CORPORATE STARTEGY

ASSIGNMENT
Coffee Wars in India: Café Coffee Day 2013

JANUARY 19, 2019

BY: SIKANDAR ALI
MBA-CS-III
 SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION

FACULTY OF BUSINESS ADMINISTRATION

Corporate Strategy
MBA III & MBA VIII
Spring 2019

Coffee Wars in India: Café Coffee Day 2013

Café Coffee Day (CCD) is the largest coffee retailer in India. In 2012, Starbucks entered the India market.
This case explores CCD's competitive advantages, its analysis of Starbuck's entry strategy, and how it
might respond to Starbucks' entry

Case Questions

1. Pastel Analysis and any identify key factors. (EACH COMPANY)

Pastel define Identify Reasons Counter

(Strategies)
POLITICAL Government Now govt. has Because govt. They could
intervention deregulated authorities have import other
like ban or the coffee understood the types of raw
permissions market. positive impact of material of coffee
regarding deregulation of this which are not
some market. available in India.
businesses
ENVIRONMENTAL Pollution or Climate in India Because coffee There would
climate is good for production is done benefit to
effects production and is hilly areas and companies for
availability of there is also purchasing coffee
coffee. By availability of from local
pollution climate in India suppliers easily.
perspective, which is required So they could
there is not any for its production. order coffee they
negative effect need it on more
yet this time. amount due to its
demand hike.
 SOCIAL Age, There is family Its reason is history Right now youth
lifestyle andoriented of centuries of is very active in
preference. culture. building and their decisions.
Moreover, maintaining So companies of
there is relationships. coffee could
increasing exploit it.
trend of dating
between
couple.
TECHNOLOGICAL Use of high Nowadays, Roast machine, They have exploit
tech there is access vending machine, the latest but
instruments and WIFI are used by most needed
in information by companies. Because technologies for
conducting Indians to high they wanted to giving customers
business. technologies, serve the customers a better service.
especially by in efficient way.
business
people.
ECONOMICAL Recession or Per capita Because India is It would be
boom in income is huge market for better to exploit
economy or increasing of business due to firstly to this
increase or Indian which international market and
decrease in population. businesses have become first
per capita invested which mover and
income and caused increase in champion in that
changes in income of Indian. field.
GDP. Moreover
urbanization and
education has
played positive role
LEGAL Regulation Now coffee It happens just to It is good
regarding market is prosper the efforts opportunity to
competition deregulated of coffee exploit in
and other production people. perspective to
business earn.
practices.

2. Analyze the changing industry structure in which EACH Company is operating by using
Porter’s Five Forces Model. How did Company counter the changes and challenges of the
industry competitive forces in which Company is operating by using Porter’s Five Forces
Model?
 Five Who They Level of Reasons Counter (Strategies)
Forces Are Threat/Bargaining
Power
Buyer Youngsters High Because customers CCD should enhance
power and have some other their service level at
professionals businesses in the least at the par of
market. their competitors.
Supplier Farmers of Low Because there is a They should
power coffee huge number of such continue good
suppliers in India. relations with other
There is vertical suppliers too.
integration by CCD.
The There is not Moderate There is not any CCD authorities
threat of any new situation which could must be proactive
new player be a great hurdle for rather than reactive
entrant details in the new players. But it to the external
case but would be a hectic changes so mitigate
there could situation, if new player the threats and to
be anyone in doesn’t have enough exploit the golden
this industry, capital to compete opportunities.
especially at with big giants.
this stage of
industry.
Threat of Tea, soft High Tea, soft drinks and CCD authorities
substitute drinks and juices. should also bring
juices. products with better
service.
Rivalry Existence of High There are existent They should bring
current competition in the innovation in
competitors market. products and
enhance service
along with
conducting
advertising and
promotional
activities.

3. You are also advised to conduct a strength, weaknesses, opportunities and threats (SWOT)
analysis for EACH Company and provide strategic suggestions based on analysis.

Identify Counter (Strategies)

Opportunities: They should go in those areas In view of market situation
where they have not their product penetration and
foothold.
 market development would
be better.
Threats: Hike in real estate price could Try to contact different real
be problematic. estate agents so to identify
locations, where there is least
cost.
Strength: Reasonable and affordable Move to another country
prices, leadership in the where they have not their
market, the scale of foothold.
production and vertical
integration
Weakness: Employee retention and Employee training and should
customer service. increase employee salary.

4. How is the Company(each) using its resources and capabilities to get competitive advantage
and why is it so successful in it?
Ans: If we talk about CCD, then they use vending machines, they own land for farming coffee,
they have own employees and they have their café in strategic locations.
If we talk about Starbuck, they have the best employees, better quality coffee ingredient, they
have larger and lavish store locations, they have enough press coverage,
5. Describe Company Business strategy
Ans: Strategy of CCD is to promote café culture as well as to promote their brand.
6. Who are Company’s competitors?
Ans: their competitors are;
Starbuck, Barista, Costa Coffe, Coffee Bean & Tea Leaf, Gloria Jean’s and Dunkin Donuts

Case Questions

7. What’s your assessment of Starbuck:

a) What is Starbucks initial entry strategy?

They have strategy of joint venture and to serve the customers of serving high income group as
well as professionals.
b) What is Starbucks vision for India?
To open nearly 300 stores.
c) What are Starbucks advantages?
Better service, ambience and high quality of their products.
 d) What would be your Major Concerns?
Our concerns are following and we have to deal them;
Retention of employees is difficult.
Our service is not at that level as the level of Starbuck is providing.
Customers are currently crazy about Starbuck, which could be forever.

8. If you were V.G Sinddratha and Venu Madhav how would you respond to Starbucks entry?
a) Slight course correction (wait and see or don’t over react?)
Yes we would wait to analyze the situation and then to take any action.
b) Bigger bolder investments in upgrading and expansion ( step on the gas before Starbucks gets
deeply established)
Yes to open new lounges and squares and to start business at locations near to railways and
airlines.
9. If you were V.G Sinddratha and Venu Madhav’s shoes
a) What are the most important short term goals?
Increasing contacts with customers and asking about their satisfaction and queries.
b) What are the most important long term goals?
Increase service level and to upgrade the ambiance level.

10. As CCD enters into a battle with Starbucks What are the most important short term goals?
Increasing contacts with customers and asking about their satisfaction and queries.

a) What are CCD’s competitive advantages?

Following are competitive advantages;
Leadership in coffee business in India.
Vertical integration which gives benefit of continued supply of raw material.
Affordable prices.

b) What are CCD’s potential competitive disadvantages

It not an international brand.
They are good enough at their service as compare to Starbuck.