Coffee Day Enterprises Ltd (CODE) SWOT Analysis / TOWS Matrix / MBA Resources
Restaurants
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Coffee Day Enterprises Ltd (India)
Based on various researches at Oak Spring University , Coffee Day Enterprises Ltd is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, technology disruption, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Coffee Day Enterprises Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Coffee Day Enterprises Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coffee Day Enterprises Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coffee Day Enterprises Ltd 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 Day Enterprises Ltd can be done for the following purposes –
1. Strategic planning of Coffee Day Enterprises Ltd
2. Improving business portfolio management of Coffee Day Enterprises Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coffee Day Enterprises Ltd
Strengths of Coffee Day Enterprises Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coffee Day Enterprises Ltd are -
Innovation driven organization
– Coffee Day Enterprises Ltd is one of the most innovative firm in Restaurants sector.
Operational resilience
– The operational resilience strategy of Coffee Day Enterprises Ltd comprises – understanding the underlying the factors in the Restaurants 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.
Successful track record of launching new products
– Coffee Day Enterprises Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coffee Day Enterprises Ltd 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.
Strong track record of project management in the Restaurants industry
– Coffee Day Enterprises Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Coffee Day Enterprises Ltd in Restaurants industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Coffee Day Enterprises Ltd 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.
Sustainable margins compare to other players in Restaurants industry
– Coffee Day Enterprises Ltd has clearly differentiated products in the market place. This has enabled Coffee Day Enterprises Ltd to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Coffee Day Enterprises Ltd to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Coffee Day Enterprises Ltd is one of the leading players in the Restaurants industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Restaurants industry
- digital transformation varies from industry to industry. For Coffee Day Enterprises Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coffee Day Enterprises Ltd 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.
High brand equity
– Coffee Day Enterprises Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coffee Day Enterprises Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Restaurants
– Coffee Day Enterprises Ltd is one of the leading players in the Restaurants industry in India. Over the years it has not only transformed the business landscape in the Restaurants industry in India but also across the existing markets. The ability to lead change has enabled Coffee Day Enterprises Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Coffee Day Enterprises Ltd is present in almost all the verticals within the Restaurants industry. This has provided Coffee Day Enterprises Ltd 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.
Weaknesses of Coffee Day Enterprises Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coffee Day Enterprises Ltd are -
Increasing silos among functional specialists
– The organizational structure of Coffee Day Enterprises Ltd is dominated by functional specialists. It is not different from other players in the Restaurants industry, but Coffee Day Enterprises Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coffee Day Enterprises Ltd to focus more on services in the Restaurants industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Restaurants industry, Coffee Day Enterprises Ltd 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.
Employees’ less understanding of Coffee Day Enterprises Ltd strategy
– From the outside it seems that the employees of Coffee Day Enterprises Ltd 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.
Compensation and incentives
– The revenue per employee of Coffee Day Enterprises Ltd is just above the Restaurants industry average. It 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.
No frontier risks strategy
– From the 10K / annual statement of Coffee Day Enterprises Ltd, it seems that company is thinking out the frontier risks that can impact Restaurants industry. 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.
Aligning sales with marketing
– From the outside it seems that Coffee Day Enterprises Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Restaurants industry have deep experience in developing customer relationships. Marketing department at Coffee Day Enterprises Ltd can leverage the sales team experience to cultivate customer relationships as Coffee Day Enterprises Ltd is planning to shift buying processes online.
High bargaining power of channel partners in Restaurants industry
– because of the regulatory requirements in India, Coffee Day Enterprises Ltd 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 Restaurants industry.
High cash cycle compare to competitors
Coffee Day Enterprises Ltd has a high cash cycle compare to other players in the Restaurants industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, Coffee Day Enterprises Ltd has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Coffee Day Enterprises Ltd lucrative customers.
Products dominated business model
– Even though Coffee Day Enterprises Ltd has some of the most successful models in the Restaurants industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Coffee Day Enterprises Ltd should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Coffee Day Enterprises Ltd products
– To increase the profitability and margins on the products, Coffee Day Enterprises Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Coffee Day Enterprises Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Coffee Day Enterprises Ltd are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Coffee Day Enterprises Ltd can use these opportunities to build new business models that can help the communities that Coffee Day Enterprises Ltd operates in. Secondly it can use opportunities from government spending in Restaurants sector.
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 Coffee Day Enterprises Ltd 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.
Building a culture of innovation
– managers at Coffee Day Enterprises Ltd 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 Restaurants industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coffee Day Enterprises Ltd 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 Coffee Day Enterprises Ltd to hire the very best people irrespective of their geographical location.
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. Coffee Day Enterprises Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coffee Day Enterprises Ltd is facing challenges because of the dominance of functional experts in the organization. Coffee Day Enterprises Ltd can utilize new technology in the field of Restaurants industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Coffee Day Enterprises Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Restaurants sector. This continuous investment in analytics has enabled Coffee Day Enterprises Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coffee Day Enterprises Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Coffee Day Enterprises Ltd has opened avenues for new revenue streams for the organization in Restaurants industry. This can help Coffee Day Enterprises Ltd to build a more holistic ecosystem for Coffee Day Enterprises Ltd products in the Restaurants industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Coffee Day Enterprises Ltd 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 Coffee Day Enterprises Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Coffee Day Enterprises Ltd can develop new processes and procedures in Restaurants 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.
Learning at scale
– Online learning technologies has now opened space for Coffee Day Enterprises Ltd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Restaurants industry, but it has also influenced the consumer preferences. Coffee Day Enterprises Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coffee Day Enterprises Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Restaurants industry, and it will provide faster access to the consumers.
Threats Coffee Day Enterprises Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Coffee Day Enterprises Ltd are -
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. Coffee Day Enterprises Ltd 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.
Technology acceleration in Forth Industrial Revolution
– Coffee Day Enterprises Ltd has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, Coffee Day Enterprises Ltd needs to keep up with the evolution of technology in the Restaurants 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.
Consumer confidence and its impact on Coffee Day Enterprises Ltd 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 Restaurants industry and other sectors.
Regulatory challenges
– Coffee Day Enterprises Ltd 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 Restaurants industry regulations.
High dependence on third party suppliers
– Coffee Day Enterprises Ltd 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.
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 Coffee Day Enterprises Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Coffee Day Enterprises Ltd 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 Restaurants industry.
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 Coffee Day Enterprises Ltd in the Restaurants sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Coffee Day Enterprises Ltd is facing in Restaurants sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Coffee Day Enterprises Ltd 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. Coffee Day Enterprises Ltd can take advantage of this fund but it will also bring new competitors in the Restaurants industry.
Increasing wage structure of Coffee Day Enterprises Ltd
– 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 Coffee Day Enterprises Ltd.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Restaurants industry are lowering. It can presents Coffee Day Enterprises Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Restaurants sector.
Weighted SWOT Analysis of Coffee Day Enterprises Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Coffee Day Enterprises Ltd 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 Coffee Day Enterprises Ltd 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 Coffee Day Enterprises Ltd 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 Day Enterprises Ltd 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 Coffee Day Enterprises Ltd needs to make to build a sustainable competitive advantage.