Cafe Cofee Day
Mohamed Hasan – 5890164
Mohammed Alsiari- 7572441
Yuktika Pahwa -7487132
Anuja Patil-7844470
Wasif Raza -7590939
Agenda
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Introduction
Porter’s 5 Forces Analysis
SWOT Analysis
Marketing 4P’s
Recommendations
Risk Analysis
Questions
Introduction
• In 1995, V.G Siddhartha opened the first
Café coffee Day (CCD) in India’s political
and commercial capitals .
• Within few years CCD expanded to close
to universities and companies.
• Current market leader in India
– 60% market share as of April 2013.
Current Industry
• Barista, Costa Coffee, Dunkin Donuts and
Lavazza still exist in the market with a
minor imposed threat on CCD.
• Starbucks opened 13 stores in India
through a joint venture with Tata Group (
Indian multipurpose company) which has
an excellent infrastructure.
Problem?
How to approach the entrance of Tata
Starbucks to the market.
Porter’s 5 Forces Analysis
Threat of New Entrants
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Retail property acquisition
Large Capital Investment
Staff training
Coffee bean suppliers
Bistro and bakery
Furniture availability and
affordability
Compliance with food and
beverage standards
Knowledge of local food and
beverage preferences and
behaviours
Brand acknowledgement and
loyalties
Substitutes
• Tea beverages ‘black tea, chai,
mint, ice tea, etc.’
• Restaurant that can offer a
variety of beverages.
• Bars and alcohol drinks
• Non-espresso beverages
• Cold beverages
• Protein shakes and power
drinks
• Soft drinks ‘Soda’
Porter’s 5 Forces Analysis
Competitive Rivalry
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Indian coffee market is in growth
period
Exclusive agreement with coffee
plantations
Owning coffee bean plantations
and distributions network
Access to premium retail locations
Marketing partners to monitor
customer coffee drinking habits
and behaviour
Consistent coffee quality among
many locations of the same
company
Power of Suppliers
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Coffee suppliers
Distributors margins
Exclusivity agreements with coffee
companies
Bistro bakeries
Proximity of coffee plantations to
coffee shops
Furniture manufacturers and
prices to manufacture customized
dining areas to a certain company
Porter’s 5 Forces Analysis
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Power of Buyers
Affordability of foods and beverages. India is a high
price sensitive country and the prices should reflect the
local economy.
Following factors have to be considered:
Food and beverage quality
Interior ambience
Variety of products (Quantity and Quality)
Services provided (Customer Satisfaction)
SWOT Analysis
Strengths
• Well established in India with
~1400 stores and kiosks
• %60 market share, first in
coffee market
• Own coffee producing fields
• Limited bar cultures, coffee
houses are the alternative
• 60% of customers are regular,
loyal
• Manufactured their own
vending machines and furniture
(cutting costs)
Weaknesses
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High retail property costs
Low customer service
satisfaction
Access to premium realty
locations
Increasing cost of renovations
and salaries to keep up with
Starbucks
Challenge to retain customers
Changing strategies away
from coffees (E.g. Breakfasts
did not work)
SWOT Analysis
Threats
• Employees turn overs
• Similar prices in CCD squares
as Starbucks may shift some
customers to Starbucks.
• Getting edged out of premium
retail locations.
• Massive renovations costs
• Aggressive approach toward
Starbucks
Other Factors
Promising Trends
• The hype around Starbucks
entry is over
Benchmark
• Tata group provide coffee
plantations and premium
location
• It has the power to keep
Starbucks in media, more
advertising
• Able to afford higher salaries
SWOT Analysis
• Opportunities:
– Joints ventures with retail groups to provide
premium retail and share costs.
– Brand lounges and squares differently than
CCD to justify their different prices among
different locations.
Marketing 4P’s
• Price:
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They own their Coffee plantations
They manufacture their own coffee machines
Price sensitive customers
They maintain a reasonable pricing strategy
• Place:
• Half of the stores in urban areas
• 1469 stores, 1000 takeaway outlets, 450 fresh
retail coffee, 22000 vending machines.
• Slightly high retailing prices.
Marketing 4P’s
• Product:
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Variety of Coffee and Iced beverages.
Ready to eat sandwich’s, burgers and desserts.
Local food items: Samosa and Chicken Tikka.
Lounges have separate kitchens and chefs.
• Promotion
– Sells T-shirts, bags, coffee mugs, etc.
– Tickets for Concert and allows shooting movies at
their stores.
– 60% of the CCD customers are regular visitors.
Recommendations
• Invest research on cutting down costs at the Squares
and Lounges.
• Introduce Family areas to broaden the market segment.
• Introduce loyalty cards to maintain high percentage of
loyal customers.
• Enhance customer satisfaction by increasing the salaries
of workers and improve training system.
• Gain more feedback from customers by creating
discounts for surveys and having suggestion boxes.
Risk analysis
Recommendation
Risk
Mitigation
Research to cut down
cost
Could be expenditure of
unnecessary capital
Focusing on lounges and
squares close to
Starbucks
Family areas
price sensitive customers
Hold the idea until further
information is provided
regarding Starbucks.
Customer satisfaction
Prices increase in order to
pay higher salaries.
Focus on customer
satisfaction in locations
close to Starbucks.
Loyalty Cards
Decreasing profit margin
Start the functionality of
cards only in locations
close to Starbucks.
Questions