Old Town White Coffee, India

Topics: India, Coffee, Mumbai Pages: 19 (6941 words) Published: March 10, 2011
1.0 Introduction
The history of Old Town White Coffee (OTWC) began in 1999, started as a classic coffee shop of White Café in Ipoh, Malaysia. With the inspiration of vision and passion to make and serve fine coffee to Malaysian household and food service industry, the founder and executive director, Mr. Goh Ching Mun and Mr. Tan Say Yup created a secret of Old Town 3-in-1 instant white coffee. In 2005, the company expanded vertically into food and beverage industry by opening retail chains of OLD TOWN F & B Outlets. Within a short span of eight years, the Company’ globally reaches at 13 countries. By the end of 2009, Old Town White Coffee was franchised 1,348 retail outlets in Malaysia, 550 retail outlets in Singapore, and 2,100 retail outlets in Hong Kong (Old Town White Coffee, 2011). So, what is the next step? OTWC India! The probability of OTWC successfully introducing its coffee bar culture in India is relatively high for many reasons. Firstly, India is the seventh-largest country in the world and the second-most populous country with over 1.18 billion people (around 17.31% of the world’s population). India is also expected to have population more than 1.6 billion by 2030 and might surpass the population of China (U.S. Department of State, 2010). For example, Mumbai: 13,900,000 people and New Delhi: 12,100,000 people (City Mayors Statistics, 2010). Secondly, India is the world’s 5th largest coffee producer in the world. There are over 170,000 coffee farms in India, cultivating nearly 900,000 acres of coffee trees, employing about 600,000 Indian, and exporting over 500,000 pounds of coffee in each year. Most of the coffee in India is grown in three states: Karnataka, Kerala, and Tamilnadu which accounted for over 92% of India's coffee production in each year (Wikia, 2010). With expanding business to India, OTWC could reduce the transportation and importing cost of coffee beans. Besides that, OTWC could also integrate backward or form alliances with the local producer to produce its own healthy and unique aroma of organic coffee bean to serve Indian households and to become low-cost leadership. Thirdly, there is a new consumer culture emerging in India. Today, India’s young are becoming world-class consumers. They have increasingly wealthy and are willing to spend on everything. Time Magazine journalist, Michael Schumann, asserts that with the changing Indian economy, Indian attitudes towards money are also changing. These changes can be attributed by many factors such as the Indian economy went through a massive liberalization which had opened the India’s economy to foreign investment and trade. The new policies has dismantled important controls, lowered customs duties, devalued the currency, abolished licensing controls on private investment, dropped tax rates, and broke public sector monopolies (Schuman, 2003). This is the good news for both foreign and local entrepreneurs. This has create an opportunity for Multinational companies such as Citibank, McDonald’s and Motorola in finding a new home by outsourcing to India which has increased the job opportunity of India. This enables Indian consumers to reinvest in the Indian economy. For it, Indian consumers will definitely welcome the internationally popular OTWC to its country. The two proposed locations for OTWC shop are strategically picked to ensure the success of business venture and will serve as test locations because both Mumbai and New Dehli are home to many call centers where these younger spenders work. Besides, many colleges and Universities are also located here which will allow OTWC to target the young generations. Furthermore, these two cities are also major hot spots for tourists, who recognize a multinational brand such as OTWC. If the new stores are highly profitable, OTWC can expand to more than 200 locations in India. Certain adaptation will be needed as the political and social environment aspect will influence the further strategies...
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