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Rajiv Adlakha 39 Rakesh Kumar 41 Saurabh Maitra 51 Shantanu Kumar 53 Sohail Rana 58 Ankitesh Kumar Tiwari 74 Sushant Agrawal 79
The given case study mainly focuses on three main players in the Indian coffee market Barista, CCD and Qwikys. The Case study deals with the development of the Indian coffee market. The case study has made comparisons as to how Barista, CCD and Qwikys are different from each other. Comparisons have also been made regarding their market strategies adapted by each of the three players. The case study has also given us an idea on the ambience of the three stores and the way they attract customers.
The case study has given us an idea about the rapid expansion as well as the spread of various coffee outlets all over India. An overall idea is also obtained with regards to the target audience of the three outlets. One also gets to know about the various innovations in the products of their respective stores and also about how the customers get educated about the products. An overall idea is also obtained as to why customers are getting attracted towards these coffee outlets. It is not only just the coffee factor, the case study has also highlighted various other factors that has made these stores popular such as promoting caps, T-Shirts and Coffee mugs.
Per capita consumption 240 gms or 50 cups per annum 4-5 gms or 1 cup per annum
5th largest coffee producer in the world (3% of the world production) Avg. coffee consumption in India is 10 cups per person People in North India prefer instant coffee in contrast with people in south who prefer filter coffee Late 90s saw an emergence in coffee chains Three major key players : Barista, CCD, Qwikys
Growth Drivers
Increased exposure to international life style Rise of demographic class people are looking for more leisure. People spending more time outside their homes. The target segment to 20-34 year olds is expected to increased from 220 million to over 300 million by 2010.
Barista
Good friends great coffee
Entered in the Indian market in 2000. The company had 105 outlets and was planning to have 250 outlets by March 2003, go global, starting with a store in Sri Lanka by October 2002 in current year. Annual sales of Rs. 650 million as of 2002. Good ambience at its outlets. Target customer lifestyle oriented. Alliance with premium hotels such as TAJ properties. Tie ups with Planet M & PVR cinemas. Tata Coffee has a stake of 34.3% in Barista.
CCD
A lot can happen over coffee
Entered in the Indian market in 1996. The company had 50 outlets in 9 cities and planning for another 100 outlets by December, 2002. Annual sales of Rs.100 million as of 2002. Relaxing ambience with eye-catching crockery and bright dcor. Target customer college crowd and teenagers who formed the mass market. Alliance with premium hotels such as Taj properties Tie ups with Planet M & PVR Heavy promotions with CNBC, Singapore airlines
Qwiky Qwikys
y y y y y
Started in 1999. With 21 outlets in 5 cities and an annual sales of Rs. 43 million in the year 2002. It positioned itself as a place to hang out and spend time leisurely. The staff at Qwikys was trained to understand body language. Their customers were offered different varieties of coffee including frothy or intense, icy or piping hot, and aromatic and exotic coffee.
Question 1:
Differentiation and cost leadership are the two generic strategies that a company can adapt to create a competitive advantage in a market. What are the strategies that Barista, CCD and Qwikys have adapted? Which strategy do you think is suitable for the Indian market? Give reason to justify your answer
This is because: Indian market potentially is a very huge market. In order to survive in the Indian market, one needs to be different from others that can help distinguish from one another in the market If the market players are following the same strategy, there are chances that a saturation point will be created sooner or later which does not help the development factor Differentiation is a major factor which is very much essential in the Indian market. But this differentiation must be accompanied by creativity as well as innovation which will play a major role as far as the survival factor is concerned
Differentiation enables market players to have that competitive edge over their rivals. One should always try to exploit the weakness of their nearest rivals and on the other hand also try to convert its weaknesses into strengths In order to survive in a market, one must have something that distinguishes itself from their rivals. This distinguishing factor can be enhanced through differentiation. This will help the firm to stay one step ahead of their nearest competitors So, in short, it can be said that for a market like India, the differentiation strategy should be adapted. One must have the ability to distinguish itself from the others otherwise it wont be possible for a firm to survive especially in a Country like India
Question 2:
Barista, CCD and Qwikys target different segments. What is the segmentation strategy adapted by the three players? Also comment on the potential of the each segment
Target Customers
Barista, CCD and Qwikys have differentiated themselves on the basis of ambience, dcor, service, price, quality and customer relationships Barista have mainly targeted the youth from the premium sector of the society CCD has targeted the mass market. CCD perceives the whole market to be its playground Qwikys have targeted the youth in the age group of 18 to 30
Target Customers
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Question 3:
Starbucks is planning to enter the Indian Coffee retailing market. Of the three players discussed in the case, who do you think is competitively better placed to face competition form Starbucks and maintain their growth?
A Note on Starbucks
y y y y y y y
International coffee and coffeehouse chain. Headquarters SEATTLE. 16,120 STORES in 49 countries. 11,000 in U.S, 1000 in Canada, 800 in Japan. Sells drip brewed coffee, espresso . Starbucks entertainment division brand, the company also markets books music, and film. Original name Starbucks coffee, Tea, and Spice.
Competition of Starbucks
Out of the three players discussed in the case, CCD is better placed to face competition from Starbucks and maintain their growth.
This is because:
CCD has targeted the mass market consumer. They have considered the whole Indian market as their playground. This strategy has not been adapted by Barista and Qwikys. Moreover CCD is unable to keep pace with barista, it is growing steadily all over India and have catered to the needs of the entire gamut of people. CCD has also priced its products 20% lower than its competitors. This strategy has been adapted by CCD in order to attain competitive edge over their nearest rivals. CCD has a trend of Indian restaurants where as Barista & Qwikys have an Italian way of service in India. The above mentioned points will help CCD to face competition form Starbucks and maintain its steady growth in the market.
Question 4:
Do you think that the intense competition in the coffee retailing business is likely to cause consolidation? Explain with reasons
This is because:
Each of the three coffee parlors have their own way of functioning. They have different identities, different ambience, different prices, quality and customer relationship. Each of these coffee parlors have their own way of operation and are vying for the top position in the Indian Coffee market in their own way. Each of these coffee parlors have their own way of looking at things and the way they go about carrying on their business. Each of these coffee parlors will always have something different to offer to the customers. All these above mentioned factors distinguishes one firm from another thus putting light on the differentiation factor.
Thank You