Company Introduction & Analysis, Products, Competitors, Mission, Financials

1. Coffee Wars in India: Café Coffee Day
2015

2. About The Company
• Café Coffee Day is a subsidiary of Coffee Day Global
Limited.
• It was founded by V.G. Siddhartha in Brigade Road,
Bangalore in the year 1993 .
• It is the largest organized retail coffee chain in India.
• Apart from India, they also operate in Austria, Czech
Republic and Malaysia.
• At present, they have more than 1,752 outlets across
the world.
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V G Siddhartha
Founder - Café Coffee Day

3. About Coffee Industry (India)
India is the 3rd largest producer &
exporter of coffee in Asia, and 6th
largest producer and fifth-largest
exporter of coffee in the world
India accounts for 3.14% of the
global coffee production
India’s annual consumption of coffee
is 97,000 tonnes.
Urban areas- 73%, rural areas- 27%
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4. The Dilemma
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With an IPO on the horizon :
Should they stay the
course and be
“mentally prepared”
Should they pull the
trigger? What
evidence would they
need to shift
direction?
OR

5. Coffee Wars - Indian Coffee Market
5
CCD held roughly a 45% market
share in India’s retail coffee market
45%
10%
45%
Indian Coffee Market (2015)
Café Coffee Day Starbucks
Tata Starbucks had captured 10%
of the market in terms of value
since 2012

6. Coffee Wars – Capturing Market Share
6
0
50
100
150
200
250
300
2014 2015
In Million ($)
Indian Coffee Market (Size) Café Coffee Day (Revenue)
Over the previous two years, the coffee market had
expanded from $230 million to $270 million, while
CCD grew revenues from $108 million to $120
million.
CCD planned an initial public offering (IPO) of the
holding company in mid-2015 that they hoped would
raise between $150 and $200 million.

7. Coffee Wars: Advancing with new stores
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By early 2015, there were 1,538 stores (1,486 cafés,
46 lounges, and 6 squares), up from 1,469 (1,421
cafés, 46 lounges, and 2 squares) two years earlier
1360
1380
1400
1420
1440
1460
1480
1500
1520
1540
1560
2015 2013
Café Coffee Day Stores
Cafes Lounges Squares

8. Competitor Analysis
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9. Revamp the Hiring and Training Processes
It's more than
giving out a free
coffee every now
and then, it's
about building
relationships
Train employees
more thoroughly
to detail what
"five star"
customer service
looks like
Hire people who
have natural
people skills, and
the coffee skills
will come as they
are trained and
become more
experienced
Continue to hire
younger locals
but focus more on
the personality of
the person you
are hiring more
than before

10. Advertising Campaign
Starbucks does not use mass media
advertising but instead relies on
reputation and word of mouth
If CCD were to enter mass media
advertising, they could potentially
increase their brand recognition and
attempt to keep customers that they
would otherwise lose to Starbucks
Social media/online campaigns for the
younger crowd and TV/radio
campaigns to appeal to the older
crowd
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11. Competitive Strategies
Followed a
backward
integration of
Value chain
Focuses on core
competencies-
coffee and
outsources other
materials
Made its
outlets more
fun and
entertaining to
attract youth
Quality assurance
CCD did not
use franchisee
models
CCD focussed not
selling product,
but selling
“EXPERIENCE”
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12. Strategies Adopted by Café Coffee Day
These measures helped CCD increase its average sales per day per
outlet from roughly $240 in 2013 to $300 in 2015 still low compared to
Starbucks’ average of $1,200 to $1,400.
CCD also marginally raised its product prices.
CCD sought to fill in certain menu gaps compared to the competition,
launching a Snowy Vanilla Frappe.
It also focused on innovations in its food and beverage offerings,
introducing four new food items in 2014.
CCD began by upgrading about 150 of its stores, while letting the
leases on some of the older and slightly rundown properties lapse.
12
0 500 1000 1500
2013
2015
Year
Average Sales per day per outlet
Starbucks Café Coffee Day

13. Learnings/ Key Takeaways
Cost Leadership Strategy: CCD adapted cost leadership strategy to gain competitive advantage
over its competitor Starbucks.
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Improving Customer Experience: CCD adopted a strategy to improve their customer experience
by increasing the size of their outlets and renovated to provide an ideal café experience to attract
more customers.
Gap Analysis: CCD tried to find “gaps "in their existing model and focused on improving that.
For e.g.: CCD sought to fill in certain menu gaps compared to the competition, launching a Snowy
Vanilla Frappe.