Cafe Coffee Day Case Study

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Introduction Who would have thought that the humble cup of coffee that helps revs you up in the morning would unleash a near Rs.2000 crore storm in what is predominantly a tea drinking country? But the inevitable has happened. ‘A lot can happen over a coffee’ says the tag line of one of India’s most recognised coffee brands, and indeed a lot is happening over it! In the last 5 years the ready-to-drink tea and coffee market has grown at an astounding 150 times, in the country, clocking an average annual growth of around 40 per cent. This has made the cafe industry one of the fastest growing organized retail segments. And while this stratospheric growth has seen the high profile entry of arguably the most recognised global coffee brand yet…show more content…
This gives it control over bean production and processing and allows for greater efficiency from its back-end set up. While the front-end business of café may be making operational losses, the coffee production company has profited due to steady demand. Others, who don't have this backward integration, have predictably struggled. Starbucks in India does have similar strengths thanks to its Tata tie-up which has one of the largest coffee plantations in the world! The only challenge is its relative lack of size in India. Till it expands it would be at a disadvantage in squeezing out similar economies of scale. Starbucks in India has shown some gumption by trying to understand the Indian market better and adapting to it. It has not applied the standard cookie cutter model which has been in vogue elsewhere overseas. Though there is no denying the fact that much of this has had to do with the brand's strong global reputation, this has helped only in gaining immediate traction than other lesser-known chains. Much of the success can be attributed to the great job done in tailoring the brand — through store design, menu innovation and learning how local stores are operated. In India this has included establishing larger store footprints understanding people like to visit in large groups. The additional space allows people to relax.…show more content…
However, the stores have been closed and the brand has decided to return later perhaps with a new partner. Coffee Bean & Tea Leaf The brand entered India through the food division of Future Group - Pan India Food Solutions. Lack of focus and financial trouble at its parent have not been conducive to its growth. How has the industry changed as a result of commerce and technology? Technological interface has done much to alleviate the visibility challenges of the supply-chain. This has especially been of much significance in India where logistics is a prime bottle neck. On its part Tata Starbucks has implement an Interactive Ordering System, which is the first of its kind in India. It allows for a two way communication between the company and its suppliers allowing for real time information to be available to both. So rather than adjustments being made at one side. They can be made at both, thus reducing stress. The second is the introduction of cloud based systems on the hardware side. This has not only brought down the go-to-market time, but has also contributed in lowering the cost of infrastructure substantially. The system has potential to be used by Starbucks in other developing

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