Case Study Description of Cafe Coffee Day: Brand Transformation through Repositioning
CafA? Coffee Day pioneered retail cafA? culture in India with its entry into the market in 1996. After enjoying success for more than a decade, the brand felt the need to evolve in order to suit consumer preferences and better compete in the market space. The CafA? Coffee Day management team commissioned a brand image study to better understand consumer perceptions. The results showed that although CafA? Coffee Day's "regular guy/girl" brand archetype had evolved over time, there was a clear gap between the intended brand identity and the image that was projected. To make the brand relevant to CafA? Coffee Day's core target group (i.e., young, urban Indian consumers), the company had to make sure that its positioning was relevant and clear, its brand identity was refreshed, and its cafA? experience was well defined and differentiated. CafA? Coffee Day wanted to identify various positioning platforms through analysis of the company, its competition, and its customers, and then to evaluate these platforms to arrive at an appropriate positioning choice. Ashita Aggarwal is affiliated with SP Jain Institute of Management & Research. Sulakshana "Lulu" Raghavan is affiliated with Landor Associates.
Swot Analysis of "Cafe Coffee Day: Brand Transformation through Repositioning" written by Ashita Aggarwal Sharma, Lulu Raghavan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cafa Coffee facing as an external strategic factors. Some of the topics covered in Cafe Coffee Day: Brand Transformation through Repositioning case study are - Strategic Management Strategies, International business and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cafe Coffee Day: Brand Transformation through Repositioning casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Cafe Coffee Day: Brand Transformation through Repositioning
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cafe Coffee Day: Brand Transformation through Repositioning case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cafa Coffee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cafa Coffee operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Cafe Coffee Day: Brand Transformation through Repositioning can be done for the following purposes –
1. Strategic planning using facts provided in Cafe Coffee Day: Brand Transformation through Repositioning case study
2. Improving business portfolio management of Cafa Coffee
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cafa Coffee
Strengths Cafe Coffee Day: Brand Transformation through Repositioning | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cafa Coffee in Cafe Coffee Day: Brand Transformation through Repositioning Harvard Business Review case study are -
Highly skilled collaborators
– Cafa Coffee has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Cafe Coffee Day: Brand Transformation through Repositioning HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Cafa Coffee has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cafe Coffee Day: Brand Transformation through Repositioning Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Cafa Coffee has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cafa Coffee has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Cafa Coffee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cafa Coffee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Cafa Coffee is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cafa Coffee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cafe Coffee Day: Brand Transformation through Repositioning Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Cafa Coffee has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Cafe Coffee Day: Brand Transformation through Repositioning - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Cafa Coffee is present in almost all the verticals within the industry. This has provided firm in Cafe Coffee Day: Brand Transformation through Repositioning case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Cafa Coffee is one of the leading recruiters in the industry. Managers in the Cafe Coffee Day: Brand Transformation through Repositioning are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Cafe Coffee Day: Brand Transformation through Repositioning Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Cafa Coffee is one of the most innovative firm in sector. Manager in Cafe Coffee Day: Brand Transformation through Repositioning Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cafa Coffee digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cafa Coffee has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Sales & Marketing field
– Cafa Coffee is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cafa Coffee in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Cafe Coffee Day: Brand Transformation through Repositioning | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cafe Coffee Day: Brand Transformation through Repositioning are -
Capital Spending Reduction
– Even during the low interest decade, Cafa Coffee has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Cafe Coffee Day: Brand Transformation through Repositioning has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cafa Coffee 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cafe Coffee Day: Brand Transformation through Repositioning, it seems that the employees of Cafa Coffee don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Cafe Coffee Day: Brand Transformation through Repositioning HBR case study mentions - Cafa Coffee takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Cafa Coffee has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Cafa Coffee, firm in the HBR case study Cafe Coffee Day: Brand Transformation through Repositioning needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Cafa Coffee needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Cafa Coffee has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cafa Coffee supply chain. Even after few cautionary changes mentioned in the HBR case study - Cafe Coffee Day: Brand Transformation through Repositioning, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cafa Coffee vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Cafa Coffee is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cafa Coffee needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cafa Coffee to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Cafa Coffee has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Cafe Coffee Day: Brand Transformation through Repositioning | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Cafe Coffee Day: Brand Transformation through Repositioning are -
Manufacturing automation
– Cafa Coffee can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cafa Coffee can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cafa Coffee can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cafa Coffee can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Cafa Coffee can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Cafa Coffee can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cafa Coffee can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cafa Coffee is facing challenges because of the dominance of functional experts in the organization. Cafe Coffee Day: Brand Transformation through Repositioning case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cafa Coffee can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cafa Coffee can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Cafe Coffee Day: Brand Transformation through Repositioning, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cafa Coffee can use these opportunities to build new business models that can help the communities that Cafa Coffee operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Cafa Coffee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cafa Coffee to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Cafa Coffee to increase its market reach. Cafa Coffee will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Cafe Coffee Day: Brand Transformation through Repositioning External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cafe Coffee Day: Brand Transformation through Repositioning are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cafe Coffee Day: Brand Transformation through Repositioning, Cafa Coffee may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cafa Coffee can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Cafe Coffee Day: Brand Transformation through Repositioning .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cafa Coffee needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cafa Coffee with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cafa Coffee will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Cafa Coffee is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Cafa Coffee high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Cafa Coffee has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Cafa Coffee needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cafa Coffee.
Increasing wage structure of Cafa Coffee
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cafa Coffee.
Environmental challenges
– Cafa Coffee needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cafa Coffee can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cafa Coffee can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Cafe Coffee Day: Brand Transformation through Repositioning Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Cafe Coffee Day: Brand Transformation through Repositioning needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Cafe Coffee Day: Brand Transformation through Repositioning is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Cafe Coffee Day: Brand Transformation through Repositioning is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Cafe Coffee Day: Brand Transformation through Repositioning is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cafa Coffee needs to make to build a sustainable competitive advantage.