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 - – wage bills are increasing, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands firm has clearly differentiated products in the market place. This has enabled Ccd Coffee to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ccd Coffee to invest into research and development (R&D) and innovation.
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.
Learning organization
- Ccd 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 Ccd Coffee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Ccd Coffee is one of the leading recruiters in the industry. Managers in the Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
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.
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 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.
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.
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 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.
Lack of clear differentiation of Ccd Coffee products
– To increase the profitability and margins on the products, Ccd Coffee needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 Ccd Coffee supply chain. Even after few cautionary changes mentioned in the HBR case study - Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ccd Coffee vulnerable to further global disruptions in South East Asia.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Ccd Coffee is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ccd Coffee needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ccd Coffee to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ccd Coffee can use these opportunities to build new business models that can help the communities that Ccd Coffee operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
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.
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.
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 Ccd 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.
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.
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.
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.
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.
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.
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 -
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ccd Coffee business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.