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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