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 - – increasing transportation and logistics costs, geopolitical disruptions, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing energy prices, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
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.
Diverse revenue streams
– Ccd Coffee is present in almost all the verticals within the industry. This has provided firm in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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.
High brand equity
– Ccd Coffee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ccd Coffee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Ccd Coffee is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David B. Yoffie, Tanya Bijlani can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Ccd Coffee in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Innovation driven organization
– Ccd Coffee is one of the most innovative firm in sector. Manager in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
Low market penetration in new markets
– Outside its home market of Ccd Coffee, firm in the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Ccd Coffee has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ccd Coffee even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, it seems that the employees of Ccd 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ccd Coffee has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands HBR case study mentions - Ccd 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ccd Coffee is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ccd 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, in the dynamic environment Ccd Coffee has struggled to respond to the nimble upstart competition. Ccd Coffee has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ccd Coffee is facing challenges because of the dominance of functional experts in the organization. Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands 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.
Better consumer reach
– The expansion of the 5G network will help Ccd Coffee to increase its market reach. Ccd 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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ccd 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. Ccd 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ccd Coffee in the consumer business. Now Ccd Coffee can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Creating value in data economy
– The success of analytics program of Ccd Coffee has opened avenues for new revenue streams for the organization in the industry. This can help Ccd Coffee to build a more holistic ecosystem as suggested in the Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands case study. Ccd Coffee can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, Ccd 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 Strategy & Execution .
Environmental challenges
– Ccd 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. Ccd Coffee can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Stagnating economy with rate increase
– Ccd Coffee can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
High dependence on third party suppliers
– Ccd 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.
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.
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 .
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ccd Coffee can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Ccd Coffee demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.