Mission
“To be the best café chain by offering a world class coffee experience at affordable prices.”
Country Analysis• Median Age – 27 years
• 65% of the population is below the age of 35 years
• The proportion of working population (25-59) is expected to increase from 40% in 2000 to 46% in 2020
• By 2020, 35% of the total population will be residing in Urban cities
• By 2020, there will be 109 miilion people in India earning between 3 lacs to 6lacs per annum and 100 million people earning between 6 lacs to 30 lacs
• Spending on discretionary products will increase to about 64% of total spending by 2020
Industry Analysis
• Current size of the café market in $70 billion and is expected to grow to $151 billion by 2020
Competitor AnalysisBiggest competitors are:• Starbucks• Costa Coffee• Barista• Gloria’s• Coffee Bean & Tea Leaf
• Many stand-alone coffee shops are coming up.
• McDonalds and Dunkin Donuts have started selling coffee.
• Many substitutes in the form of Slush, Iced Tea, Flavored Juices, Fruit Punch etc are available.
• Revenues are rising but losses are also on the rise.
About Café Coffee Day
• Café Coffee Day, owned by Coffee Day Global is the largest coffee chain in India.
• It was founded by Mr. V.G Siddhartha.
• With 1538 outlets across India, it is 3 times bigger than its major competitors such as Starbucks, Barista and Costa Coffee.
• It also has a presence in Austria, Czech Republic, Dubai, Malaysia and Egypt.
• It is also the largest producer of “Arabica” beans in Asia exporting to various countries including USA, Europe and Japan.
Café Coffee Day as on December 31, 2014
Competitive Advantage
First Mover
VerticalIntegration
Loyal Customers
Residential College
Lowest Price
Strengths
1. Highest number of stores2. High brand equity among the youth
3. Low prices4. Vertical Integration
Weaknesses
1. Not seen as a premium brand2. Ordinary ambience and décor
3. Complaints about customer service
Opportunities
1. Growing coffee culture in India2. Rising income of people
3. High potential in Tier-II and Tier-III cities4. Enter foreign markets
5. Introduce new varieties of snacks and beverages
Threats
1. Growing competition from global and local coffee chains
2. Rising attrition rate
SWOT
Porter’s Five Forces
Industry rivalry(HIGH)
Threat of new entrants
(HIGH)
Supplier’s bargaining
power(LOW)
Threat of substitutes
(HIGH)
Buyer’s bargaining
power(LOW)
Abell’s Framework
Customer Group
(18-30 years)
Distinctive Competencies
Low cost, Larger reach, Better connect with the people
Customer Need
Informal place to relax and have fun
Determinants of Shareholder Value
To increase shareholder value, managers must pursue strategies that increase the profitability of the company and grow the profits
CCD has used certain strategies, like going for IPO - Rs 1,150-crore for its growth and expansion purpose, ultimately helping the shareholders to make profit
Coffee Day has ties up with Swiggy and will start the service in Bengaluru where it has mapped 50 cafés to deliver orders within a 3-4km radius.
Rs 1,150-crore IPO in October 2015 .
Cafe Coffee Day to invest Rs 450 crore to add 400 stores in 3 years.
Current Information on CCD
Industry Life Cycle
Organized Café chain Industry currently is in the Growth Phase
Strategic Groups
Café Coffee Day
Independent Café chains
Barista
Costa Coffee
Starbucks
Coffee Bean & Tea Leaf
Quality Map
Costa Coffee
Barista
Coffee Bean & Tea Leaf
CCDStarbucks
Functional Level StrategiesEfficiency
1. Highest number of stores2. High brand equity among the youth
3. Low prices4. Vertical Integration
Customer Responsiveness
1. Not seen as a premium brand2. Ordinary ambience and décor
3. Complaints about customer service
Innovation
1. Growing coffee culture in India2. Rising income of people
3. High potential in Tier-II and Tier-III cities4. Enter foreign markets
5. Introduce new varieties of snacks and beverages
Quality
1. Growing competition from global and local coffee chains
2. Rising attrition rate
Competitive Advantage
LOW COST
Customer Groups and Market Segment
Café Chain Market
CCD stores and Kiosks
Middle Income
College Students
CCD Lounge and CCD Square
Premium
Corporates
Value Creation Frontier
Costa Coffee
Barista
Coffee Bean &
Tea Leaf CCD
Starbucks
Business Level Strategy
Business Level Strategy used by Café Coffee Day
Crossing “The Chasm”Gloria Jean’s Coffee had to shut shop in
India as it couldn’t pass
the Chasm
CCD successfully crossed the Chasm
as it understood the needs of
majority of Indian consumers
CCD’s current strategy
Coffee Plantations
Conversion in to coffee beans
Selling coffee through retail
chains
Vertical Integration of Café Coffee Day
Existing PRODUCTS New
MARKET DEVELOPMENT
Opening of Café chains in internationally
DIVERSIFICATION
Vending machines
MARKET PENETRATION
Café Chains
PRODUCT DEVELOPMENT
1. Coffee exports2. Premium cafes such as Lounge and Square3. Home Delivery Service
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