Executive summary :
India is the sixth largest producer of coffee in the world. Previously it is considered to be an South Indian drink and confined to Rich Brahmin class. But now it common to all ,especially to the Indian Middle class consumers. India has emerged as the most attractive destination for coffee shops . The current coffee chain shops are popularly termed as Cafes. The coffee chain markets in India has witnessed robust growth rapidly. Increased literacy rate, rapid urbanization and increases in per capita income changes the demand pattern.
Introduction:
Barista and Cafe Coffee Day were chosen because of their identical pattern of functioning and growth. They are the major two major players in thel coffee cafe industry, and their customers consider both as interchangeable brands.. The Coffee Cafe industry is currently one of the biggest and fastest growing sectors in business. The industry consists of a mix of individual cafes, hotel cafes and retail cafe chains.
Competitive Strategy of Barista : Barista coffee was established in 1999 with the aim of distinguishing growth opportunities in the coffee business. Increasing disposable incomes , change in the life style , rapid urbanization and global trends in coffee indicate immense growth potential in one particular segment.
Baristas Promotion ; As a promotional strategy , Barista generate mass promotion campaigns. This is mainly in the form of press, TV and Radio Medias. Sponsership and big budget advertisements are not promoted by Baristas. Barista also participates in various sales promotion activities to help increase sales at their outlets.
Distribution of Outlets : the distribution outlets of Barista are solely owned by the company. They are not operating in franchise modes.Thus the company control and make quick changes to its entire retail chain.
Distribution of Stock : The distribution of stock at Barista begins from the coffee beans being sent abroad for roasting. The roasting taken place in Venice, and the beans are then supplied to the main warehouse located in Delhi,later re-distributed to the various Regional Warehouses, and then to the local warehouses. The outlets get their stock from the local warehouses. Barista uses a Re-Order level system for the distribution of their stock. Barista outsources its transportation needs from an external organizations, and currently uses trucks as the preferred means of distribution.
Competitive Strategy of Cafe Coffee Day
It was in the golden soil of Chikkamangaluru that a traditional family owned a few acres of coffee estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading Company Limited, popularly known as Coffee Day was formed. With a rich coffee growing tradition since 1875 behind it coupled with the opportunity that arose with the deregulation of the coffee board in the early nineties, Coffee Day began exporting coffee to the connoisseurs across USA, Europe & Japan.
Promotion : Cafe Coffee Day doesn’t follow in mass media promotions. But they are involved in all the areas of serious consumer passion. They have held contests through popular television shows, were involved in ticket sales of few events, tie-ups with other youth brands, started being associated with movies by shooting a few scenes in the cafe.
Distribution of Outlets : Every Cafe Coffee Day outlet is named as Coffee Day. Coffee Day’s most unique aspects is that it grows the coffee it serves in its cafes. The first Cafe was opeined in Brigade Road, Bangalore in 1996. Its started its operation through Cyber cafe and later resifted its business to its core competency ie Coffee They have a market presence in over 49 cities..
Location : CCD is focusing mainly in malls and main markets.
Distribution of Stock : CCD has a roasting plant at Chikkamangaluru. The major distribution starts from this plant. The coffee beans are sent to the main offices of north and south India on monthly basis. The outlets contact the Head Distributors on weekly basis. As far as other eatables are concerned, the inventory is checked on daily basis and orders are placed according to the requirements. CCD uses its own store vehicles (small vans) for transportation needs.
Strengths and Opportunities of Barista:
Strength: Excellent brand name and brand visibility. Huge young crowd as target group. Excellent Human Resource ‘ Ambience and decor. Strong brand recall and popularity amongst urban youth. Have over 200 stores across India. Loyalty programs to offer discounts and attract customers.
Opportunity: Introduce cheaper & unique versions of coffee. Tap the smaller towns/cities. Can diversify in tea beverage segment.
Strengths and Opportunities of CCD:
Strength: CCD is projected as an affordable brand. Thus excellent brand name and brand visibility. Huge young crowd as target group. Excellent ambience and service. Over 1000 outlets and 300,000 visitors per day. It produces/grows the coffee it serves hence reducing the cost.
Opportunity: Introduce cheaper versions of coffee. Tap the smaller towns/cities. Merchandising. Tie ups with other companies for promotion.
General Electric Business Screen Analysis:
A large corporation may have many SBU’s, which essentially operate under the same strategic umbrella, but are distinctive and individual. The GE Business Screen introduces a three by three matrix with two composite values for Competitive Position and Industry Attractiveness to locate that business’s position in the matrix. On it, both industry attractiveness and competitive position are composite measures determined through an analysis and weighting of a variety of sub-factors, including rate and market share.
High Idea Cellular
Medium Madura Fashion & Lifestyle
Low/ Indian Rayon
Strong Medium Low
Successful SBU’s will do well in attractive markets because they add value that customers will pay for. So weak companies do badly for the opposite reasons. Decision making is done using the following criteria
For market attractiveness:
‘ Size of market.
‘ Market rate of growth.
‘ The nature of competition and its diversity.
‘ Profit margin.
‘ Impact of technology, the law, and energy efficiency.
‘ Environmental impact.
For competitive position:
‘ Market share.
‘ Management profile.
‘ R & D.
‘ Quality of products and services.
‘ Branding and promotions success.
‘ Place (or distribution).
‘ Efficiency.
‘ Cost reduction.
.
Future Business Plans and Conclusion:
It may be in businesses as mundane as cement, telecom, viscose yarn and metals but Aditya Birla Group is looking at a future business portfolio that includes alternative energy, water management, and new-age, eco-friendly materials that can be used instead of plastics.
References and Bibliography:
1. http://www.blog.skylinecollege.com/blog/dissertation/comparative-study-of-barista-and-cafe-coffee-day
2. http://www.tools-and-techniques.24xls.com/en110
3. http://www.adityabirlanuvo.net/investors/downloads/Nuvo_Corporate_Presentation_final.pdf
4. http://www.livemint.com/Companies/ExXBYw6GnixoarU62SlgZM/Aditya-Birla-Group-looks-to-future-thinks-green.html
5. India Coffee Shops / Cafes Market Outlook 2016, , http://www.researchandmarkets.com/reports/1793205/ viewd on 5th January 2014
6. http://www.iipmthinktank.com/functions/marketing/compartive.pdf
7. http://www.slideshare.net/nima15288/cafe-coffee-day
8. http://www.slideshare.net/khansahim/final-ppt-oncoffeecasestudy