian telecom market is fastest growing market in the world in 2008 the growth of telecom sector was near about 70 %. And cellular companies add their 26.1% subscriber in that year though there was liquidity crunch in the market. The telecom sector showed their 30% growth in September 2008. Narayana (2008) estimated the contribution of telecommunication (or telecom) services to aggregate economic growth in India. Estimated contribution is distinguished between public and private sectors to highlight the impact of telecom privatization on economic growth. Knowledge of policy determinants of demand of telecom services is shown to be essential to enhance growth contribution of telecom services.

Using a recent sample survey data from Karnataka State in South India, price and income determinants of demand for telecom services are estimated by capacity of telephone exchanges. Estimation results offer evidence for significant negative own price elasticity and positive income elasticity of demand for telecom services. Mani (2008) addressed a number of issues arising from the growth of telecom services in India since the mid-1990s. It also discusses a number of spill over effects for the rest of the economy and one of the more important effects is the potential to develop a major manufacturing hub in the country for telecom equipment and for downstream industries such as semiconductor devices. The telecom industry in India could slowly become an example of the service sector acting as a fillip to the growth of the manufacturing sector. A beginning towards this has been made. The formation of a Telecom Equipment Export Forum and the announcement of the Indian Semiconductor Policy 2007 are steps in this direction. Success crucially depends on the response of the private sector to these incentives. Given the importance that a regulatory agency can play in this crafting, no effort should be lost in strengthening the powers of the TRAI.

The benefits to the Indian economy from having both a strong services and manufacturing segments in the telecom sector cannot be undermined. Debnath et al. (2008) stated that Technological modernization is increasingly viewed as a premeditated necessity in today's era of growth and prosperity for any country. Telecommunications has entered a new age of development with advanced technology and increased competition with established players. The technological advances in the telecommunication sector are associated with an uninterrupted growth of the mobile sector. The prime focus of the service providers is to create a loyal customer base by benchmarking their performances and retaining existing customers in order to benefit from their loyalty. The paper aims to address these issues. This paper employs the method of data envelopment analysis (DEA) to compare the relative efficiency of mobile service providers in India. The identification of the strongest and the weakest service providers could be very useful in improving their efficiency and performance. Mathematically, DEA determines the best weights for each input and output for a particular unit under study so as to maximize its relative efficiency. The results are insightful to the telecom policy planner as benchmark them in terms of their efficiency. It also identified the inefficient service providers who can improve their efficiency by making the efficient providers as their role model.

This research paper contributes to the literature in two ways: firstly, this research identifies the different parameters for the mobile service providers in India for the benchmarking of the service providers. It also categorized them into various input and output parameters contributing towards the number of subscribers for different service providers. In the next stage, this research takes a further step and examines whether there are differences between the number of subscribers and the performance of the service providers. Benchmarking of the service providers would depend on the efficiency and quality of service. There is still great diversity in the relative performance of various service providers, which is a matter of concern to the telecom planner in this country. Srinivasan (2009) stated that India is the fastest growing economy post its liberalization and globalization activism and Asia's third largest economy behind Japan and China. India's telecom density is not so high as compared to the western market. Many companies are easily attracted to the telecom sector and are interested in investing large amount which is good for both the telecom sector as well as the economy of the country. India's telecom market is the fastest growing investment pocket in the world.

By 2010, it is expected that the investment will be around $24 billion and that the total number of subscribers to be around 500 to 600 million. Bharat Sanchar Nigam Ltd, Reliance Communication, Tata Teleservices, IDEA Cellular, Vodafone Essar and Bharti-Airtel are interested in investing further in the sector between $12 million to $15 million in 2009-10. Mishra (2010) stated that the economy of India has grown leaps and bounds during the last few years. The growth is eminent and is a motivation for targeting growth despite the challenges of global economic environment. The phenomenal growth of the industrial and services sector has been the real thrust creator in the aspiring Indian economy. Against this background, to give a further fillip and to sustain the past performance, infrastructure bottlenecks are posing challenges. There is a substantial lacuna between the desired and the actual availability of the infrastructural facilities in the country. Besides inadequacy, the other emerging challenge is unequal availability of the facilities across the country. One such vital area of physical infrastructure is the telecommunication services.

The telecom sector has grown at a furious pace over the last decade but still there are constraints. The rising inequality in the availability of services in urban and rural areas is also a matter of concern, as it is creating a digital divide. This paper analyzes the growth and inequality in the availability of telecommunication services in the country and the role of Eleventh Five Year Plan in providing the required thrust to the sector's future growth and bridging the digital divide. OBJECTIVES OF THE STUDY: To analyse the industry telecom sector through the application of Porter's Five Forces Model. To analyse the attractiveness of the Indian Telecommunication Industry for Investment purpose. METHODOLOGY Always enhancing the customer service. Entry in new market segment as well as new geographical area. Keeping the price of product and service according to demand and needs of different section of the society. Always providing something new and extra in terms of product and service. SUGGESTIONS Should focus more on new rural area where tele density is very low and competition is less. Make strategic alliance with equipment supplier so that become a market leader in the terms of technology. FORCE 2: THE THREAT OF NEW ENTRANTS (LOW) Both potential and existing competitors influence average industry profitability.

The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents' position. The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows: 1. Well Established Brands: Pressurizing the government to make the policy tough for new competitors. New offer for current customer in terms of price and service. SUGGESTIONS Since tele density is still around 21% therefore telecom companies have to try to those market which is still untapped by the other telecom companies. Keep their technology up to date so that they should always offer something new to their existing customer and also new customer. Should provide better customer service through better customer relation so that old customer doesn't left. FORCE 3: THE THREAT OF SUBSTITUTES (LOW) The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need.

The threat of substitution is also affected by switching costs - that is, the costs in areas such as retraining, retooling and redesigning that are incurred when a customer switches to a different type of product or service. It also involves: Product-for-product substitution (email for mail, fax); is based on the substitution of need; Generic substitution (Video suppliers compete with travel companies); Substitution that relates to something that people can do without (cigarettes, alcohol). Now let us discuss this concept for Indian telecom industry. The potential major substitutes for telecom industry are as follows: VOIP (Skype, Messenger etc.) Email Satellite phones All of these technologies have a huge potential, though none of the above a major threat in current scenario. Strategy of Tackling Threats of Substitute Products in Telecom Industry Product innovation at regular basis. Providing Value added services. Keeping price according to market level. Pressurizing government to make the policies unfavorable to the substitute product. Providing the facility of substitute product in the current product or service range. For example. To tackle the threat the GSM mobile service the CDMA mobile Service provider have started to provide the additional GSM service in the same set. Negotiation with suppliers for high quality service or raw materials.

SUGGESTIONS Indian telecom companies should invest more in self Research & Development activity rather than depending upon foreign suppliers to tackling the threats of substitute. FORCE 4: BARGAINING POWER OF BUYERS (HIGH) Buyer power is one of forces that influence the appropriation of the value created by an industry. The most important determinants of buyer power are the size and the concentration of customers. Other factors are the extent to which the buyers are informed and the concentration or differentiation of the competitors. Kippenberger (1998) stated that it is often useful to distinguish potential buyer power from the buyer's willingness or incentive to use that power, willingness that derives mainly from the “risk of failure” associated with a product's use. This force is relatively high where there a few, large players in the market, as it is the case with retailers a grocery stores; Present where there is a large number of undifferentiated, small suppliers, such as small farming businesses supplying large grocery companies; In the context of Indian telecom industry we can say that the following points influence the buyer power: Lack of differentiation among the service provider Cut throat competition Keep the price lowest in market. Actively participate in research and development activities to offer new technology.

Try to maintain the uniqueness of product as long as possible. Try to be market leader in product and service range offerings. Try to eliminate the intermediaries involved in providing products and services to reduce the cost FORCE 5: BARGAINING POWER OF SUPPLIERS (MEDIUM) Supplier power is a mirror image of the buyer power. As a result, the analysis of supplier power typically focuses first on the relative size and concentration of suppliers relative to industry participants and second on the degree of differentiation in the inputs supplied. The ability to charge customers different prices in line with differences in the value created for each of those buyers usually indicates that the market is characterized by high supplier power and at the same time by low buyer power. In case of Indian telecom industry the following should be kept in mind: (i) Limited number of suppliers: The industry basically has limited number of suppliers. BSNL is one of the major supplier in Indian Telecom Sector, it provides link to all other service providers. TABLE:1 -SUPPLIERS OF INDIAN TELECOM INDUSTRY (ii) Shared tower infrastructure: Technology has helped them to share the tower infrastructure. This basically helps them to reduce the initial investment a lot.

(iii) Limited skilled Managers: Limited pool of skilled managers and engineers especially those well versed in the latest. (iv) Medium Switching Cost: Medium cost of switching since changing their hardware would lead to additional cost in modifying the architecture. (v) Overall influence on the industry - medium. STRATEGY OF TACKLING NEW COMPETITORS IN INDIAN TELECOM INDUSTRY 1. Indian Telecom companies negotiate with 4-5 suppliers at the same time for the same contract so that to keep the psychological pressure and also give the message that they have so many options. 2. Always make sensation in media about new project or new requirements so that more and more supplier comes to offer and they can easily bargain with the supplier. SUGGESTIONS Discuss The Strategic Options And Provide Examples Marketing Essay Discuss The Strategic Options And Provide Examples Marketing Essay Published: Last Edited: 23rd March, 2015 This essay has been submitted by a student. This is not an example of the work written by our professional essay writers. Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world.

It involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation and infrastructure. Integration in globalization is either negative or positive depends breaking down of trade barriers. The removal of barriers can be beneficial for products that are important to the economy growth. An example of imported raw materials is very expensive but the cost will be down if the supply will increase and will make cheaper to produce the final products for export. 2STRATEGY Strategy is reflects decisions to offer particular products or services in the particular markets. The strategic options for the exploring opportunities in the new established market and existing product are good opportunity to use the availability resources. It is a tool in the direction of the firm's objective in achieving business success in the long term. CORPORATE STRATEGY: This is the focus of an organization which products or service markets to compete and area to operate. This is because market definition is the domain of corporate level strategists, the responsibility for diversification, addition of new products or services to the existing product, also falls within the realm of corporate-level strategy. A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.

Businesses use strategic alliances to: Achieve advantages of scale, scope and speed Increase market penetration Enhance competitiveness in domestic and/or global markets Enhance product development Develop new business opportunities through new products and services Expand market development Reduce costs. 3How to enter Market The best mode of entry its broad choices are indirect exporting, direct exporting, licencing, joint ventures and direct investment. A joint venture is an agreement by two or more parties to form a single entity to undertake a certain project. Each of the businesses has an equity stake in the individual business and share revenues, expenses and profits. Joint ownership has certain drawbacks. The partners might disagree over investment, marketing, or other policies. One partner might want to reinvest earnings for growth, and the other partner might want to take out these earnings. Furthermore joint ownership can hamper a multinational company from carrying out specific manufacturing and marketing policies on a worldwide basis. Licensing is a simple way for a manufacturer to become involved in International business. The licensor enters an agreement with a licensee in the foreign market, offering the right to use a manufacturing process trademarks, intellectual property and trade secrets are licensed to an external firm. It's used mainly to manufacture and sell a certain product.

It's a lower risk way of expanding the reach of product compared to building company manufacturing base and distribution reach. Coca-cola is an example of an international market by licensing bottlers around the world. Franchising is an excellent way of quickly rolling out a successful concept nationwide. Franchisees pays fixed fee and agree to ongoing payments so the process is financially risk-free for the company. However, downsides do exist, particularly with the loss of control over how franchisees run their franchise. It is thus an important form of vertical market integration. Potentially, the system provides an effective blending of skill centralization and operational decentralization. It permits the franchise to sell products or services under a highly publicized brand name and a well-proven set of procedures; it is a carefully developed and controlled marketing strategy. Examples of franchisers are hotels brands i.e. Hilton, Holiday in and Coco-cola.

Advantages of forming strategic alliances Provide companies with the opportunity to gain new capacity and expertise Allow companies to enter related businesses or new geographic markets or gain new technological knowledge access to greater resources, including specialized staff and technology sharing of risks with a venture partner Disadvantages of strategic alliances It takes time and effort to build the right relationship and partnering with another business can be challenging. Problems are likely to arise if: There is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners. Different cultures and management styles result in poor integration and co-operation. The partners don't provide enough leadership and support in the early stages. Success in a joint venture depends on thorough research and analysis of the objectives. Examples of strategic alliances companies Sony-Ericsson is a joint venture by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. Virgin Mobile India Limited is a cellular telephone service provider company which is a joint venture between Tata Tele service and Richard Branson's Service Group. #ixzz1KAPliPOB Product Strategies Is the central focus of the marketing mix. It is fails to satisfy the needs of the consumers, no amount of promotion, price cutting, or distribution will persuade them to buy.

The total product, which is what the customer buys, which also include the package, the brand name, accessories, after sales service, the warranty and instructions for use. Thus international product strategies and policies should include the following aspects. 4Strategies Matrix Ansoff Matrix has four strategies which an organization will be good to process for good foundation of the company future development. Ansoff matrix focused on the firm's present and potential products and market, customers by considering ways to grow through existing products and new products and in existing market and new markets. It is one of the best tools for the companies to develop market and product expansion. Market Penetration, Diagram below indicate the Ansoff Matrix : faculty.msb.edu/homak/homahelpsite/webhelp 5MARKET PENETRATION Is a term that indicates how deeply a product or service has become entrenched with a given consumer market. The degree of penetration is often measured by the amount of sales that are generated within the market itself, increasing sales force, increase distribution and promotion of products, more expenditure in marketing and advertising activities will results in increasing sales. Market penetration can be considered in broader terms, and be used as a way of identifying a wider consumer base.

Penetration expands the influence of the product to new consumers and thus increases the sales and general proportion of the consumer market that the manufacturer controls. Market penetration seeks to achieve four main objectives: The market share of current products should be maintained, this will be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps Dominance of growth markets should be secured Competitors should be driving to restructure a mature market, promotion campaign should be more aggressive for the same pricing strategy should be designed to make difficult to the competitors Implemented loyalty scheme for the existing customers. 6Examples of Market Penetration Dell Recognizing the software as a service can be a potent market penetration tool, also assembling a services portfolio that now includes e-mail disaster recovery, spam/virus filtering and archiving via its Message one acquisition. Airlines - Easyjet Airline market was by offering flights for the small distance cities. - Southwest Airline same as Easyjet were more profitable on operating small distances Pakistan State Oil penetrates in Pakistan market growth from 40% to 65% in the duration of 4 years by developing new retail outlets. Car Manufacturing Toyota Motor Corporation is the world's largest automobile manufacturer by sales and production.

Toyota and BMW good relationship in marketing in order to retain and have high profile for their value customers. Toyota Motor Corporation is the largest conglomerates in the world. Toyota has grown to a large multinational corporation from where it started and expanded to different worldwide markets and countries. Banking HSBC Bank customers were very happy on internet banking that they can access their online account 24hrs a day wherever they are in the world. Telecommunication Airtel promoting its services to penetrate in the Indian market. It is the world's fastest growing industry, they have couple of joint ventures with Alcatel in Indian, it is operates in 19 countries across South Asia, Africa and the Channel Islands. Airtel is the fifth largest telecom operator in the world. 7Advantage and Disadvantage of Market Penetration Benefits One of the successful penetration is pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. Penetration strategies are often used by businesses that need to use up spare resources. A penetration pricing strategy may also promote complimentary and captive products. The main product may be priced with a low mark-up to attract sales.

Risk The most obvious potential disadvantage of market penetration is the likelihood of competing suppliers following suit by reducing their prices, May lead to a price war with a competitor with the same strategy The effects of economies of both scale and experience lead to lower production costs, which justify the use of penetration pricing strategies to gain market share Low pricing could be detrimental to the perceived brand value and to the company reputation. Another potential disadvantage is the impact of the reduced price on the image of the offering, particularly where buyers associate price with quality. 8MARKET DEVELOPMENT Market development is a marketing technique aimed at increasing a company's market in order to widen the customer base for the purpose of selling more products. This is an important aspect of helping a company grow. Small companies with limited marketing experience may turn to consultants for this, while experienced large companies have internal marketing departments that may be responsible for market development. It is an ongoing part of doing business for successful companies. Also will help to grow your market by understanding how your product is perceived in the marketplace and what areas of improvement are there. Using the Starbucks example This occurs when the market analyzing makes some sort of change, market development has occurred over the past couple of years as consumers are becoming more health conscience.

Preferences are moving toward different types of teas/drinks and consumers are demanding more healthy alternatives. These factors have aided to market development, with different franchises popping up, such as Argo tea, which become direct competitors to Starbucks Benefits Another way would be to focus on the technology base used to supply existing products and to identify other products needs, which customers might need to be produced using current facilities and know how. Here the organization tries to develop new products or services and thereby makes similar existing products obsolete unlike product development strategy which extends an existing product's life cycle. There could be radical innovations where the company tries to replace existing products or technologies in an industry. In the case of incremental innovations, the firm tries to put focus on new products or services that modify the existing ones. Apart from such radical innovations firms, also carry out incremental innovations to differentiate their products. One example, is Toyota's multi-utility vehicle Qualis.

Although other Indian companies had similar products, Toyota, more effectively combined the styling an engineering that resulted in increased demand for its product (a great hit compared) to Sumo, Disadvantages/Risks As per Ansoff framework of a Market Development strategy New Markets may be different then expected ( especially in new geographic market with cultural differences Costly modifications may be required Examples of Market Development Compact disc technology has virtually replaced long playing vinyl records in the recording industry, and high definition television is likely to replace regular television technology. McDonald's has couple of new markets in the wake of globalization with its existing products. This is because of the nature of the business and products, McDonald; implemented its burgers which helps the growth of the market. Nestle expanded the market for its product Milkmaid by advertising the new uses of the product aggressively in India. Chinese products developed new market for their product worldwide Toyota's multi-utility vehicle Qualis although there are same product in India, Toyota, more effectively combined the styling an engineering that resulted in increased demand for its product than Indian. Close Up toothpaste was first gel toothpaste which was transparent with a red distinctive colour, all others pastes were white.

The market was dominated by Colgate which promised that it would fight tooth decay and bad breath. Close up promised the dual benefit of being a toothpaste and mouthwash in one and thus delivered fresh breath and white teeth. 9PRODUCT DEVELOPMENT This is a new product to be marketed to our existing customers. Here we develop and innovate new product offerings to replace existing ones. Such products are then marketed to our existing customers. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers. Developing of new products and offering to the existing market is product development strategy which need capital and time to implement. The company has to do a market survey in detailed if it is feasible to introduce new product in the current market. Challenges Several things need to be checked in developing new products in the company this is including, Technology and Cost, by using latest technology the product performance or the quality of products will be on highest level of functionality although Cost will be challenge to the company in either buying the new equipments or conducting trainings. Benefits Company products will be extended by producing different variants, packaging in new ways. Service industries shorten time to market and improve customer service and quality.

Risks Customers might be confused among the existed and developed products, if the analysis will not performed carefully, example is the new Coke, Customers liked the taste of the new Coke in the taste tests conducted by Coca Cola, customers of the brand favoured classic Coke over the new product. Another Examples of Market Development Google developed a new browser chrome for the existing internet user McDonalds is always within the fast food industry, but frequently markets new burgers 10DIVERSIFICATION STRATEGY Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets. Diversification can occur either at the business unit level or at the corporate level. Diversification is very important into related and unrelated areas. Diversification related in the form of backward, forward, and horizontal integration. Concentric diversification This means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage. For example, a company that manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. The technology would be the same but the marketing effort would need to change.

The company will focus to add more market share to launch a new product that helps the company earn more profit. An example technological related in concentric diversification is Tomato ketchup and sauce to the existing brand processed items of food specialties. Vertical diversification This is when the company is closer to the raw materials sources in production, in another words is backward vertical integration strategy. An example of Avon's line on cosmetics business. Avon pursued a backward form of vertical integration by entering the production of cosmetics. Forward diversification occurs when Avon move closer to the consumer in term of production stages. Horizontal diversification, occurs when a company develops interests complementary to its current activities. For a company may integrate its activities to include all aspect of the value chain; design, manufacture, market and distribute. The company adds new products or services that are often technologically or commercially unrelated to current products but that may appeal to current customers. In a competitive environment, this form of diversification is desirable if the present customers are loyal to the current products and if the new products have a good quality and are well promoted and priced. For example, Avon's move to market jewelry through its regular sales force involved marketing new products through existing channels of distribution.

Conglomerate diversification (or lateral diversification) The company markets new products or services that have no technological or commercial synergies with current products but that may appeal to new groups of customers. The conglomerate diversification has very little relationship with the firm's current business. Therefore, the main reasons of adopting such a strategy are first to improve the profitability and the flexibility of the company, and second to get a better reception in capital markets as the company gets bigger. Even if this strategy is very risky, it could also, if successful, provide increased growth and profitability. For example a company whose core business is media services may diversify into provision of financial services. Advantages of diversification strategy Control markets by guaranteeing sales and distribution. This can arise through a combination of linkages in the value chain. For example where production and distribution channels are combined, or where a company uses its well-established brand names or corporate identity to gain benefits in new markets Take advantage of existing expertise, knowledge and resources in the company when expanding into new activities. This may result in transfer of skills, such as research and development knowledge and sharing of resources.

Provide better risk control through no longer being reliant on a single market Spread risk by avoiding having all eggs in one basket Disadvantages of diversification strategy Adding bureaucratic complexity. In addition to direct financial costs, there may additional bureaucratic complexities necessitated by the need to coordinate and control core activities with additional activities. Diversification through acquisition across national boundaries may result in the organisation having to deal with varying intricacies of the political and legal requirements of the different countries in which the organisation has controlling interests. Diversification also acquisition May result in failure where there is a mismatch between core competencies Adding management costs. Adding bureaucratic complexity. In addition to direct financial costs, there may additional bureaucratic complexities necessitated by the need to coordinate and control core activities with additional activities. Examples Virgin Media moved from music producing to travels and mobile phones Walt Disney moved from producing animated movies to theme park and vacation properties Canon diversified from a camera making company into producing whole new range of office equipment CONCLUSION It is true for the world investment and business to move from national and domestic markets to a worldwide environment. Globalisation eliminates all boundaries, causing firms to engage in business worldwide. Consequently firms have to deal with couple of challenges if the management strategies will not help them to make the correct choices and decisions.

Strategic options related to products and services which a firm may offer in which markets are critical to the success of companies. The differences in strategic choices of the firm can often be attributed to the type of market in which the company operates. Changes in business environment play a crucial role in the strategic options that an organisation may pursue over its future development. There are risks associated with all of the four strategic options entailed in the Ansoff matrix. Market penetration is generally considered as a low risk strategy while diversification, on the other hand, is deemed as a high risk growth strategy as it involves moving simultaneously into new products and new markets. Diversification remains a popular strategic option for firms in today's competitive business arena, and if the diversification strategy is consistent and well throughout, like the case of IBM, significant improvements in profitability can be experienced.

Question: Name the Indian corporation joint-venture partner in India's Virgin Mobile and Starbucks businesses?
Answer: Tata