Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands
To maximize their effectiveness, color cases should be printed in color.CafA? Coffee Day (CCD) is contemplating how to respond to the entry of Starbucks into the Indian coffee chain market. The case study describes the emergence of CCD as the leading coffee chain in India, with over 1,400 cafes in India. In early 2013, Starbucks, the world's leading coffee chain company, opened its first 11 outlets in India's metropolitan cities with local giant, Tata, and promises of a national roll out. CCD management debated whether there was plenty of room for both Starbucks and CCD in India's large growing market, or whether Starbucks' entry required CCD to respond more assertively.
Swot Analysis of "Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands" written by David B. Yoffie, Tanya Bijlani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ccd Coffee facing as an external strategic factors. Some of the topics covered in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands case study are - Strategic Management Strategies, Marketing, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands casestudy better are - – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, geopolitical disruptions, technology disruption,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ccd Coffee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ccd 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands can be done for the following purposes –
1. Strategic planning using facts provided in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands case study
2. Improving business portfolio management of Ccd Coffee
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ccd Coffee
Strengths Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ccd Coffee in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ccd Coffee are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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.
High switching costs
– The high switching costs that Ccd Coffee has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Ccd 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Ccd Coffee in the sector have low bargaining power. Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ccd Coffee to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Ccd Coffee has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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.
Ability to lead change in Strategy & Execution field
– Ccd 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 Ccd Coffee in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Ccd Coffee is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Ccd Coffee
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ccd Coffee does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ccd Coffee digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ccd 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.
Highly skilled collaborators
– Ccd 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Ccd Coffee has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ccd 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.
Weaknesses Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands are -
High operating costs
– Compare to the competitors, firm in the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Ccd Coffee 's lucrative customers.
Need for greater diversity
– Ccd Coffee has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, David B. Yoffie, Tanya Bijlani suggests that, Ccd Coffee is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Ccd 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.
Capital Spending Reduction
– Even during the low interest decade, Ccd 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.
Aligning sales with marketing
– It come across in the case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands can leverage the sales team experience to cultivate customer relationships as Ccd Coffee is planning to shift buying processes online.
Interest costs
– Compare to the competition, Ccd 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.
Skills based hiring
– The stress on hiring functional specialists at Ccd 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, is just above the industry average. Ccd Coffee needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Ccd Coffee has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands should strive to include more intangible value offerings along with its core products and services.
Opportunities Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands | 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands are -
Buying journey improvements
– Ccd Coffee can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ccd Coffee can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Ccd Coffee has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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. Ccd Coffee can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Ccd Coffee has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ccd Coffee to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ccd Coffee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ccd 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.
Learning at scale
– Online learning technologies has now opened space for Ccd Coffee to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Ccd Coffee can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ccd 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, Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ccd Coffee to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ccd Coffee to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ccd Coffee in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Ccd Coffee can develop new processes and procedures in Strategy & Execution 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.
Threats Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ccd Coffee with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ccd 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ccd Coffee in the Strategy & Execution sector and impact the bottomline of the organization.
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 Ccd Coffee.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ccd Coffee in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Technology acceleration in Forth Industrial Revolution
– Ccd Coffee has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ccd Coffee needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Ccd 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.
Regulatory challenges
– Ccd Coffee needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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. Ccd Coffee needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Ccd Coffee is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Ccd 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 Ccd Coffee.
Weighted SWOT Analysis of Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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 Ccd Coffee needs to make to build a sustainable competitive advantage.