Cafe Cofee Day Mohamed Hasan 5890164 Mohammed Alsiari- 7572441
Yuktika Pahwa Anuja Patil Wasif Raza Agenda Introduction Porters 5 Forces Analysis SWOT Analysis
Marketing 4Ps Recommendations Risk Analysis Questions Introduction In 1995, V.G Siddhartha opened the first Caf coffee Day (CCD) in Indias 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. How to approach the entrance of Tata Starbucks to the market.
Problem? How to approach the entrance of Tata Starbucks to the market. Porters 5 Forces Analysis
Threat of New Entrants Substitutes 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 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 Porters 5 Forces Analysis
Competitive Rivalry Power of Suppliers 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 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 Porters 5 Forces Analysis
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 Weaknesses
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) 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 Other Factors 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 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 4Ps Price: Place: 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, vending machines. Slightly high retailing prices. Marketing 4Ps Product: Promotion
Variety of Coffee and Iced beverages. Ready to eat sandwichs, 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