MM Case CCD
Coffee Wars in India:
Café Coffee Day takes on the Global Brands
By Group AC1
Divya Naik
Harshit Pandey
Mandar Rajendra Bothara
Ravi Teja Reddy
Varun Subramanian
INTRODUCTION:
This executive summary is in response to the case “Coffee Wars in India.” This involves the approach of Café Coffee Day (CCD), a division of Amalgamated Bean Coffee Trading Company Limited, in response to increased competition from Starbucks Coffee Company (Starbucks) in CCD’s home market of India. The issue CCD is looking to address is how to prevail over global coffee chains such as Starbucks entering into India’s coffee market. The crucial symptom of this hazard is a loss in market share of the market.
BACKGROUND:
CCD currently has approximately 60% of India’s coffee market with nearly 1500 stores. It focuses on the middle and upper middle class aged 30 and under. It operates small cafes, larger lounges and squares, and express outlets that each sell a variation of coffee, snack, and meal options at a comparatively affordable price. Starbucks currently has 11 stores in India and charges a premium price for specialty coffees and snacks to upper class and professionals aged 25-40. It is looking to expand at an unknown pace in the next several years in India.
Q 1: What should be the important goals for Siddhartha and Venu Madhav when considering their responses to Starbuck’s entry into India?
We think that CCD should be extremely wary of Starbucks’ entry into the Indian market and our stance is based on the following arguments. Starbucks has deep pockets. It can stay in the Indian market for a long time, maintain low prices, operate on razor-thin margins or even losses, but in the process bleed the competition to death. In the short term, Starbucks will hardly pose a threat to the profit and loss sheets of CCD, but in the long term, there is no reason why India should be any different from China or many other major urbanizing, globalizing emerging economies where Starbucks has
Café Coffee Day takes on the Global Brands
By Group AC1
Divya Naik
Harshit Pandey
Mandar Rajendra Bothara
Ravi Teja Reddy
Varun Subramanian
INTRODUCTION:
This executive summary is in response to the case “Coffee Wars in India.” This involves the approach of Café Coffee Day (CCD), a division of Amalgamated Bean Coffee Trading Company Limited, in response to increased competition from Starbucks Coffee Company (Starbucks) in CCD’s home market of India. The issue CCD is looking to address is how to prevail over global coffee chains such as Starbucks entering into India’s coffee market. The crucial symptom of this hazard is a loss in market share of the market.
BACKGROUND:
CCD currently has approximately 60% of India’s coffee market with nearly 1500 stores. It focuses on the middle and upper middle class aged 30 and under. It operates small cafes, larger lounges and squares, and express outlets that each sell a variation of coffee, snack, and meal options at a comparatively affordable price. Starbucks currently has 11 stores in India and charges a premium price for specialty coffees and snacks to upper class and professionals aged 25-40. It is looking to expand at an unknown pace in the next several years in India.
Q 1: What should be the important goals for Siddhartha and Venu Madhav when considering their responses to Starbuck’s entry into India?
We think that CCD should be extremely wary of Starbucks’ entry into the Indian market and our stance is based on the following arguments. Starbucks has deep pockets. It can stay in the Indian market for a long time, maintain low prices, operate on razor-thin margins or even losses, but in the process bleed the competition to death. In the short term, Starbucks will hardly pose a threat to the profit and loss sheets of CCD, but in the long term, there is no reason why India should be any different from China or many other major urbanizing, globalizing emerging economies where Starbucks has