Demographic Cultural

LOCATION SPECIFIC ADVANTAGES Coming to the advantages inherent to the Indian market conditions, it might be suitable to cover the PESTLE framework here as it is most relevant in describing the specific market environment. POLITICAL ENVIRONMENT The Indian economy has been experiencing more stability as far as the Government and political scene is concerned. There has been reduced internal turmoil resulting from political influences and this has created a better working environment for industries and businesses in India. The current United Parties Alliance (UPA) government headed by the Indian National Congress party (INC) has shown more tolerance towards foreign countries in general and towards foreign investments in particular, and the recent reforms have placed India considerably high in the ‘Doing Business Report,2009’ released by the World Bank (www.doingbusiness.org). However, the ongoing elections in Indiaare expected to result in turning the tide in favour of the radical Hindu opposition party the BhartiyaJanta Party (BJP) led National Democratic Alliance (NDA), which is opposed to ‘westernisation’ of theIndian culture. On the basis of this, it becomes safer for Starbucks to enter into an alliance/jointventure with an Indian company that can provide a buffer from the political backlash andconsequent inroads into the Indian business scenario. Moreover, Starbucks needs to be vary ofpossible opposition from the existing competitors (CCD, Barista, etc.) through use of politicalinfluence and delaying tactics. However, likelihood of this is fairly low as the Indian market is largeenough to accommodate more players and the incumbents in the Indian gourmet coffee industrywill be minimally affected by Starbucks’ entry.As far as the demographics are concerned, the majority of the Indian population is still rural(www.eiu.com) but the urbanisation is occurring at a respectable 2.4 % annually. In spite of this, thesheer size of the total Indian population (1.1 billion in